Announcing Character Labs, our new sprint program for pre-seed founders
Two years ago, I teamed up with Eli Blee-Goldman and Jake Knapp to start Character, a new kind of seed fund that supports founders with capital and sprints. Since then, we have invested in more than 20 startups and worked hand-in-hand with the founders, using our Sprint method from Google Ventures, to help them build the right product for the right people.
Now we’re expanding, with a new program called Character Labs, designed to help pre-seed founders accelerate progress toward product-market fit. Here’s why.
Timing is everything
As a seed fund, we invest at a specific moment in the life of a startup: After the team has created an early version of the product, when customers are excited and ready to start using it (and hopefully pay for it!), but before the business is validated and ready to scale with more capital. I think of this as “version 0.9” of a startup.
However, our best founder relationships start much earlier, and give us a chance to get to know each other before we reach that specific investable moment and kick off a partnership that could last 10 years or more. In other words, closer to version 0.1.
What’s the best way to build that relationship? The default is a Zoom call and a promise to keep in touch. But I don’t think this is good enough — for us, or for the founder.
Before we invest, I want to show founders what it’s like to work with us. Not just that we can ask good questions on a call, but that we have something unique and valuable to offer. In return, I want to see a founder in action: How do they work with their team? How do they address the big risks in their business?
Most importantly, I want to establish the kind of trust and rapport that can only come from doing real work together.
If there was an obvious better way to build founder-investor relationships from the earliest days of a startup, everyone would do it. The challenge is a classic conflict of depth vs breadth: You can spend a lot of time with one founder, or a little time with lots of founders.
But we think we’ve found a way to avoid this conflict and have the best of both worlds.
Scaling the Design Sprint
A few years ago, Jake began working with Harvard and MIT as a guest instructor. Each January, he leads a group of student founders through a sprint program to help them explore and validate startup ideas. Each group contains 10 founding teams, so the normal approach we take with startups — one team, one sprint at a time — wouldn’t work. Jake had to retool his facilitation approach and figure out how to lead multiple sprints in parallel.
Inspired by Jake’s parallel sprints, I got to thinking: What if we took this approach with pre-seed startups? Next time we meet a promising startup that’s too early for us to invest in, what if we didn’t say “nice to meet you let’s keep in touch” but instead: Join a group of other founders at a similar stage and come sprint with us.
This could be the key to building founder relationships earlier. We could avoid the tradeoffs of depth vs breadth and spend more time with more founders, earlier in the process of building a startup.
We decided to give it a try.
Prototyping and testing Character Labs
As we do with every high-stakes project, we ran our own sprints to figure out how this pre-seed sprint program should work. We ran a Foundation Sprint, an Opportunity Sprint, and a Name Sprint. We sketched different forms of the program and decided which one would be most likely to help us reach our goals.
And we prototyped it, with a live pilot of Character Labs last summer. We recruited founders via existing relationships and communities like Xoogler. We shared a simple Notion landing page and asked founders to apply. We were hoping to find five great startups, but ended up accepting eight. We invested $100k in each startup and ran four weeks of back-to-back sprints with the founding teams.
We got great feedback from founders, who called it “transformational,” full of “gold nuggets of insight,” and a “running start” for their business.
Every team dramatically improved their product-market fit confidence score (yeah, we tracked it!) after repeatedly prototyping and testing with customers.
Fundraising was not our focus (there are plenty of great programs helping founders with that), but six of the eight startups have successfully raised money outside of the Character Labs investment.
In short, the pilot of Character Labs worked really well — even better than we hoped. So, following our successful test, we’re ready to commit and launch it for real.
Announcing Character Labs
Today I’m super excited to announce Character Labs, our new sprint program for pre-seed founders! You can read more and apply on our website, but here’s the gist:
Every company in Character Labs works directly with our team in a sequence of back-to-back sprints that are 100% focused on finding product-market fit.
In these sprints, you quickly test hypotheses and validate your product and GTM strategy. You leave the program with realistic prototypes and a detailed “scorecard” of risks. And you find out whether you’re on the right track in four weeks — not four months or more.
Character Labs combines everything we’ve learned from working with 250+ startups. It expands on the proven method from our book Sprint with dozens of new exercises and techniques that we haven’t shared publicly.
And on a personal level, I’m enthusiastic about Character Labs because the program allows me to extend my personal mission to a whole new category of founders.
The work that matters most to pre-seed founders
When we launched Character, I wrote:
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.
I think that’s why I’ve always found these too-early-to-invest conversations (“let’s keep in touch”) so dissatisfying: I know what matters to these founders. I want to help. But before, I didn’t know how to support them in a way that worked in the context of our goals and constraints for the fund.
Now I do. With Character Labs, we can help founders focus on the most important work — building the right product for the right people — at the earliest stages of a startup.
We are still seed investors at the core. This program is an extension of our strategy, not a pivot. And we’ll continue to invest most of our fund dollars into startups at that “version 0.9” stage. But I think Character Labs makes us better seed investors, by showing us how teams work up close, and allowing us to continue to build pattern recognition for what works and what doesn’t at the early stages.
Most importantly, it gives us a way to engage wholeheartedly with pre-seed founders, and to build authentic relationships from the very beginning. When we invest, we partner with founders for a long time: five, seven, 10 years, or more. This relationship matters, and we want to get it right.
And I can’t think of a better way to begin than by working together, hand-in-hand, on the challenges that matter most to you. I hope you’ll join us.