The Atypical Customer-Venture Capitalists

I follow Fred Wilson‘s blog, avc.com, regularly.  It is my must read every day, alongside some sort of news, if I can get it. Both the posts and the comment section are worth it.

Under the post, “The VC’s Customers (Continued),” there is a comment by Chance Barnett, who writes:

That entrepreneurs are the VC’s customer only in the context of the entrepreneur being the one to find and nurture actual Paying Customers in the long term.

A question arises with this statement-aside from their roles as a Venture Capitalists, as individuals, how many venture capitalists fully use their products as the typical user?  If the product is biotech, how many Venture Firm General Partners can separate out the right customer,  from the user: Is it a patient, a hospital, or a doctor?  This must be very difficult in an environment where God-Forbid one would actually use the product, yet one wants the product to sell and sell well.  If the product is a Web product, does the overly early exposure to a wide variety of products lead to   an atypical, hyper-technological user- and favoritism towards products that confirm specific worldviews about what it means to be hyper-technological for the average user?

While he goes on to continue about how the entrepreneur as a result, in many of these markets, are the ideal CEO because they are creating the market as they go along, it seems to me that the vaster the problem is the following-how much of anyone involved is “typical” or “ordinary” or just “competent,” and not a superstar who fully understands the risks and reward of the business.

Iteration and getting customer feedback solves some of these problems from the entrepreneurs’ point of view, but it rarely resolves the issue of those who are making source capital happen at first in order for it to marry a start-up business as a group of atypical users.

How would funding and companies that are funded change if venture capitalists were at the end of the day, aligned not with Entrepreneur, Not with the Limited Partners, but the person inside, the typical customer?  Isn’t this at the end of the day, the most difficult task of all?

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