Announcing Character, our new VC firm supporting startups with capital and sprints

For the past 16 years, I have helped startup teams design new products and bring them to market. And through those experiences, I’ve come to believe that building the right product for the right people is the thing that matters most to startup founders.

That’s why I’m so excited to announce Character, my new VC firm. I teamed up with Eli Blee-Goldman and Jake Knapp to invest in seed-stage startups and support them with the Sprint method we developed at Google Ventures (GV). This is my dream job — leveraging my interests in design, time dorkery, and investing to help founders focus on the work that matters.

People want to make startups more complicated than they have to be. There’s a lot of highfalutin talk out there, but startups are really about just one thing: Creating new products that make life better for the customers you serve. Our mission is to help founders do that with focus, speed, and purpose.

If this sounds good to you, we’d love to talk.

The power and potential of the Design Sprint

I started my career in normal product design roles (to the extent “normal” existed in the industry back then). First at FeedBurner (where I was an early employee), then at Google (which acquired FeedBurner), and finally at YouTube, where I led product design for creator tools and the YouTube Channels platform.

In 2011, Google Ventures recruited me to join their team as a design partner. The premise was simple, but the opportunity was extraordinary: Use my design skills to help our portfolio companies be more successful.

At first, we took an ad hoc approach. We would show up, figure out what design problems needed solving, and get to work. In the first year, we redesigned RetailMeNot’s coupon site and Foundation Medicine’s cancer diagnostic report. It was fun and challenging work, and very rewarding. (Both companies went public and produced great returns for GV.)

But as our investing pace accelerated, we needed a scalable, repeatable system if we wanted to continue delivering hands-on design help to our portfolio.

We got in touch with Jake Knapp, who had created the Design Sprint at Google. He was running sprints with internal “startups” there, including Chrome, Google Meet, and Google X, and we thought this approach would work well for the startups we were funding.

Jake joined our team at GV in 2012, and we embraced the Design Sprint as our engagement model for working with the portfolio. With each sprint, we improved the process itself, adding, subtracting, and refining exercises until it worked reliably. Over the next five years, we ran more than 100 sprints with startups, including Flatiron Health, Gusto, 23andMe, Uber, HubSpot, Blue Bottle Coffee, One Medical Group, and Slack.

During this time, two interesting things happened.

First, we realized that the power of the Design Sprint was much more than just doing design at scale. Our sprints empowered teams to focus intensely on the core challenges of their business and accelerated time to product-market fit. For many of the startups we worked with, it was transformative.

Second, as word began to spread about our sprints, we realized that this kind of support — tactical, hands-on help with a startup’s most essential challenges — was more than just a nice-to-have. We began seeing evidence that startups actively wanted to work with us. Our team and our sprints made GV a more desirable investor to startups. And in the world of competitive startup fundraising, that’s valuable.

We decided to double-down on this value by investing in a public brand and audience for the Design Sprint. We wrote articles and created resources that were freely available. We gave hundreds of presentations, at conferences like Google I/O, The Code Conference, and Singularity University, and at schools like Stanford, Harvard, and MIT.

And we decided to write a book.

Sprint came out in early 2016 and was an instant New York Times bestseller. It was a calling card for GV, a step-by-step guide to the Design Sprint, and a behind-the-scenes look at the sprints we had run with startups.

Most of the startups we featured in the book went on to become big businesses and successful investments for GV. For example:

• We helped Blue Bottle Coffee find product-market fit for their online business. They were acquired by Nestlé for more than $700 million in 2017.
• We helped Flatiron Health find product-market fit for their OncoTrials product (and several others). They were acquired by Roche for $1.9 billion in 2018.
• We helped One Medical Group find product-market fit for their online patient services. They went public in 2020 at a valuation of $2.7 billion.
• We helped Slack expand product-market fit from early adopters to the broader enterprise market. They went public in 2019 and were subsequently acquired by Salesforce for $27.7B in 2021.

Why I’m getting back into startup investing

In 2017, I decided to take a mid-career break and left GV. I loved my time there, especially working closely with startup founders, but I was ready for a new adventure. So for the next couple of years, I enjoyed my time “off” and dabbled in a bunch of projects. I wrote another book, Make Time, with Jake. My wife and I took a long sailing trip. We moved to Milwaukee. I consulted with corporate clients and worked with startups as an advisor and angel investor.

This period gave me a lot of time to reflect on my experience with all those startups. Now that I had some space, I couldn’t stop thinking about three lessons that stood out from my career.

First, I became convinced that time is our only finite resource, and how we spend it matters more than anything. This truth is amplified at startups, who have a finite amount of time to build the right product and find the right customers before they run out of money.

Second, I realized that this pursuit — of product-market fit — is the essence of entrepreneurship. There’s a lot of fancy talk about startups, but they’re actually quite simple: Make something new that helps customers live better lives, and do it as quickly as possible. Simple doesn’t mean it’s easy, but it’s very inspiring to be in this position, with clarity of focus and purpose.

Finally, there was the Design Sprint itself. As the book continued to sell, and stories poured in from around the world (including teams at Nike, LEGO, the United Nations, and Harvard), I reflected on just how well the process works. The impact of the Design Sprint exceeded even our expectations, and we created the darn thing!

We continued to improve the method. A global community of sprint facilitators took shape, and we learned from their case studies and ideas. We taught more than 3,000 people how to run Design Sprints in training workshops and used their feedback to further tweak the process. And in early 2020, when the world went into Covid lockdowns, we gathered input from the community and shared our own advice on how to run remote sprints.

Meanwhile, GV continued to rack up wins, with great returns from early investments and splashy deals with late-stage startups like GitLab, Plaid, Toast, Opendoor, and Stripe.

In 10 years, GV had started from zero and become one of the most credible and desirable brands in VC — and Sprint is integral to that brand. But the reality is that the Design Sprint isn’t perfectly suited for the types of operational challenges that late-stage startups face. It’s useful for all kinds of teams, but it’s a true game-changer for early-stage startups.

So as GV focused more on late-stage investing, and we moved on to new projects, it created an odd situation. Jake and I were leading the Design Sprint movement, but we didn’t have a vehicle for running sprints where they work best: with early-stage startups.

I realized that my work — as a designer, facilitator, and writer — remained mostly the same, but the business model changed. I was now a consultant, not an investor. I missed the alignment and shared incentives of investing in startups and working together over time. My experience at GV had been transformative, and I began thinking about how to recreate the best parts of that magic. I saw an opportunity to do something truly unique in venture capital; something that built on my experience at GV.

There was only one problem: I didn’t know how to run a venture capital firm.

Creating a VC strategy based on the Design Sprint

Fortunately, in late 2019, I met Eli Blee-Goldman and we became friends. I felt like I had won the cosmic lottery. There aren’t many VCs in Milwaukee, yet here was a brilliant under-the-radar investor who had built a fantastic portfolio. Even better: As an apprentice at a small firm, he had learned the brass tacks of venture investing — from internal process design, to fund administration, to portfolio construction, and fundraising.

In early 2020, we talked about starting a VC firm together. We talked a lot. We spent months trading notes and ideas and lessons. We made Google Docs, slide decks, and Notion pages.

From our earliest conversations, Eli helped me understand the opportunity to build a VC firm around the Design Sprint.

He shared his experiences as a traditional startup investor, where he often joined company boards and supported founders with coaching and advice. But he saw the limitations of that approach, and told me that “value add” can easily become “value destroy” when you’re not working hand-in-hand with the team.

The Design Sprint is an antidote to that model, providing a format for investors and startups to truly collaborate on solving problems together. What if we supported our portfolio companies by running sprints together, like we had done at GV? But what if we embraced this model as the core of our strategy, not just one thing on a menu of offerings?

Eli helped me see how unique this approach would be. The market for seed capital is crowded and commoditized. We looked at dozens of our peers and realized they were all saying the same things. Every investor is going to be your trusted partner from day one. They’ll pick up the phone when you call. They’ve been in your shoes, so they get it. You can almost copy and paste the text between websites.

In any market, sameness — when all the competitors look the same and do the same things — creates an opportunity for new companies to succeed by offering something different.

But this is especially true in venture capital, where the ability to invest must be earned and not taken for granted.

Startups do not need to take our money. They can bootstrap, raise other financing, or work with more established investors. At GV, I learned that the most successful companies get to pick and choose their investors, based on who they want to work with and what those investors are offering.

As a result, we know we need to earn the ability to invest in the most promising companies. And we do this by making founders an offer: We will work hand-in-hand with your team, running sprints to help you find and expand product-market fit.

Startup founders are our customers, and we’ve built our firm around the Design Sprint because we believe it’s a “product” that our customers want. From our experiences at GV and beyond, we know how well the process works. We know it creates positive word-of-mouth and opens the door to competitive deals.

And nobody has more experience with sprints at early-stage startups than we do. We know how to maximize the impact of the Design Sprint, and we know how to scale it — because we’ve done it before. When founders partner with us, they’re not just getting access to the creators of the Design Sprint. They’re getting world-class sprint facilitation (from us) and hands-on contributions from designers (also us!) who have coached some of the world’s most successful startups through pivotal moments.

In the right hands, the Design Sprint can help founders solve the high-stakes problems they wrestle with every day. We’re excited to solve those problems together.

Turning plans into action

Of course, I couldn’t imagine doing this without Jake Knapp, who invented the Design Sprint at Google and has been a close friend and collaborator for nearly 10 years. So I began to talk with Jake about what we were planning.

He was excited — in particular, for the opportunity to run Design Sprints with early startups. We’ve worked with companies of all sizes, but the sprint process always worked best at early-stage startups, which are relentlessly focused on testing hypotheses in pursuit of product-market fit. Our new firm would give us the ability to focus exclusively on those kinds of projects.

Jake pointed out that having our own fund could make sprints even more effective. At GV, we helped companies post-investment. We collaborated with our partners on the investing team, of course, but there was a hand-off from investors to designers after the funds were wired. Jake believed that running sprints as investors would allow us to partner more deeply with founders and provide even more effective help.

Our first sprint collaboration as a founding team was actually an internal project. We needed a name for our new firm!

So, in the somewhat-gross parlance of vintage Silicon Valley, we “ate our own dogfood” and ran a Name Sprint — an 8-hour process that combines the Brand Sprint with a series of Note-and-Vote naming exercises. We came up with 38 themes, which resulted in 92 names, including Lantern Ventures, Query Capital, and Likely Ventures.

After several rounds of evaluation, a thorough check of domain names and trademarks, and an extra night to sleep on it — just in case — we had our name: Character.

Why Character? The word has a lot of great meanings: It’s about people, growth, and integrity, and it even relates to coding (symbology) and design (typography).

We were tempted to choose something lighthearted, but we like the weight of Character. We like the responsibility of what the brand implies. Our name is a promise (to you) and a standard (for us) to invest with honesty, integrity, and transparency.

But the most important meaning is a bit more personal…

In this post, I’ve written about why I got back into startup investing four years after leaving GV. The basic reason is this: My personal mission is helping people make time for work that matters. By supporting founders, I help create meaningful products and businesses that in turn create meaningful change for their customers. By investing capital along with my time, I can amplify founders’ ability to spend time on this work.

How we spend our time is the most personal of decisions, because time is our only finite resource. An hour spent at work is an hour we can’t spend with family or friends, or taking care of ourselves, or serving our communities. That’s why it’s so important to focus our time deliberately, intentionally, on work that matters.

Character is about your actions, not your intentions. It’s about doing what you say you’ll do. About closing the gap between your goals and the specific steps you take to get there. Character is personal, because your actions define who you are. Not just how you conduct yourself, but what you spend your time on.

By investing capital to buy you time, and running sprints to help you focus, we’re here to help you translate your plans into action. We’re here to help you and your team spend time on the work that matters.

Character is a new VC firm founded by John Zeratsky, Jake Knapp, and Eli Blee-Goldman. Character builds on Zeratsky’s and Knapp’s work at Google Ventures (GV), where they developed the Design Sprint, worked with 100+ startups including Flatiron Health, Blue Bottle Coffee, and Slack, and wrote the bestselling Sprint book. Blee-Goldman brings a strong track record in software investing and broad experience in fund management after 10 years as a VC at Capital Midwest.

Character invests up to $1M at seed stage into startups betting on big shifts in customer behavior. They are a remote-native firm investing in companies located anywhere in the USA. They work hand-in-hand with founders, using the sprint method they created at GV, to help startups find and expand product-market fit.