Carolina Kung of Frontline Ventures on accelerating the learning curve of early-stage founders and CEOs

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Episode outline

[01:12] Introducing Carolina

[03:10] The most common mistakes Carolina sees companies making across the portfolio and advice she gives her clients

[06:16] The process for European companies that wish to expand into the United States

[07:40] How Carolina prioritizes hiring and hiring patterns in the United States versus Europe

[10:00] Lessons from companies Carolina has seen succeed

[12:00] How European companies can expand into the US for the first time

[13:35] Playbooks that Carolina has seen to be effective over the portfolio

[15:44] The importance and benefits of maximizing peer-to-peer learning and networking

[18:11] How COVID-19 has changed engagement between Carolina and the founders and CEOs she serves

[20:05] What gets Carolina excited about the future


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All right. Super excited to have Carolina Kuhn on the call today. Um, Caroline is the head of platform at frontline ventures and Carolina. I'd love to have you introduce yourself and what that role means at frontline. Before we dive into how you see scaling SAS within the B2B companies at frontline.


Yeah. So, um, platform I under C I know what that sounds like. It's so fuzzy and it can mean so many, so many different things, depending who you ask, um, to us for a platform is essentially about accelerating the learning curve. Of our founders and CEO's, so what that means is I spend all of my time, uh, identifying, uh, common patterns and common pain points that exist within the portfolio.


And I think about ways to share all the experience and the learnings that our founders have at scale. So the whole concept is, you know, when you have an early, when you're an early stage B2B SAS fund, like we are, and you have 70, 70 portfolio companies, There's virtually no pain point that one of your founders will go through that one of his or her peers has not gone through already.


And so the whole aim of platform is to help unearth and share those learnings, uh, across, across peers and peer sets to accelerate, uh, um, to accelerate growth, essentially. Amazing. And that's why, so this is as, you know, a bit different than our normal guests, because normally focus on, you know, the executives, founders, they were in the seat driving revenue.


But I think this is really an important conversation to have, because like you said, you know, you have more than 70 B2B portfolio companies. And the pattern matching that you get to be privy to is, is unparalleled. So. Let's start there. I mean, what are I I'd love to dive into? I think sometimes the mistakes are almost more valuable than, you know, what went right.


Because sometimes right. Can be luck. Um, so let's start with the mistakes. Like what are some of the most common mistakes you see across the portfolio that you try to educate the teams about before they make them, but obviously you saw firsthand. I think, you know, that's a really good broad question. So I'll probably focus on just one or two, uh, cause literally when you're early, when you're pre-product, as many of our companies are, uh, you're making mistakes to learn.


Right. So, so part of that is just part of the journey. Um, I think, you know, a lot of times we see. I see, uh, companies that, uh, start thinking about things like talent and senior talent much later than they actually really should. They don't value how important it is to get the right people in at the right time.


From the beginning. You see that a lot in these conversations that are happening now around diversity and diversity hiring. If you build your hiring processes, To be inclusive, then you will be able to build an inclusive environment, but it's much harder to do that when you're at a series, a series B series C and suddenly you're like, Oh my God, I need to figure out how I'm going to make.


So. That's one. Um, and then I think, you know, a lot of our companies and end up, uh, um, uh, to identify their product market fit and having to kind of change their plans around that. And that's normal. So I wouldn't really kind of relate that as a mistake, but just not being afraid. Uh, to think, uh, to really look at what's out there and build accordingly and, and make sure that you are serving, uh, the, the audience and not serving yourself.


Um, So I think that those are our two and then the U S um, is a big one. Um, so, uh, we briefly talked about this, uh, in, in our taxes now, but you're, you know, as a European, as a European startup, you're not going to get to a hundred million in ARR. If the U S is not in that picture for you. So, you know, we advise our companies to start thinking about how they want to break into the U S market pretty early on in their journeys.


Um, and that's important to start early because it's not easy. It's not, uh, know one size fits all. Um, And things change all the time. Like the advice that we were giving companies in 2019 has completely changed to the advice that we will give them today. Things like, you know, remote hiring are becoming more and more important, but then how do you work with the synchronous teams?


How do you manage remote onboarding? Does the CEO still need to move there or not? Um, you know, there's a lot of issues. So just thinking about that. Early. Um, and the final thing that I would say is thinking about, uh, your, your follow on fundraising strategy early, uh, you should be thinking about this around.


Of course it varies from company to company around six months after, uh, initial investment. You should stop thinking, okay, where do I want to take this now? And who would potentially be the right partners for me to do it with. Well, let's focus in on, uh, the expansion into the U S is there a specific on the revenue side of the business?


So sales, marketing, um, is there a specific revenue benchmark after which you start encouraging the companies to consider that expansion? I'd imagine it's probably industry specific, but how do you, how and when do you begin thinking about that with founders? It's definitely industry specific. Um, and to be honest, that's not something that I do directly.


So it's not really an area of expertise that I have a benchmark for. Um, uh, yeah, but what I can say is that when you do start thinking about that, you need to start thinking about things like product localization and even identifying where your demand signals are coming from. Um, I've spoken to some of our portfolio companies that see great demand out of New York city, nowhere else.


And they have trouble figuring out how to, to implement a go to market strategy that will basically unlock the rest of the United States for them. So it's complicated. Um, but typically when we get to that stage, right. Then that typically involves bringing in also external advisors to help with particular, uh, you know, with legal tax, uh, visa, uh, and more specific growth, uh, uh, growth strategies that I'm no longer involved with.


Sure. So, um, you know, one of the things that we see all the time is this chicken and egg problem with hiring senior talent. Versus hiring teams that can actually execute those senior strategies. Usually at least in the U S we see the VP of sales hire is usually the first prioritize senior hire sales org is built out to a point at which marketing now needs to be spun up to meet that demand and feed.


Uh, the pipe for those reps. What are you seeing over there as far as patterns in the timing of how, how you build out those roles who gets hired when and what sort of coaching are you giving to your companies? That's also a case by case. I think, you know, what's important is that we are industry agnostic and that matters a lot.


And that varies a lot, depending on what exactly you're selling and who you're selling to. I'd say the pattern is similar though. Um, you start typically with a VP, a senior VP hire. Actually we did. Um, in our frontline ex uh, reports, uh, that I mentioned to you earlier, one of the things that we found was that, um, a lot of us companies that expand into Europe at the growth stage, um, are hiring for marketing talent only like several years.


Uh, uh, even past the, the, the point that they're thinking about expansion and that, that is a strategy that, you know, my custom, just because you need that expertise in house by the time that, that, that you're ready to think about going, uh, going global. And certainly if you're thinking about going to the U S on the seats on the early stage side, you need to have marketing expertise to identify.


The completely different tactics and strategies and tools that you have in the U S it's very different from my experiences when I, uh, I was part of a FinTech startup, a Swiss based, and I was part of the team that helped that startup expand into the U S and it was a huge learning experience for me, because it was completely different in the U S.


The strategies that we utilize around no going to large conferences and banking seminars or things that we didn't really do in Europe. Um, so that bit, I think is, is really important. So I'd love to go through some specific kind of companies where you use them as an example, within the portfolio of what, you know, sprinting from post product market fit to call it the 1 million MRR Mark to 10 and beyond, um, companies that did that exceptionally well, maybe faster than most.


And some of the lessons in there that you now share across the portfolio, as you know, things to try to replicate. Um, yeah, so there's one example that I can think of is pointy. Um, and part of their success was definitely, and part of the reason that they, uh, they were recently acquired by Google, uh, and part of the reason that they were that successful was because they were able to break into the U S market at just the right point in time.


And when they did that, they did that with a huge partnership. And that was Google. So. That's huge. That's like a definitely, if you're going into an unknown market, if you can bring in a partner that can help you solve and unlock that market, that's huge. Um, they're a great example of that. Um, and then there are others, uh, you know, we have, for example, a company called signal.


That does media monitoring. And when, uh, you know, fake news first started coming into the news, they did a first started becoming a thing. Whenever that was, it feels like so long ago, they did a really good job of getting on top of that narrative. And at the beginning, he was very much a us centric narrative, and they're a European based company.


Yeah. They did a great job at kind of tailoring their tool and their product to respond and to be able to deal and identify, uh, examples of fake news. And that immediately introduced them into the conversation in the U S um, so being aware of what is happening over there, uh, and being aware of how, you know, product localization matters for you to be able to break in there, I think is really important.


Those are two good, uh, good examples of that. And so, you know, the partnerships thing, could you dive into some of the tactical pieces of that? Like how did they, how did they as a European company entering the U S for the first time, what were some of the steps that they took? Um, what's some of the advice that you give on tactical steps to begin to eat?


I mean, landing, Google as a partner is obviously a huge win, but there surely was a lot of work that led up to that. Yeah. So that was, uh, actually pre my. My time. Um, but there's, there's one thing that I think is important to point out about this also touches back on what we were saying. So in, in my specific role, I'm looking for ways to like scale experience and learning.


I'm not looking to individually workshop with these companies. So it's hard for me to comment on like particular strategies or tactics. Those were probably, or those were definitely worked on between the CEO and the investor Smith partner on our side. Okay. Frontline. So in the case of pointy, if you spoke to will printer gas, he'd be able to tell you exactly what the tactical requirements were on the platform side, what we did, right.


It was kind of create supporting materials. So for example, we created, um, a U S EU to U S playbook that outlined everything CEOs and founders need to know if they're thinking about expansion, things like visas, tax, different tax requirements, Delaware, Corp, all of that kind of stuff. So it's very hard for me to, uh, you know, specifically comment on even like individual tactics, that individual companies, because I operate.


Up here, um, and across the 70, the 70. All right. So let's stay up there and talk about some more of those playbooks. Then. What are some of your other favorite playbooks that are, that seem to be most effective across the portfolio? Yeah, so I think, uh, um, we, you know, frontline was actually the first fund to hire for a platform in Europe.


Yeah. Uh, as soon as, as, as, as we started actually in 2012, um, and at the time my predecessor, it was just her and I think one other kind of platform and they were like, what is this? What are we? And they kind of built the European ecosystem, which is really cool. I was previously doing a similar job, um, at insight venture partners in New York city, where there already was quite a mature.


Ecosystem. Um, and so when I moved for, when I moved back into Europe and when I moved into this role, uh, at frontline, it was about trying to identify, you know, we're a small fund. There's 14 of us. We don't pretend to know everything. We don't pray and we don't want to be everything to everyone. We want to uniquely deliver, uh, on areas that we are uniquely positioned to deliver for.


Um, And as I mentioned to you before, we want to identify critical inflection points in the journeys of our companies, where we can say, okay, based on our experiences, we can add value here, here, here and there. Um, and so that has turned out, uh, into kind of like a five prong strategy where a big part of that is content and playbooks, and a big part of that is helping educate and helping, um, Supplement, uh, the experience of our founders through indepth research and the EU to the U S playbook is a great example of that.


There's another one that we worked on, which was a talent acquisition strategy playbook, which was quite valuable. And it's literally the a to Z of everything you need to think about and have installed in your business. If you want to start making senior hires, that's really critical at an early stage.


Um, The most important piece of, you know, being up here at the high level is really maximizing the peer to peer learning and networking. So thinking about how our network at frontline can supplement the experience of our founders and also how they can learn from each other, because let's face it. They want to learn from each other.


They don't want to learn from us and they shouldn't be learning from us because they have, you know, 70 other peers. That have gone through the same pain points as they are. So a lot of my time is spent thinking about how I can maximize peer to peer learning and we, and we run a series of programs. One of them is, um, we're just about to launch actually.


I don't know if you're familiar, if you've heard of YPO. Yeah, of course, we've kind of designed, uh, our version of YPO, which works quite differently from it. But the concept at heart is the same, basically pairing up CEO's within our portfolio with each other and having them meet regularly to become a support system and a support network and to exchange ideas and grow together.


Um, And then w that's a big part of it. We also have kind of workshops, educational workshops for all of our CEO's on very tactical specifics issues. Uh, you know, these are small, they're private. We have an expert in the room and we have a CEO who's done it. Who's been there who can speak to hers or her experience.


And then we also have a large CEO summit where we basically bring everyone together. And the last piece is kind of, we spend a lot of our time thinking about, um, you know, how we can save time, essentially for the CEO's. So I spend a lot of my time gathering databases on V vetted vendors you need to find and a marketing expert.


I can probably tell you who you should reach out to. I vetted, you know, 15 of them, you need a PR agency that's going to hire for this specific role in this specific region. I can probably help you do that. So, um, that's kind of the, the, the gamut, uh, of the platform offering and it all gets tied together, uh, by a continuous process of survey and feedback with the portfolio CEOs, where we identify exactly which actions have actually yielded an impact on the business.


And we doubled down on those and everything that has not yielded an impact on the business. We kind of cut out. I'm curious with COVID and everything worked from home has engagement with platform and the CEO's reliance on this increased. Uh, I would say at the beginning, definitely. Um, you know, we hosted quite a few workshops around thinking about cutting operating expenses.


Uh, again, a lot of our, you know, our, all of our companies are early stage. They, don't not, all of them have six months of runway in the bank. Uh, so we spent a lot of time kind of helping them. Think about how they could stay afloat, uh, if things really got bad. Um, and then we also really ramped up our, um, engagement with the CEO's directly.


So typically we run, uh, one of these CXO events. These are the technical workshops once a quarter, uh, once covert hit, we started running them once a month. Um, we typically publish a blog post on of topic that we believe will be of interest to the CEOs. Um, also once a quarter, we've been doing them once a month.


Um, and so, and just generally on a one to one, uh, level as well, all of us just being more in touch, just being more present, trying to support where we can. Um, you, one of the things that, that we did, which was small, but actually ended up. Being quite appreciated was we have a lot of founders and CEOs that our families, um, they have children.


Yeah. And, you know, no schools and just impossible to kind of make a living. So we thought, how can we support them? And we sent activities for their kids to complete, to kind of buy the parents an hour or two, uh, to either work or have, I don't know, maybe take a shower some and you know, we're just trying to think of out of the box ways that we can support them, uh, in what is really unprecedented and really tough.


Uh, as we wrap up, what, what's the, uh, what are you most excited about in your role across all the portfolio companies? What do you, what gets you excited about the future? And really, you know, my role has only existed for, uh, you know, eight years. Well, eight years, if you count. The actual founding date, but I'd say in the last five years we've seen so much development and it's still changing so much.


When I first was when I first, uh, um, was in this type of role, there were about a hundred of us in the global community. Now there are 700 and that was five years ago. So, you know, things are exponentially growing. What I'm really excited about is that we're starting to really, the big difficulty in platform or growth strategy type rules is the ability to actually quantify how much value or not you are adding to your portfolio companies.


I'm really excited about the idea that we're starting to break ground there. So we have our own internal process at frontline, which works well for us and kind of really helps us. Good quantify, you know, how, what percentage of all the actions that we do across the team for the portfolio are delivering high impact.


It's still kind of like a, uh, a labor of a manual labor of love, uh, for the time being, but more and more, you start seeing a solutions out there. You start seeing things like landscape ventures, or I know there's the U S equivalent where founders are able to rate their investors. And just bring in a lot of transparency into the process and a very necessary feedback loop that actually helps us be better.


Um, so I'm excited to see the next generation of that. Amazing. Well, Carolina, thank you so much for taking the time to chat with me. This was a fun conversation. Thank you. This is great. Thank you very much for having me on. All right.ch.