From finishing tasks to driving ROI: A VC product guide

This article summarizes an episode of EO’s video series featuring Peter Deng, general partner at Felicis.

Image credit: Timmy Loen

A product’s only job is to solve a customer’s problem, but companies often reward teams just for finishing tasks rather than getting real results.

Peter Deng, a partner at Felicis, a venture capital firm, says that to win, companies must focus entirely on helping the user, hire workers who can manage themselves using AI, and pick startups based on the right timing and a dedicated leader.

Customer outcomes redefine traditional product boundaries

Fulfilling a market need begins with discarding project plans that reward task completion over user satisfaction. As Deng notes that “for any product, you need to solve a real problem for the customer,” meaning backend operations are as integral to the product as the interface itself.

To anchor development around user results, teams must follow an operational sequence:

• Customer translation: Define the practical benefit using the target audience’s language.
• Problem separation: Isolate user frustrations from company pressures like revenue goals.
• Core mechanism identification: Pinpoint value drivers, such as Uber‘s price and estimated arrival time.
• Outcome evaluation: Judge every design detail by whether it increases customer confidence.

AI accelerates the need for autonomous talent

Executing this vision requires independent talent. Because AI tools amplify productivity and the impact of poor decisions, leaders must manage new hires through a path to ownership:

• Establish explicit goals. Provide structured rules and direction while new hires learn the business.
• Transition to coaching. Test employee comprehension of business problems to build judgment and reveal knowledge gaps.
• Offer selective support. Guide workers toward independence without completing the tasks for them.
• Enforce a strict deadline. Require operational independence within a six-month window.

Deng warns that “if I’m still telling you what to do after six months, I’ve hired the wrong person.”

Conviction demands precise market timing

Even with an independent workforce, investors must apply filters to identify which teams are chasing viable business opportunities. Complete data rarely exists in the early stages of a startup, forcing investment teams to document the evidence behind their decisions to track whether their hypotheses were correct.

Deng applies a triad of tests to measure investment potential:

• Identify a technological or market shift that changes customer behavior.
• Prove through early observations that customers experience a frustration.
• Verify that the founder maintains focus on the core problem while remaining adaptable.

A passionate founder without a customer problem or market timing will build a product people abandon.