Understand Customer Excercise

My personal interest is in clean-tech industry, especially in investment function, so I chose to interview one of my friends, Rebecca Peng, who currently works as a VP in a venture capital firm named Draper Fisher Jurvetson (DFJ). The firm is focusing on clean-tech investment and Rebecca works in its China team based in Shanghai.

Comparing to industries such as consumer goods or manufacturing, venture capital industry is that straight forward in defining the customer and the market. In fact, when thinking at the investor side, the investing process equals to buying process: VC firms are simply buying shares of startups and selling it when the value of the shares grow to their expecting values. So I consider the startup companies as the products that can be bought by customers. On the other hand, VC firms should be the macro-level customers and, Rebecca, who is playing an important role in investment decision making, is one of the micro-level customers. According to the definition on the book, I defined her as the most important influencer in the firm’s purchase decision. Therefore, her experience on using social media will have a certain level of representativeness.

According to my interview with Rebecca, the typical process in a VC firm regarding a certain investment would follow the following seven steps:

The use of social media is definitely throughout the step 1, 2, 7 and 8 during the decision process, for the purpose of sourcing investment targets, conducting market research, helping the initial due diligence, improving post-investment management and helping the exit of investment. The following chart describes for what purpose she used social media and what types of social media she used in each possible step of decision making:

Purpose of using social media Type of social media

Step 1 Building up and maintaining network in venture capital industry Wechat , LinkedIn Groups, Weibo , Snowball Finance

Learning and collecting firsthand information related to technologies and industries Weibo, LinkedIn Groups, Weibo, Snowball Finance, industry and organization websites (example: chinaventure, pedaily, 21ce, etc.)

Finding companies that looking for investments LinkedIn, Snowball Finance, industry and organization websites (example: wineast, vcinchina)

Step 2 Researching for specific technology, industry and market analysis Industry and organization websites (example: chinaventure, pedaily, 21ce, ftchina)

Initially investigate of the core management team Wechat, Weibo, LinkedIn connections

Step 7 Analyzing and understanding the market in order to help the company to increase its value Wechat, LinkedIn Groups, Weibo, Snowball Finance, YouTube, industry and organization websites

Searching