Aug 19, 2016 · 25m · 20vc
20VC: How Entrepreneurs Should Manage Their Board & Why Time Constraints Are Always The Key To Progress with Paul Berberian @ Sphero
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The 20 Minute VC, serial entrepreneur Paul Berberian, CEO of Sphero, shares actionable lessons on managing hardware startup execution, leading boards, navigating difficult fundraising landscapes, and leveraging time constraints to drive product innovation.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 24.2% of the talking time here. How this is scored →
Harry as informed peer 2.3 Guest teaching 3.3 Guest disagreement 1.7 Harry pushing back 1.5
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 19:46 Refusing Quickfire Premise
When Harry kicks off the quickfire round with a classic question about favorite books, Paul immediately rejects the premise, stating he does not have favorites and will not answer those questions.
Hardest push from Harry ▶ 16:26 Challenging Fundraising TimelineHarry pushes back on Paul's fundraising process by proposing a 9-month runway benchmark, challenging the guest to justify a shorter timeline.
Biggest teaching moment ▶ 8:39 Internal vs External DeadlinesPaul educates Harry on leadership dynamics, explaining that strict internal deadlines turn leaders into a totalitarian regime whereas external launch dates unite teams organically.
Harry holds his own ▶ 16:26 Offering Industry BenchmarkHarry demonstrates his own VC expertise by putting forward a specific 9-month timeline standard for startup fundraising rather than simply accepting the guest's framing.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Transition to Main Interview | 1 | 2 | 1 | 1 | Harry invites Paul to share his background, offering light humor when Paul recounts his failed early ventures. The atmosphere is collaborative and conversational as Paul summarizes his path to Sphero. | |
| Leadership Self-Assessment and Managing Product Focus | 2 | 4 | 1 | 2 | Paul provides detailed insight into leadership, explaining why external deadlines like CES or Star Wars Force Friday work better than arbitrary internal timelines. Harry probes on how Paul manages timelines internally without being forced by external events. | |
| Direct-to-Consumer vs. Omnichannel Retail Strategy | 3 | 4 | 1 | 1 | Paul breaks down retail distribution shifts between direct-to-consumer and omnichannel retail. Harry relays a question from investor Brad Feld about managing board conflicts, which Paul answers thoroughly with actionable advice. | |
| The Realities of Venture Capital Fundraising in Hardware | 4 | 4 | 2 | 2 | Paul speaks candidly about hardware fundraising difficulties, describing six sequential tranches of capital. Harry introduces his own benchmark rule of starting fundraising 9 months out, asking Paul to evaluate that timeline. | |
| What Distinguishes Great Venture Capital Investors | 2 | 3 | 4 | 1 | Paul criticizes investors who lack strong hardware theses as merely dabbling. When Harry transitions to a quickfire round, Paul rejects the premise by declaring he does not have favorites and avoids reading business books. | |
| Transferable Military and Aviation Skills to Startup Leadership | 2 | 3 | 1 | 2 | Paul details transferable skills from military aviation to startup management. Harry lightheartedly pushes back when Paul mentions multi-product development, teasing him about maintaining product focus. |
Statements from this episode (15)
Berberian: Constantly adding features drives execution teams crazy before shipping
“As I look at my leadership style, that intense focus on trying to add more and more stuff to the product can drive your team crazy, because they're just trying to get the basic Thing out the door.”
Berberian: Sphero had only $1M in the bank ahead of CES 2011
“We only had about a million dollars in the bank.”
Berberian: Retail hardware deadlines force product focus better than software timelines
“When you launch software, you can kind of fudge your release date, because you're always updating it. When you sell into retail, they say, okay, we're going to launch you on You know, October, so you have to back everything up from that date, and having extern…”
Berberian: Sphero expanded direct-to-consumer sales from 10% to 25%
“We started off maybe having 10%, you know, direct to consumer and that's, I'd consider sites like Amazon, More direct to consumer than a, you know, brick and mortar traditional retail. That's now shift to closer to 25% in the last couple of years, and last yea…”
Berberian: Direct-to-consumer hardware sales are primarily a US and UK phenomenon
“I mean, we're bullish on that because it's obviously better margin for us, but it's a U.S. Phenomenon primarily, and maybe a little bit in the U.K. In other markets, it's still very much brick and mortar, and so you have to take an omni-channel approach.”
Berberian: Arguing during board meetings signals CEO pre-meeting communication failure
“If you are arguing with your board in the middle of the board meeting, you need a mental, you know, some little light needs to go off saying you're doing something wrong.”
Berberian: CEOs should never present surprising information during board meetings
“The way to keep a happy board is to never surprise them. Always get in front of them. When you go to the board meeting, there shouldn't be any information that's presented where they're going to look at and go, what the hell is this?”
Berberian: Sphero uses Voxer for asynchronous board communication between meetings
“Another thing is that I've been doing with this company is I've been using a tool called Voxer, and we're doing a bunch of asynchronous communications where we can leave like these walkie-talkie messages for each other. So that we can have an ongoing dialogue …”
Berberian: Sphero completed six VC rounds culminating in a $52M round
“We raised our money a million dollars, and we had to get somewhere to show that we were worthy of getting another tranche of money, and that was our series B, which was five million, and then we had to do something with that to get our next Five million. Then …”
Berberian: Broad 'shotgun' pitching to 20 VCs inevitably yields 20 rejections
“It's always better to use a rifle than a shotgun. Every time I've gone out and tried to meet with, you know, 20 investors, inevitably I will get 20 no's.”
Berberian: 70% of VCs hedge in 'maybe' category without answering
“Seven out of 10 of them won't give you a response. They'll always go into the maybe category and hedge their bets.”
Berberian: Contacted 20 VCs for Sphero without getting a face-to-face meeting
“I remember early on, like, it was our Series B or Series C. I couldn't even get a face-to-face meeting. We, I talked to 20 VCs. I have a spreadsheet. I could get a phone call, but I couldn't get a face-to-face meeting, and I remember Brad saying, says, you hav…”
Berberian: Most venture capitalists lack a real hardware thesis and are dabbling
“They're not really strong thesis around, you know, hardware being transformed. And it's, you know, it's now this software enabled experience and the economics of manufacturing are significantly different than they were 20 years ago. There's very few VCs that a…”
Berberian: 2014 Disney Accelerator gave Sphero warp drive growth
“And then they ran a second program with Disney Accelerator in 2014. Going through that and the exposure we got into the Walt Disney Company has transformed the business. I mean, it, the accelerator doesn't, you know, put us, it gave us, you know, warp drive. T…”