October 21st, 2021
Common Room and its Uncommon team get to work with some stellar leaders in a number of spaces — community, SaaS, DevRel, and venture capital — and the more we learn from those leaders, the more we want to share the wealth.
Not long ago, we sat down to do that with one of our own investors, Sarah Guo of Greylock Partners. Sarah’s a staunch proponent of community-led growth, and makes a point to back companies centered around disruptive ideas.
In an effort to see inside Sarah’s brain, we held a Twitter Q&A packed with questions submitted by the Uncommon community. You can see the real-time thread here, but we also transcribed the conversation so you can read it below. Check out Sarah’s insights around how to differentiate your next big idea and what the future of investing might look like, then be sure to tune in for our next Q&A.
We’ll start with the basics: What do you look for when evaluating new companies to invest in? Does community weigh into it at all?
I try to invest as early as possible, so companies often aren’t much more than a deeply understood thesis and a special team — one that is ambitious, high-velocity, thoughtful and customer-centric.
For larger seeds, A’s and B’s, I am trying to find the leading indicators of product-market fit. I’m also most compelled by companies that have some theory of compounding distribution, and product-led growth, community buy-in, and a budding ecosystem are three of my favorites.
When it comes to those early conversations, do you have any non-starters? Are there established non-starters at Greylock? Or even across the investment world?
I have a very bright line on integrity, I prefer to work with highly transparent teams. We don’t invest in companies where the goal is an acquisition, even if that does happen — our ambition is to help build the rare companies that are durable and impactful as independent companies.
How has your viewpoint on community-first companies evolved across the past few years?
The Uncommon team recently shared some stats around growth in community-focused roles, with ‘community manager’ jumping 9% in the last year, and ‘head of community’ growing 20%. My partner Reid Hoffman and Jeff Weiner have done an incredible job of building the professional community at LinkedIn, so we’ve been thinking about the potential of community for a long time. I’m excited that authentic community as a force for business, accelerated by covid, is becoming a priority for every growing company.
What’s one tip for companies who want to be community-led but aren’t sure how to start?
The first thing is to authentically be in service of your community in a broader way. Ask yourself what does the community want to serve, what are they missing — besides your own product — and how can you help them achieve those goals? And how can they help one another achieve those goals?
The first step is often useful content and figuring out the most natural or helpful ways to organize connectivity between peers. I would invest early in community because community efforts take time to get off the ground, because you’re building trust and building relationships and that just doesn’t happen overnight.
Finally, I’d say think about how your community team is going to connect to other parts of the organization, and what KPIs they’re going to be held accountable for, so it will be a sustainable and strategic effort.
How do you evaluate products where the community is almost a separate product or selling point on its own, e.g., Peloton? Is community a “yes, and,” or “this is why we’re amazing!”
I don’t actually see community as a “selling point” -- the best communities are part of the core GTM motion, driving discovery and choice, and part of the core product experience, driving success, engagement and retention. For example, I find out about Peloton from my friends who are cultish advocates, and I stick with Peloton because my friends do it too.
What piqued your interest with Common Room?
All businesses are already communities. But businesses that actively build community have an extra gear in growth and a durable moat. Community advocacy is an unfair advantage in sales, marketing, support, and community engagement is an unfair advantage in product development. The vanguard is technical products, open source, and SaaS; but over time, we believe this wave is horizontal. Common Room is the leading company in the space with a passionate and high-velocity team.
I also couldn’t ignore the traction they had with our portfolio companies and other lighthouse community-led companies.
Speaking of those other portfolio companies! Looking at other Greylock investments who have changed the game in their space — like Dylan Field leading Figma — does that kind of traction surprise you?
We make investments only in companies we think have a chance of putting a dent in the universe, and I’ve always thought that of Dylan. I’d say two things we were surprised by in terms of scale and speed of changes in the industry: First, we were hopeful but unsure how much enabling real-time collaboration in the browser would change how people work, but it clearly does.
Second, at the Series A we were trying to size the company’s [total addressable market] based on the number of user experience designers and front-end developers of the world. And part of the big bet was that design would become a strategic advantage and that number would grow, but that trend has surpassed our expectations initially.
Finally, many things that Dylan wanted to do five years ago, the team is just getting to in mid-2021, and they’ve had new ideas since then, so we’re still in the early innings.
A lot of people may have ideas and think, “Oh, X and Y already exist,” but companies like Shortcut are making waves despite some tenured competition. How have you seen founders like Kurt Schrader and Andrew Childs overcome those odds?
The way people build software has changed dramatically over the past decade — simply because there are entrenched incumbents doesn’t mean those are good solutions for today’s challenges. Increasingly, companies understand that customer-centricity, inclusive, high-context collaboration, more distributed decision making, and better visibility into how they build software are competitive advantages, and so they’re looking for something better.
Your tools determine your processes and your performance in such a team sport like engineering. Shortcut also has a very clear north star — enablement of teams, not only administrators — and that makes a huge difference in the design of the product.
Back in March 2021, you shared a stage with Grace Francisco, Akshay Kothari, and Harry Stebbings to discuss the importance of community, specifically that every company has community, it’s just a matter of how much they invest in interacting. Has that changed in the months since?
I see community marketing and developer advocacy as an earlier and earlier investment for startups. Founders recognize that being a beloved brand is an incredible and hard to replicate competitive advantage in the age of the empowered technology end user.
They are also increasingly strategic and therefore data-driven and analytical in their approaches to community, which is where a product like Common Room comes in.
They want to understand their investment, health of the community, proactively find pioneering users/advocates, provide community context to other teams in the company, know when to give user advocates support. Customers and users expect a 360-degree, coordinated view today.
Talking with leaders at companies like Loom and Confluent, we see people at every level pounding the table on behalf of community; Shahed Khan as co-founder, Neha Narkhede on the board, and Ale Murray as community manager. Do you see a difference in the impact of each role?
Top-level belief in community as strategic, and having impact across success, support, marketing, sales and product is a huge enabler for successful community teams. I believe community is most powerful as a cross-functional enabling function. Where reporting to another C-suite leader, I see the role shift reporting to marketing, or having stronger operational connectivity to other customer-facing functions. We see companies hiring Chief Community Officers at a C-suite level, as with Mary O’Carroll at Ironclad.
And finally, what space are you most excited about over the next 5-10 years?
I’ve never seen more opportunity for software. We’re in the mainstreaming period of efficient GTM motions, advances in AI, accessible fintech and communications building blocks. If I name one thing, it's the ability to improve accessibility to tech and automation in the org. It used to be that everyone gravitated towards core enterprise systems and shaped their processes to fit the tools that had been built, but one size did not fit all. I think we’re entering an era of more easily end-user configured or end-customer data-trained ML software.
Another huge thank you to Sarah for taking the time to answer those questions, and to our Uncommon community for submitting great ones. We’re excited to do more of these Q&As with experts across community-led growth, so definitely keep an eye out for who’s next and get your own questions ready.