How CapitalG Supports Investments Post-Money
As part of our Growth Profiles series, we’d like to introduce you to senior operating partner Johan Duramy. Read on to learn about how Johan helps fast-growing companies scale, what he’s learned from leading teams at Google and CapitalG, and the qualities that characterize extraordinary founders.
What is your role at CapitalG, and what led you to join the VC world?
Johan: I lead our business development team which helps companies scale after we’ve invested in them, and I also lead our data science team to identify promising investment opportunities.
I’ve always been drawn to diverse challenges that force me to learn quickly. Before CapitalG, I primarily held COO or chief of staff roles. My first team at Google was focused on strategy and business operations to address the challenges of scaling. After that, I had a chief of staff role for a $B+ business within Google, and later led partnerships for a startup within Google — one that shut its doors before it could find product market-fit. Both of these experiences taught me a lot about prioritization and focus. While the failed startup stung, I saw how much failure is part of the growth process, and one of the best ways to find what works for you.
I’m inspired by the impact and creativity of early-stage founders, but I’m most attracted to the idea of taking something that already works and figure out how to improve and scale it. More reach, more customers, more users. So when David Lawee wanted to transform CapitalG’s approach to include post-investment support, I was drawn to the white-space nature of the opportunity.
What kind of problems does your team help founders get through?
Most growth stage founders are transitioning from doing things that work but won’t scale, to things that will scale and keep up with the company’s trajectory. They need to balance the speed and efficiency of team and product growth with the need for continually improving systems and processes for the most important problems that they’re solving. I saw the impact of approaching this scaling challenge again and again at Google, with its focus on things like hiring, goal-setting and decision-making. The environment taught me a lot about the ways you need to scale yourself as a leader. The transition may seem simple, but it usually ends up being quite complex. By tapping into our Google network, we’re able to shorten that learning curve for our companies and also share strategies that have worked for some of the most successful tech companies to date like Crowdstrike, UiPath and CreditKarma.
How does “tapping into the Google network” actually work?
Business development is a huge part of our work; we make introductions and help build relationships that will accelerate company growth—sometimes even generating multi-million dollar deals. To date, we’ve had over 2500 Googlers meet, advise and collaborate with our founders on go-to-market strategies, people and talent, product and engineering. We’ve also built CXO communities for peer learning that go beyond the Google network (like this one with Johanna Flower) where C-level executives can have a safe space to discuss their challenges, and ML@CapitalG, where over 1400 portfolio company employees learned from Google’s top minds in engineering and machine learning.
Our approach is to think about our founders and companies as customers, and ourselves as their customer service team. Everything is collaborative. We don’t tell you what to do. We show you what others have done to scale and help you prioritize so you can apply the tactics that you feel will work for you. Speed is critical. We do everything to get to what’s important for the portfolio companies, faster.
What areas do you see routinely making the biggest impact in companies you work with?
People and talent are at the top. Laela talks about this often. One of the most telling indicators of leaders is who they attract and hire, and then how they grow and retain them. Hiring is crucial to growth, because you’re constantly hiring ahead of where you are today. You need to be building an organization that evolves as you’re scaling rapidly. If you need to switch out people every two years, your organization will suffer.
We have a lot of connections in this area to speed up that learning curve. One example that comes to mind is our recent investment in ID.me. Founder & CEO Blake Hall and his team were experiencing exponential growth and needed to open up hundreds of people in support operations in under a month, having never had that function before. We tapped into our network of Googlers who gave them input on the types of vendors to consider, specific feedback on vendors, contract terms and negotiations, and long-term strategy — all in just a few weeks. The ID.me team was able to skip a lot of trial and error by getting access to our advisors who have done it all already.
Another big lever for growth companies is pricing. That can mean figuring out how to use free as a competitive differentiator (as Robinhood has), or for B2B SaaS companies, how to price your product correctly. Pricing has a massive impact for growth stage companies. Our advisors can offer insights and data points most founders simply don’t have access to.
The pandemic has obviously been a challenge for companies. What do you see coming for the future of work?
I’m very optimistic that a lot of what’s happening will make work better, and more fun. The pandemic accelerated a lot of the trends we’ve invested in, like automation at UiPath and no-code with Webflow and Unqork. As a community, we’re going to need to rethink the systems, the processes and the tools we use for collaboration. It won’t be smooth at first, but it will get better.
The best founders are going to use this moment as a competitive advantage. A hybrid work future enables companies to tap into a deeper talent pool, which leads to a more globally distributed creation of value in tech — a net positive for the world. We’re already starting to see this where people are recruiting talent, and of course where we as CapitalG invest.
We’ve been discussing return-to-office with our portfolio companies, bringing in experts like Google’s Chief Health Officer Dr. Karen DeSalvo to talk about safety and scenario planning. We’re all looking forward to seeing our colleagues in person again, but it’s hard to overstate how much this year-plus period has fundamentally changed how we work.
What effect do you think the pandemic will have on how VC funds position themselves, especially across multiple stages?
From an investment perspective, this has really only accelerated a trend. Companies develop competitive advantages that work for the market. Investment firms like VCs are doing the same thing. At one end of the spectrum you have those only bringing capital to the table; their differentiating advantages are price and speed. On the other end, you have investors like CapitalG who are going to stay focused on ways they can add value to the table and to collaborate closely with portfolio leadership teams to realize their missions.
Any scaling or leadership advice for early-stage founders as they plan for growth?
Think about how you’re layering on new engines of growth. Many of the companies that we invest in have a product that’s working well with specific customers, and growing primarily through a particular channel. Unlocking growth means focused experimentation — as growth tapers off in one of these product vectors, you’re adding in different layers and styles to see the benefits of exploration.
When it comes to being a leader, an idea that has always stayed with me is something I heard Bill Clinton say in a presentation on leadership. It was about the notion of “keeping score” for whether or not you’ve been a successful leader. The thought that resonated with me was asking,“Are people better off when you quit than when you started?” This is something I constantly think about: moving the ball forward for the better of the teams, processes, and people I work with.
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Read more from Johan: Partnerships to Grow by: The CapitalG Approach