Sitar Teli, Managing Partner, connect ventures

1. @sitarSitar Teli
Investing in Product and
User Experience-Focused
Companies: Why and How
Pre-Money MENA
December 2015

2. @sitarSitar Teli
• American, live in London
• 35
• VC for 10 years
• Previously with Doughty Hanson
Technology Ventures
• Connect Ventures
• London-based seed fund
• Focused on Europe
• £300k-£1m
• 23 investments, 19 active
• CVI: £21m
• CVII: £41m

3. @sitarSitar Teli
• Highly focused seed strategy: 7-8 investments per year
• We like to lead deals and are often the first and sometimes only investor
• Three necessary conditions:
• Strong founder/market fit
• Mission-led founders
• Focus on product and user-experience from the beginning

4. @sitarSitar Teli
Platforms SaaS Networks
Product
User Experience
Marketplaces

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“All aspects of the end-user’s
interaction with the company, its
services, and its products. The first
requirement for an exemplary user
experience is to meet the exact
needs of the customer, without fuss or
bother. Next comes simplicity and
elegance that produce products that
are a joy to own, a joy to use.”
- Nielsen-Norman Group

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7. @sitarSitar Teli

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9. @sitarSitar Teli
VS
Significantly better business value

10. @sitarSitar Teli
Engagement
Loyalty
Virality/Referrals

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More
Sign-ups, conversions, etc
Engagement
Virality
Brand
Revenue
Less
Churn
Cost
Customer complaints

12. @sitarSitar Teli

13. @sitarSitar Teli
• LEARN: About user experience. Start with your own daily frustrations,
both technology-related and not.
• BEFORE: Use the product, try the prototypes, ask to see wireframes of
the product.
• Great user experience focuses on providing value to the user, not
extracting value for the company.
• Example: Sign-up or on-boarding flow.
• DURING: Start with the product, not the presentation.
• TEAM: Look for
• founding teams that include: user-experience or interaction
designers, product managers, product designers
• founders with empathy for their users

14. @sitarSitar Teli

15. @sitarSitar Teli
• Not all companies gain (enough of) an advantage by initially
focussing on product and user experience.
• Many businesses gain a greater advantage simply by raising
more capital, which enable them to grow faster and dominate a
market, discouraging investment in competitors
• Offline services - delivery, cleaning, transport
• eCommerce and other low-margin businesses
• A focus on product and UX generally applies to mature
technologies, like Internet/mobile companies. Several interesting
investment areas such as biohacking, VR and autonomous
vehicles are nascent technically (i.e., this presentation doesn’t
apply).