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Artisanal Cheese, Cocktails ... Now the Artisanal VC?

In the era of the consumerized enterprise, it's easy to start a company, but difficult to build products that delight.

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Most venture investors say they are hands-on, but now some are taking it a step further and calling themselves “artisanal” VCs. What does this term really mean? Is it just a pretentious moniker that fits into today’s world of “handcrafted” $5 coffee and $4 toast? Or is there actually a new movement happening in the venture community?

While the term “artisanal” may be a bit overhyped, I would argue there is a real change afoot in the early-stage venture industry. There is a curiosity on the part of some VCs to focus on being a part of fewer, higher-quality, handcrafted companies. Investors like myself are now applying the same type of “craftsman” passion and care to help nurture companies from their earliest stages.

This is an approach that can be applied to all aspects of company building, from recruiting, product development and user experience design to market positioning, finding product/market fit, customer acquisition and much more. It is labor-intensive and requires investors to dedicate themselves as core team member, not just as “outside” advisers. I see this as creating greater value for investors and entrepreneurs alike.

I know, because I’ve been working like this with entrepreneurs for a good portion of my 15-year venture career. Getting deep into the trenches with a number of companies means that I may invest in fewer startups than other investors, but I can’t see doing early-stage venture investing any other way. It’s fantastic to see more VCs beginning to take this approach, and I believe it could create a new cohort of highly valuable companies.

The heart and soul of the artisanal movement is that it feels good to support and fund products and ideas that are created by people who care about and believe in them deeply. It’s exciting when people or small businesses dare to turn the ordinary into the extraordinary — often through a more specialized process that selflessly and tirelessly aims toward consumer happiness. What I’ve observed is that consumers respond to this business authenticity with true loyalty. I think it has become imperative that VCs view the companies we help create in this same vein, and use whatever unique skills we may possess to take a technology mainstream and turn it into something unique — a specialized product found nowhere else.

So, what does an artisanal VC approach look like? Often, it looks a lot like being an integral member of the core team, deeply involved in product development and finding product-market fit. You need to have a passion for the nitty-gritty of early product creation — from definition and market positioning to design, testing and tweaking every detail of many iterations to get to version 1.0.

In the era of the consumerized enterprise, it is easy to start a company, but difficult to build products that delight. You only have minutes to capture a customer’s interest; you need to iterate constantly, and often have to build community from scratch. In the old world, a technology entrepreneur could get away with taking weeks to develop a proof of concept and put out V1.0 of a product with a clunky user interface that required weeks of training. Not so today. Enterprise customers expect a fully functional, easy-to-use product they can just “turn on” and start using from day one. That’s why early-stage investors have to immerse themselves in helping craft the user experience in the earliest product releases. Without this level of involvement, it’s tough for investors to identify and help resolve blind spots.

Having expressed all this, I’d be remiss if I didn’t point out that the “artisanal VC” may not be the preferential role to take in the eyes of all entrepreneurs. Not every founder wants this level of involvement from his or her investors. Some prefer a more hands-off approach and, as a VC, it’s important to be invited to the role, rather than simply assuming it. On a day-to-day basis, being an “artisanal,” product-focused investor means spending a lot of hours understanding new software technologies and architectures, as well as having a deep passion for design and user experience.

I led Mayfield’s Series A investment in EasilyDo, a smart virtual-assistant app that uses contextual computing to make people more productive. Repeat Mayfield entrepreneur Mikael Berner came to us with a rough idea, but his deep expertise around natural-language processing from BeVocal and Nuance provided an intriguing starting point.

Since we invested in EasilyDo in late 2012, I have spent hundreds of hours working with the team to help create the product from scratch. I have assiduously tested the product (and competitive solutions), and have probably sent in the highest number of product suggestions. Our team has introduced Berner’s company to numerous potential partners for product integration and distribution. And I constantly check their rankings and ratings in the different mobile app stores. Yes, I am obsessed with their product — but that dedication began by investing in the people behind the product, and extends far beyond any return potential.

I’m also working “in the weeds” on two other stealth companies right now. One of the companies, where I play an integral role on the founding team, provides a solution to help analyze and transform legacy database/warehouse workloads into the most optimal storage and query frameworks available from newer NoSQL and Hadoop technologies. I’ve been involved in iterating the product strategy and recruiting the early team.

Having immersed myself in the big-data adoption life cycle through our earlier investments in MapR and Couchbase, I was able to help the founders define the end-user persona, thus transforming a pure technology into a user-centric product. I spent many hours brainstorming the right entry point for the product, and the founders lean on me heavily for product strategy, architecture, naming and positioning. As an early user of the system, they even expect me to participate in user acceptability testing to close out development scrums.

This level of involvement isn’t for every investor. You have to have a passion for product development and love “getting granular.” For many investors and entrepreneurs, the more classic money-in, money-out VC model makes more sense. But the “artisanal VC” movement is real and growing, and I’m thrilled to be a part of it.

Robin Vasan is a managing director at Mayfield Fund, investing in business software companies that are leveraging mobile, cloud and big data trends. Some of his current investments include Alfresco, Centrify, Couchbase, Marketo and Webroot; past successes include Akimbi (acquired by VMware), Trigo (acquired by IBM) and webMethods, (Nasdaq: WEBM, then acquired by Software AG). Reach him at rvasan@mayfield.com and @MayfieldFund.

This article originally appeared on Recode.net.