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#76 Mighty Capital: Product First VC Defies the Odds with a Hit Rate of 1 in 5

In a world where venture capital success is often described as a game of chance, with a hit rate of one in 20 or even one in 30, Mighty Capital stands out. Founded by entrepreneur, product leader, & author SC Moatti, Mighty Capital has carved a unique path in the industry, focusing on a “product-first” approach and achieving a remarkable hit rate of one in five.

On a recent episode of the Startup Project podcast, SC Moatti shared insights into her journey with host Nataraj SIndam, revealing the secrets behind her unconventional success.

From Product Guru to VC Pioneer

SC Moatti has a diverse background, ranging from a successful career in product management at companies like Meta and Nokia to founding her own companies and angel investing. Her passion for product excellence led her to establish “Products That Count,” a non-profit organization dedicated to fostering knowledge and best practices within the product management community. This platform has served as a valuable resource for Mighty Capital, providing valuable insights into emerging trends and identifying potential investments.

The Product Mindset in Venture Capital

Mighty Capital distinguishes itself by applying a product mindset to venture capital. This means looking beyond traditional metrics and focusing on the core elements of a successful product:

  • Team: They meticulously evaluate the team’s performance, board composition, and the CEO’s ability to be coached.
  • Traction: They seek companies with demonstrable revenue growth, analyzing revenue composition and customer references.
  • Market: They analyze the market, roadmap, and the company’s potential for growth.
  • Terms: They prioritize fair terms that foster a long-term partnership with entrepreneurs.

This approach, combined with her deep understanding of the product landscape, and the unique network of Products That Count, has enabled Mighty Capital to invest in companies like Amplitude, Grok, Airbnb, and Digital Ocean, demonstrating a knack for identifying winners before they become mainstream.

Beyond the Numbers: Building a Better Board

SC Moatti also highlights the importance of board governance in early-stage companies. She teaches a course on the subject at Stanford’s Executive Program, emphasizing the critical role of board members in maximizing shareholder value through effective use of financial and human resources. She believes that effective board engagement transcends the traditional power dynamics, focusing instead on collaborative partnerships with founders.

The Future of Product Management and AI

SC Moatti believes that product management is a constantly evolving field, and emphasizes the need for ongoing learning and adaptation. She encourages aspiring product managers to engage with the product community through platforms like “Products That Count,” to keep up with the latest trends and challenges.

When it comes to the future of AI, SC Moatti cautions against focusing solely on small, quick-win problems. She advocates for tackling larger, more complex issues, such as drug discovery, self-driving cars, and loneliness, areas where AI has the potential to revolutionize industries and improve lives.

Key Takeaways for Startups

SC Moatti’s insights offer valuable lessons for aspiring entrepreneurs:

  • Think big, start small: Focus on solving big problems but take a smaller, incremental approach to execution.
  • Invest in product excellence: Prioritize product quality and user experience as foundational elements of success.
  • Embrace lifelong learning: Continuously expand your knowledge and skills in the ever-evolving tech landscape.
  • Seek out mentors: Connect with peers and industry leaders who can offer guidance and support.

Mighty Capital’s success serves as a testament to the power of applying a product mindset to the world of venture capital. By prioritizing a product-first approach and building strong relationships with entrepreneurs, they are defying the odds and shaping a new era of VC innovation.

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