"The biggest mistake a founder makes is building a product no one wants" Alex Marshall, Backstage CapitalFeatured

Hi Elpha, I’m Alex Marshall and I lead Platform for the Backstage Capital portfolio. Before I joined Backstage I was co-founder and Head of Client Experience at Health IQ, a special rate insurer for health-conscious people that’s raised over $80M, and prior to that I worked at Goldman Sachs in the securities division.I’m passionate about using the customer journey and psychology to prove, define and drive value creation. Outside of work I’m dedicated to health-focused education reform and volunteer on supporting immigration cases. I’m also a writer, artist, Olympic weightlifter and composer. Ask me anything about platforms, community, venture capital, founding and scaling a business, customer journey and psychology, art or anything else!
I'm going to risk embarrassing myself here and ask: When you say, you lead Platform, what exactly does that mean? Also, my other Q: What do you wish more early-stage founders understood better?
Good questions re: platform!!
answered above!
Second! Thanks @amymjones
answered above!
#1) Definitely not a dumb question! As the VC industry has grown and become more competitive, writing a check doesn't guarantee a success story. Platform is a strategy for how VC funds differentiate themselves -- the resources + network value-adds that the fund provides to help build the world around a founder's idea. A Director of Platform often has the most broad view of the portfolio as a whole and is responsible for formalizing what this looks like.Platform is different at every fund depending on mission, priorities, stage and needs of portfolio. Main core areas: Events, Talent, Corp Dev/M&A, PR/Marketing, Fundraising Support, Community, Operational support#2) As far as what I wish more early-stage founders understood better...Early on, hire the best people. Hire people that are better than you. They make your job easier, and they also make you look good.Having the mindset to do what it takes to just figure it out is more important the vision.Making decisions is way more about how you arrived at the decisions, than the decisions themselves.Don't wait till the last second to fundraise:If you run out of money, you have little leverage with investors. Fundraise earlier, focus on growth since last raise, and sometimes selling what you are building next makes for a much stronger fundraising argument. After each raise, revise your cash management plan. Also set up the option for a debt line just in case something goes wrong. But don't touch it - it's a rainy day fund.
It is great to have you here this week! Quick question on backstage capital: does it invest outside the accelerator program? If yes, what is the investment process and timeline like from initial founder intro meeting to make a decision? Thanks!
Hi! thanks so much. In general we do invest outside the accelerator program. But at the moment we are heads down on the first cohort launch. For anyone raising and interested in talking with the team, it’s best to connect raising late spring / early summer. You are always welcome to email the deal flow team ([email protected]) or schedule office hours with them!
Thanks! A follow-up question: what is the investment process like and timeline like for a direct investment? Thank you!
Weightlifting totally changed the game for me as a boss lady (in a multitude of positive ways). I love hearing from other women who do it too—how has it impacted you? :)
OOOOO I love this question!!! I found weightlifting around 10 years ago when I was in a pretty bad place. At the intro session, I did the "mini" workout, barely finished - and when I did, I collapsed in tears on the floor. Partially because I realized how weak my body was, but also because in that gym, everyone cheers for the person that finishes last. I had never before experienced that level of unconditional support from total strangers.My soon to be coach for the next 6 years sat down next to me and I told him I didn't want to feel like this anymore. He cancelled the next class, told me his story, and together we made my first training plan.I switched to Olympic Lifting 4/5 years ago. And the gym is still not just a training facility. It's a symbolically higher place - my happy place where I commit to an uncomfortable level of personal discipline. It's the place where I constantly challenge myself to be better not just physically, but also mentally. The discipline required to be a competitive lifter has given me more control + self-awareness outside of the gym. Just like in training or meets - things don't always go my way, lifting taught me how to shift my focus and plan with a new goal that still lets me control how I best shape the outcome. Lifting has also taught me to ignore distractions and focus on the task at hand. It is literally impossible for me to throw a 90kg barbell over my head in front of an audience, unless my mind is 100% focused and committed to completing the lift. Same goes for challenges in work and life. It's me vs me. There's a quote that lifters love - "Things may come and go, but 200 pounds is always 200 pounds." It's a way of saying, that at the end of the day I only have to answer to myself. One day at a time, one pound at a time, one rep at time, one email at a time. I set goals, and every single day I work towards reaching them. It is how I approached helping build my last company, how I ended up at Backstage Capital. Currently - focused on my own health and helping other founders with challenges as they are building.Training made me physically tougher, but I think the mental toughness is what has changed my life the most.
Thank you for sharing the story!
What do you look for in a strong platform business before investing? Are there certain metrics that you look for before investing?
Early stage metrics are fairly consistent at all funds because these investors focus heavily on the team behind the idea. Why? Because this early in a company, everything changes constantly - product, deck, team, price, growth plan, etc. Investors look for founders with a track record showing they do whatever it takes to just figure it out. These ares are critical in a pre-seed/seed deck:VisionProblem (how it looks now)Solution (how it looks after company x exists)Market SizeCompetitive Advantage/LandscapeValidation (WTP - willingness to pay)TractionTeam
I actually just did a video campaign with Arlan + I'm a huge advocate for Backstage :) I was curious about your transition from founder to VC! What advantages do you think you have from having that perspective first, and how have they specifically helped you so far as a VC?
thank you so much for the backstage support! 💜and WOW. BIG QUESTION. 😂Will do my best... So the role of Director of Platform at every fund is different, but the goal is the same - after an investment, what are all the ways in which the fund can help the companies grow and succeed. There are traditionally 5-6 main categories. I also spend a good amount of time with founders on operations + product/market fitHere are a few things that I learned, that specifically have helped me in supporting early stage founders:1) The importance of empathy in building trust + relationships with our founders: Being a founder is really lonely. There are highs and lows and it often feels like you are trying to build the rest of a plane while it's already in the air. It is emotionally draining you get to sit and think a lot about the decisions you've made. For URM founders, even more so. My experience as a founder, and as a Latina, helps me be more in tune to what resources + support they need. Backstage Crew as a whole team does a REALLY good job of this. 2) Successful founders have the mindset to do what it takes to just figure it out: In early stage companies, everything changes constantly - product, deck, team, price, growth plan. As URM, our founders come from a different set of backgrounds than most other founders. When founders get stuck and reach out, I get in the weeds with them and together we come up with a short list of action items to try and get the ball rolling again. These conversations are really valuable when I am scoping out what resources/tools to build in the next year or two3) "Give a woman a fish, teach a woman to fish" : The most important thing I learned as a founder was that making a decision is way more about how you arrived at the decision, than the decision itself. When founders ask for guidance on decisions or specific challenges, I do spend time helping them put together an actionable plan. But I often start with asking them to walk me through how they're thinking about it. Especially when tackling finding product/market fit.4) Emphasizing the importance of regular communication with investors: At Health IQ our CEO was often in contact with our investors and board. Updating investors regularly is one of the most powerful ways of demonstrating focus.
Wow this answer is incredibly appreciated and so helpful, for both my new VC perspective and my future founder perspective. I think you're such an asset for recognizing the support founders need and that you anticipate the resources they need, and being a URM brings a certain type of resilience and resourcefulness that's not found anywhere else. Great to hear all this, thank you so much!!! I also hope I can pick your brain further sometime soon :)
Thanks so much for the kind words -- at the end of the day, it takes a village right?
I'd love to hear more about the specifics on how to use the customer journey to prove, define and drive value creation! Thank you for being with us this week, Alex!
At the highest level - how an organization delivers for customers is starting to be just as important as the product or service it delivers.In practice how this works:Observe customer experience through their eyesPut together + understand every tiny piece of the customer journey, Quantify customer interactions and behaviorsClearly define an aspirational customer experience journey Redesign + optimise experience from the customer up - align success on whole customer journey, not with single contact pointsThis is a really good article! -
Thank you for the insight, @grlalx! Would love to try this with Elpha!
What are the biggest mistakes you see founders make in developing a product? What do you wish founders knew better when pitching?
Building a product that no one wants - it's expensive. You can do a lot of the validation pre-product.Every investor is different, you have to learn to read the room. There isn't one right pitch for everything. No matter what - don't go into the room unprepared
I’ve never heard of anyone using quite that phrasing, “customer journey and psychology...” What has been the best example of you putting those skills to use to someone like me that doesn’t really know what you mean? :)
At the highest level - how an organization delivers for customers is starting to be just as important as the product or service it delivers.In practice how this works:Observe customer experience through their eyesPut together + understand every tiny piece of the customer journey, Quantify customer interactions and behaviorsClearly define an aspirational customer experience journey Redesign + optimise experience from the customer up - align success on whole customer journey, not with single contact pointsThis is a really good article! -
As you have built out your platform team, which capabilities and resources are the most critical for your team to provide the companies in your portfolio?
Alex – thanks so much for joining us for an AMA this week!As a reminder: this conversation is part of our ongoing series with people in the Elpha community doing incredible work.Alex will be answering your questions throughout this week. Please note that she may not have time to answer all your questions, so we'll be sorting questions by popularity based on most emojis 😊.
Thanks Elpha for all your great questions and huge thanks to @grlalx for your thoughtful and detailed responses. This AMA is now closed.