OpenView’s Blake Bartlett on How Product-Led Growth Can Break the 'Fundamental Physics' for Startups

Investor Blake Bartlett spent high school exploring different passions, from skateboarding to photography.

He now sees himself as the “song and dance man” at OpenView Venture Capital, a growth-stage venture capital firm. On this episode of the LA Venture podcast, the L.A.-based VC talks about coining the term “product-led growth” and building companies in the “end user age.”

OpenView is currently investing from its sixth fund. Focused on B2B software, the firm invests in companies that are actively scaling up, usually around the Series A or Series B, Bartlett said. Based in Boston, the firm has led investments in startups including Calendly, Expensify and Highspot, among others.

OpenView’s “value-add,” he said, is its 75- to 80-member expansion team, which focuses on helping its portfolio companies grow.

While many investors have a reputation for being interested mainly in metrics and math, Bartlett prides himself on bringing imagination to his investing approach.

“I'm much more wired like a creative,” Bartlett said. “Creativity means lots of different things. Creative problem solving, and how do we sort of really have a unique angle to diligence and this investment thesis like that is creativity, and that certainly comes to bear, but also having other outlets.”

Currently, he also uses that vision through his YouTube series, “PLG123,” and his podcast, “Build.” Both allow him to explore finding his voice and presenting a unique perspective to a wider audience by discussing topics relevant to the VC community.

That creativity came into play in 2016, when he noticed more companies were using product development—rather than sales or marketing—to grow. These companies were different both in operation and performance, Bartlett said, and were expanding quickly without burning capital.

“These businesses were growing incredibly fast on the top line, and then also being capital efficient, if not profitable on the bottom line,” Bartlett said. “For me, that kind of broke the fundamental rules of physics of startups, because I had heard and been taught that there's a fundamental trade off more times than not—almost all the time—between growth and profitability.”

Where a traditional business might invest heavily in its sales and marketing teams in order to expand, Bartlett said, a product-led organization looks first at tactical problems and seemingly small details like signup processes, paywalls and other features. These types of startups were building their product to serve the end user, rather than the division lead who might be purchasing software for a large company, for instance.

“So it's a difference first and foremost, the building for the user, not for the buyer. And then you distribute it to the user, not to the buyer.”

Bartlett said one of the benefits of this model is that companies can build a user base before dealing with administrative issues that software companies have to deal with when selling to much larger companies. Instead, product-led companies can focus on how to turn individual users’ love for a product into revenue, and then scale it from there.

“What is the business case and how do we take all this user love and this thing that people say they can't live without, how do we articulate that into ROI in dollars and cents for this organization that's considering [purchasing in] six figures, seven figures or something of that nature?” Bartlett said.

dot.LA editorial intern Kristin Snyder contributed to this post.

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