Product Management and Running a Micro VC: Lessons Learned

Product Management and Running a Micro VC: Lessons Learned

Introduction:
In the realms of product management and venture capitalism, there are valuable lessons to be learned. Both roles require a deep understanding of the market, the ability to solve problems, and the drive to create successful outcomes. In this article, we will explore the commonalities and unique insights from the worlds of product management and running a micro VC.

Product Management:
Product management involves ensuring that what gets built is valuable and viable. While the product owner responsibilities are a small subset of the product manager's responsibilities, it is crucial to understand the difference between feature teams and product teams. Feature teams deliver output, while product teams deliver outcomes. This highlights the importance of product discovery – the process of finding solutions that are valuable, usable, feasible, and viable. By applying the principles of strong product management, one can quickly determine the potential value of a piece of content or a product.

Running a Micro VC:
The world of venture capitalism is highly competitive and requires a deep understanding of the industry. It is essential to recognize that most VC funds fail, just like startups. In fact, it is estimated that nine out of ten VCs will not even achieve 1x returns. Therefore, it is crucial to thoroughly research and gather insights from at least ten micro VCs before deciding to start a fund. Furthermore, running a micro VC demands a solid financial situation as the majority of the fund needs to be allocated for investments rather than personal expenses.

Bootstrapping a micro VC can be challenging, mainly due to the lack of salary and limited opportunities for additional income. While fund managers often invest a percentage of the fund size, the majority of the capital is typically used for investments. Additionally, the average time to raise a fund is approximately two years, and SEC regulations limit the number of accredited investors to 99. This means that building momentum solely through small investments from friends is not feasible.

Lessons and Insights:

1. The Importance of Passion: Both product management and running a micro VC require dedication and passion. If you enjoy the work, it won't feel like work, and you will be more motivated to overcome the challenges that come your way.

2. Thorough Research and Homework: Before embarking on a journey in product management or running a micro VC, it is crucial to gather insights from industry experts. Connect with professionals who have experience in these fields and learn from their successes and failures.

3. Embrace the Long-Term Perspective: Whether it's building successful products or running a profitable VC fund, success rarely happens overnight. It is essential to have a long-term perspective and be prepared to invest time and effort into achieving your goals.

Conclusion:
Product management and running a micro VC are challenging yet rewarding endeavors. By understanding the principles of strong product management and learning from the experiences of micro VC managers, individuals can navigate these fields more effectively. Passion, thorough research, and a long-term perspective are key ingredients for success. So, whether you're building a product or running a VC fund, remember to stay focused, adapt to changing circumstances, and never stop learning.