Interview | Brian McAndrews of Madrona Venture Group - Part Three
Posted on Thu, Jul 08, 2010
We recently asked investor and new board member Brian McAndrews of Madrona Venture Group, a series of questions on the digital media industry, investing and "why Searchandise?"
Here's the third, and final, part of the interview.
Name 3 attributes of the companies you invest in possess.
The number one thing I look for is a strong team. Madrona invests in very early-stage companies, sometimes just a founder and maybe a technical person. We want to find entrepreneurs we can trust, and who trust us. We encourage them to talk to other CEOs we work with to understand what our expectations are as an investor and what value of the Madrona family of companies and entrepreneurs can offer. In developing businesses, the one constant is change – change in the competitive environment, change in the product offering as it evolves, sometimes change in the business model itself. So we want to work with management teams that are well equipped to deal with the inevitable changes and surprises.
Of course, I look for a compelling product offering. This may seem obvious, but I look for companies that have something that customers really want to buy; something that serves a market need that isn’t being served very well or at all by others. Staying focused on the customer and listening to their feedback are critically important fundamentals.
Think big. This is important in two ways. First, incremental technological improvements are not particularly interesting. Incumbent products are sticky and people are generally averse to change. So asking customers to buy something new that has one extra feature is not likely a compelling long-term sustainable advantage. We also want our entrepreneurs to address big market opportunities. That’s how big, sustainable businesses are built. The online game company Zynga (makers of Farmville) only monetizes 2-3% of their user base. It just happens to be that their base has over 200 million users every month.
What do you read to stay up on the market?
I have a standard list of publications that I try to get to daily that represent both tech and the general market: New York Times, Wall Street Journal, TechCrunch, TechFlash, Mashable and Business Insider. I also read Ad Age, Adweek, MediaPost, Paidcontent.org, Forbes and Fortune. I also find that speaking with colleagues both in and outside Madrona as well as meeting with entrepreneurs on a regular basis is extremely helpful in keeping me up to speed.
_________________________________________________________________________________
Brian McAndrews, Managing Director, Madrona Venture Group
Brian McAndrews joined Madrona as Managing Director in 2009. Prior to joining Madrona, Mr. McAndrews was Senior Vice President at Microsoft Corporation, leading the Advertiser and Publisher Solutions (APS) Group, where his team was responsible for approximately $3 billion in revenue and for building and marketing the Microsoft Advertising Platform. He successfully integrated aQuantive, Microsoft’s largest acquisition ever, into the company to help create APS. Previously, Mr. McAndrews served as CEO of aQuantive Inc., one of the fastest-growing global digital marketing companies in the world. He held executive positions at ABC Sports, ABC Entertainment and ABC Television Network; eventually becoming executive vice president and general manager for ABC Sports. He also served as product manager for General Mills Inc., a leading consumer products manufacturer. Mr. McAndrews earned a bachelor of arts (A.B.) in economics from Harvard University, and graduated from the Stanford Graduate School of Business.