What an Investor Looks for in Early-Stage Product | Barrel Kfir (Dell Tech Capital) - Product Builder Podcast episode with Eyal David
Updated: 00:47:33

What an Investor Looks for in Early-Stage Product | Barrel Kfir (Dell Tech Capital)

Host: · Guest: Barrel Kfir · About the host

Barrel Kfir, a partner at Dell Technologies Capital and a former developer and product manager in Israel's defense establishment, explains why product work may be the single most critical thing a startup faces from the seed stage on. In his view, investors look for founders with technological depth and product thinking that is tied to go-to-market, and it is better to hire an excellent product person with something to prove than to wait for a dream candidate who does not exist.

In this episode

  • Product work is among the most critical things in a startup from the seed stage: you hit classic product challenges very quickly and it is better to deal with them early, sometimes with a product person as one of the first hires.
  • The most common pitfall is product thinking disconnected from go-to-market: a feature edge over a giant player is worth little if it is unclear where the delta meets a customer and why they would replace an existing vendor.
  • Product management experience de-risks a founder: someone who owned a product has already wrestled with questions of market, competition and the killer feature, which closely resemble an early-stage CEO's thinking.
  • The dream candidate, a senior with exits who still writes code, almost never exists. Don't compromise on the quality of the person; hire someone hungry with something to prove.
  • Even after hiring a product person, founders must stay involved in product work from A to Z, and the first sales must be founder-led.
  • Competitor and feature analysis can be learned from home, and AI is shrinking it; a feel for go-to-market is only acquired in the field, in front of customers and through mistakes.

Listen to this episode

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Episode Description

Barrel Kfir, a partner at Dell Technologies Capital (Michael Dell's investment fund), comes from computer science, cyber R&D and product management at MAFAT, and has spent almost a decade in venture capital. In this episode he describes an investor's day to day before and after an investment, what the fund looks for (seed-to-B companies with technological depth that sell to the enterprise), the differences between the Israeli and European ecosystems, and the trends he sees: defense tech, cyber and AI, including the hype around it. The core of the conversation is the importance of a product manager in early-stage companies: why product experience resembles an early-stage CEO's thinking, why product thinking must be connected to go-to-market and market dynamics, which product person to hire first, and how to hand-wave to the right degree when selling a vision. Finally, Barrel shares how to move from product into venture capital.

Chapters

  1. 0:55 · Who is Barrel: from computer science and MAFAT to venture capital
  2. 3:20 · An investor's day to day: before and after the investment
  3. 4:54 · What Dell Tech Capital looks for, and which founders
  4. 14:50 · Trends: defense tech, cyber and the hype around AI
  5. 19:55 · How product skills help an investor
  6. 23:02 · Key product manager skills: technology vs. go-to-market
  7. 29:46 · Why a product person is critical from the seed stage
  8. 33:44 · Which PM to hire: senior, executor, or someone with something to prove
  9. 40:18 · Hand-waving, storytelling and selling a vision
  10. 43:08 · How to move from product into venture capital
Read the full transcript
Full transcript with speakers and timestamps

Selected quotes

“I think already from the seed stages, product work is critical, critical, critical, maybe the most critical thing a company has to deal with in the early stages.”
— Barrel Kfir
“Bring someone who has something to prove.”
— Barrel Kfir
“A bluff in poker works when nobody knows it's a bluff, then it's amazing. When they know it's a bluff, it looks really bad.”
— Barrel Kfir

Questions & answers

Who is Barrel Kfir?

Barrel Kfir is a partner at Dell Technologies Capital, Michael Dell's investment fund. He holds a computer science degree he started at 15, spent about seven years in Israel's defense establishment in research, development and product management roles (including at MAFAT), and has almost a decade in venture capital, starting at JVP.

What companies does Dell Technologies Capital invest in?

The fund invests in startups from seed through Series B, and in Israel mostly at seed and A, in technologically deep areas that sell to the enterprise: cyber security, enterprise infrastructure, data and enterprise applications.

When should a startup hire a product manager?

In Barrel's view, product work is critical from the seed stage. Even when founders have a product background, sometimes one of the first hires should be a full-time product person, because a founder has a lot of work that isn't product. Founders should still stay involved in every decision.

What kind of product manager should an early-stage startup hire?

Barrel recommends never compromising on the quality of the person: someone with high skills and learning ability who succeeded at everything they did. A hungry candidate for whom the role is a step up and who has something to prove is better than searching for a dream candidate who almost never shows up.

How do you move from product management into venture capital?

There is no single path. According to Barrel it starts with passion for the field, and then you steer your career decisions to become the right long-term investor: consult people who have been there, meet VCs, read about funds and startups, and take an interest before it is relevant.

People & resources mentioned

People

Companies & orgs

Tools

Venture Capital Investing Startups Early Stage Hiring a PM Go-To-Market Cyber AI

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