Keith Klein (Intro):
Welcome to The Adventure Fist Podcast, where I interview fascinating figures in the tech scene. Today, I’m thrilled to be joined by Jeff Bussgang, General Partner at Flybridge. Many know Jeff as a venture capitalist and Harvard Business School professor, but we’re diving deeper into his earlier startup days, particularly his pivotal roles at two Boston tech legends: Open Market and Upromise. We’ll also explore his latest book, The Experimentation Machine: Finding Product Market Fit in the Age of AI, and much more.
The Experimentation Machine
Keith: Jeff, thanks so much for joining us.
Jeff: Great to be here.
Keith: I can't believe this is your first time on the podcast! There's just so much to cover—your startup history, Flybridge, Harvard, Hack. Diversity, and now a new book. This is your third?
Jeff: It is. I’m excited about it—it’s timely and definitely in the current AI Zeitgeist.
Keith: Let’s dive in. What’s the book about?
Jeff: The Experimentation Machine is aimed at founders, entrepreneurs, and even joiners—those early employees—looking to leverage modern AI tools to become what I call "10x founders." In the same way we talk about 10x developers, these tools can make founders dramatically more efficient, especially when combined with timeless entrepreneurial techniques.
Keith: When did you start writing it?
Jeff: It evolved organically. As a professor and VC, I was seeing a convergence between my classroom and portfolio companies—AI-native founders using tools on what one of my HBS colleagues calls “the jagged edge” of innovation. That energy inspired me to write about these emerging practices.
Keith: You’ve written three books now—how do you juggle it all?
Jeff: Each one started organically—from blog posts, case studies, classroom discussions, and boardroom feedback. Eventually, it becomes something I feel I need to get out. My first book helped founders understand the VC mindset. The second focused on becoming a successful startup joiner. This one is the natural evolution, focused on AI and entrepreneurship.
Background & Early Influences
Keith: Let’s talk about your background. Where did you grow up?
Jeff: Lexington, Massachusetts. Big into sports and computers. I got hooked on tech during the Apple II era, taught myself to code, and eventually majored in Computer Science at Harvard, focusing specifically on AI back in the late ‘80s.
Keith: That blew my mind—your AI roots go way back.
Jeff: Yeah, I studied computer vision, natural language processing, and neural networks when those topics were still academic curiosities. I’ve always had a deep passion for the field.
Keith: And your dad was also a technologist?
Jeff: Yes. He passed away recently at 98, but he was a scientist and entrepreneur. He developed the Bussgang Theorem in signal processing, was an MIT and Harvard grad, and founded a tech company in the ‘60s without venture funding. He was my role model—my “kitchen table MBA.”
Open Market: Inventing E-Commerce
Keith: Let’s talk Open Market. Is it fair to say Boston invented e-commerce with the Open Market?
Jeff: Yes. Founded by an MIT professor and an HBS grad, we pioneered secure internet commerce and shopping cart technology. Amazon paid $40M to license it. We went public in 1996 at a $1B valuation—massive at the time.
Keith: And you joined early?
Jeff: Right after HBS in 1995. I was 25 when, joined as a product manager. We were about 30 people, still pre-product/market fit. A lot of experimentation—listening to customers and matching business needs with emerging tech capabilities.
Keith: Open Market also had early content management capabilities, right?
Jeff: Yes. Our systems were rigid, and business users wanted more flexibility. That’s where we started moving toward content and commerce integration. We even acquired FutureTense and later became part of Oracle via a series of acquisitions.
Keith: And Paul Sagan, who later became CEO of Akamai, was one of your early customers?
Jeff: Correct. At Time Warner, he challenged us to move faster with updates, which, back then, meant deploying code. That pain point helped shape the push toward more flexible, content-driven systems.
Upromise: Loyalty Meets College Savings
Keith: Let’s move to Upromise. I was a customer—it was perfect timing as I started having kids.
Jeff: Michael Bronner had the original idea. He was a pioneer in loyalty marketing—he founded Digitas—and teamed up with David Fialkow from General Catalyst, who made it their first investment. I joined as co-founder and president to build the tech and internet side.
Keith: So this was General Catalyst’s very first check?
Jeff: Yes—$ 1 M. That kicked off their journey. Then we raised capital from GA, Greylock, Kleiner Perkins, CRV, and Helman & Friedman.
Keith: And the business model?
Jeff: We combined a loyalty program with 529 college savings plans. Every time a customer spent with a partner retailer, a portion went into their college savings account. We eventually partnered with state plans and managed $35B in assets.
Keith: That’s huge. And Bill Bradley joined your board?
Jeff: Yes—after his presidential campaign. He brought deep insight into education and policy, which helped us grow and navigate that space.
Keith: Keep an eye on Bill Ford — he’s the lead investor in TikTok.
Jeff: Wow, okay. Very cool. So, how did they build that consumer brand? Building trust is difficult.
Jeff: Our innovation was twofold. First, we built the brand through partners. We signed up around 15,000 grocery stores across 100+ chains where consumers could spend and save college savings dollars. We also did a co-branded credit card with Citibank. These partners helped promote the brand.
Second, we were pioneers in online commerce. This was when e-commerce was still new. We built an online shopping mall experience with about 500 major retailers, using affiliate marketing, which had just been invented. I was familiar with it from my Open Market days.
Keith: That’s Cartera Commerce, right?
Jeff:
Yes. After we sold Upromise to Sallie Mae for $300M in 2004, our CTO, Dave Andre, launched Cartera. It became a platform for building online shopping malls for major credit card companies and airlines. It was eventually acquired by Ebates, now a division of Rakuten. When you see Rakuten shopping ads, that’s Cartera.
Keith: There’s so much Boston tech history there. And many successful people came out of Upromise — George Bell, Sheila Marcelo, Don 11, Dave Kinu, and more. Amazing alumni.
Jeff: It was a great group of leaders.
Keith: So, you had two big wins. What led you to become a VC?
Jeff: Both companies were VC-backed. Greylock invested in both Open Market and Upromise. One of their partners, Chip Hazard, who was a year ahead of me at Harvard, became a close colleague. He and Michael Greeley spun out to start Flybridge and invited me to join as a co-founder. That was 22 years ago.
Keith: That’s wild. I probably still have one of Chip’s old business cards. So, Flybridge has had a strong history. And now you're focused on AI?
Jeff: Yes. We were AI-native long before it was trendy. We backed DataXu — a machine learning company in adtech — 17 years ago. We also backed Brontes (a 3D dental imaging company out of MIT) and Zest AI, which provides credit underwriting tech for banks. All were early AI bets.
Jeff: Zest was a seed investment 16 years ago and is still thriving. Fun fact: When I told my dad about investing in Zest, he pulled out a paper he wrote in the '70s on using algorithms for underwriting. He had sold that concept to BankBoston. These ideas have been around for decades — now we have the tech to make them usable.
Keith: That’s the magic — the tech finally caught up. ChatGPT started as an experiment, and now we’re seeing powerful tools thanks to good interfaces.
Jeff: Exactly. We’re entering a golden age of software and human-AI interfaces. These capabilities are finally becoming seamless parts of daily life.
Keith:
So, what’s Flybridge investing in these days?
Jeff: We’re focused on AI-native, seed-stage companies from our offices in New York and Boston. New York's ecosystem has matured — you can now build massive software companies there. Chip led our MongoDB investment, now a $ 20 B+ company based in Times Square.
Jeff: We’re focused on the application layer — the “golden age” of apps built on top of AI infrastructure. Infrastructure has become commoditized, so apps are where value is now.
Keith: And you’re still focused on seed?
Jeff: Yes — exclusively seed stage, AI-native companies.
Keith: I remember your blog post from years ago: “Forget Plastics, It’s All About Machine Learning.”
Jeff: That was in 2012. I was seeing trends in big data and AI and made a cheeky reference to The Graduate — instead of “plastics,” I told grads to focus on machine learning.
Keith: What gets you to actually invest in a company?
Jeff: Initially, we looked for deep technologists — PhDs in AI. Now, platforms are so capable that we prioritize domain experts who have an “earned secret” and a nuanced go-to-market strategy. There’s a saying: “First-time founders focus on product. Second-time founders focus on distribution.” We need founders who deeply understand both their problem and how to reach their market.
Keith: Go-to-market used to be under-discussed, but without it, you’re going nowhere. How do you advise founders on that?
Jeff: I talk about this in my book, The Experimentation Machine. I break down product-market fit into stages — ideation, go-to-market, business model, and operations. Early on, founders need direct customer contact to maximize learning. Avoid gatekeepers. Focus on learning, not vanity metrics. Find that “hair-on-fire” value proposition.
Keith: Didn’t you get pitched by Curt Schilling for 38 Studios?
Jeff: Yes! I’m a lifelong Red Sox fan. He reached out while still pitching. I met him during spring training in Florida with my son and a friend. He pitched me his gaming startup over dinner. I didn’t invest, but I wrote an HBS case on 38 Studios and taught it. He even came to class. The students didn’t know who he was — only 20-30% recognized the name!
Keith:
Gaming wasn’t your focus anyway.
Jeff: Right. The idea was off, financing was messy, and while he was passionate, he wasn’t the right fit as an entrepreneur. Still, I respected him for what he meant to Boston.
Keith: You teach at Harvard, too. I love your “first day of school” posts.
Jeff: Yes, I’m on the entrepreneurship faculty at HBS and have taught 2,500 students over 15 years. I love getting to know their visions and dreams. You never know who they’ll become — like Zach Kirkhorn, CFO of Tesla. He joined pre-IPO, went to HBS, returned post-IPO, and rose to CFO. Tesla grew from hundreds of millions to over a trillion in value during his tenure.
Keith:
So, what timeless advice do you give your students?
Jeff:
Decide how much risk you’re willing to take early on. I use the metaphor: jungle, dirt road, and highway.
Jungle = early, messy stage. Product-market fit is unclear.
Dirt road = some clarity, but still bumpy.
Highway = scaling and optimization.
Figure out your risk tolerance and your passion domain. That’s crucial. For example, Zach chose Tesla because he loved cars. Even if it failed, he would’ve learned and followed his passion.
Keith: There’s also the metaphor of painkillers vs. vitamins — must-have vs. nice-to-have.
Jeff: I avoid the painkiller metaphor due to the opioid crisis. Instead, I say “hair-on-fire” problems. Michael Seibel of Y Combinator said: Your value prop should be so strong that if a customer’s hair is on fire, they’d smash themselves with a brick to put it out. Your first product won’t be perfect, but the problem should be urgent enough for customers to embrace it anyway.
Jeff: I also tell founders: “Nobody cares about your shitty little startup.” That’s what our PR lead told me at Upromise after the initial hype faded. You have to go earn attention with a compelling value proposition.
Keith: You’re involved with Hack. Diversity, too — amazing program.
Jeff: Yes, I co-founded it with Jody Rose and still serve as board chair. Hack. Diversity supports underrepresented engineers, mostly from community colleges and tech institutions like Bunker Hill and Wentworth. We provide training, mentorship, and social capital to help them land jobs at companies like HubSpot, Wayfair, and Rapid7. Eight years in, we’ve had eight cohorts and 700 alumni across Boston and New York. It’s incredibly rewarding work.
Keith: You’ve built what’s explicitly a DEI program in a moment when there are a lot of headwinds. But at its core, it’s really a program about excellence.
Jeff: That’s right. What we’re helping people understand is that credentials don’t always correlate with excellence. Opportunity is not evenly distributed. There are excellent candidates in engineering and technology who companies have a hard time accessing—either because they’re not in the right networks or because they need a bit of support, some wraparound services, to help lift them up and build those connections. That’s what we do at ACT Diversity.
Keith: It’s been an incredible program—such a key piece of the Boston tech ecosystem. And now New York has a program too, right?
Jeff: Yes, and I should mention—it’s now run by an amazing leader, Michelle De La Isla. She’s our CEO. Jodi, the founding CEO and my co-founder, moved to New York but remains on the board. Michelle’s story is remarkable. She came to the U.S. from Puerto Rico as a single mom in her teens, eventually became the mayor of Topeka, Kansas, ran for Congress, attended the Kennedy School, and then led at Draper Richards, the venture philanthropy firm. That’s how we met her.
Keith: Wow, I didn’t know that. That’s incredible. Speaking of Boston, what’s the vibe in the tech ecosystem right now?
Jeff: I should start by saying I’m not a biotech investor, so I can’t speak to that side. But from what I see, Boston is still strong in biotech, especially with the NIH funding ecosystem, though funding cuts are a concern. But when it comes to tech, and especially AI, we’ve fallen behind. I was candid about this in a recent Boston Business Journal article. If you look at the top 100 AI applications listed by publications like CB Insights or venture firms, Boston firms are barely represented. Maybe one or two.
Keith: That’s wild—how did that happen? With all the great institutions and data infrastructure, companies like EMC—Boston seemed so well positioned.
Jeff: I wish I knew for sure, but I have a few hypotheses. First, we haven’t been great at retaining talent. The world’s smartest people come here for school and then leave. Think Zuckerberg, Drew Houston—both left Boston. One of the technical leaders at OpenAI, who worked on GPT strategy, graduated from Olin College in Wellesley.
Keith: So they come here, then go to New York or the Valley?
Jeff: Exactly. When I talk to my HBS students, their top choices are always New York or San Francisco—maybe tied for first. Then there's a big drop-off. Boston isn't in the top two or three anymore, which is a real concern.
Keith: And your second hypothesis?
Jeff: The breakthroughs in AI—transformers, LLMs, the “attention is all you need” paper—largely came from Google, DeepMind, and labs on the West Coast or in Toronto. MIT and Harvard haven’t been at the forefront of these specific innovations. So we’ve missed that wave.
Keith: Yeah, I feel like Boston just got quiet. Maybe it was COVID-19—people stopped gathering and building community. But we’re doing events again. I think there's life at the seed and pre-seed stage, especially with repeat founders building AI-native products.
Jeff: Totally agree. Look at what happened during the early cloud/SaaS era. When Brian and Dharmesh founded HubSpot, it was a low moment for Boston. That company sparked an ecosystem, what some call the “HubSpot Mafia.” Klaviyo, for instance, came out of that indirectly and has become an incredible company. So I’m optimistic, but we also need to be candid about where we are today.
Keith: It’s good to look in the mirror and acknowledge that. Okay—lightning round. What are three apps you can’t live without? Not Slack, email, or calendar.
Jeff: Waze—I use it to get everywhere. ChatGPT—I use it 20 or 30 times a day. And Strava—I use it to track athletic activities with my kids and family. It’s fun and keeps us all connected through our workouts.
Keith: Nice. How about a book or podcast recommendation—other than your own?
Jeff: I love two that are probably under the radar. First, John Karalis’ Celtics podcast—I’m a huge fan, and he’s very analytical. Second, Ezra Klein’s podcast. He’s one of the smartest thinkers on policy, tech, and AI. He recently did a great interview with Congressman Jake Auchincloss about big structural challenges—like housing and healthcare—and how to solve them by increasing supply instead of just addressing demand.
Keith: Love that. Outside of work—investing, teaching—what do you do?
Jeff: I’m active in my synagogue and community. I love to ski, run, lift, and bike. I do the Pan-Mass Challenge every year—this year with my daughter and son-in-law. And I’m lucky to have a big local network—family, friends. I grew up here, went to school here, and my wife’s family is here too. So we spend a lot of time together.
Keith: Jeff, thanks so much for taking the time. This was a great trip down memory lane. We could’ve gone even deeper on some topics, but it’s clear the work you and your partners are doing at Flagg Bridge and in the community is super meaningful.
Jeff: Thanks, Keith. It was great to be here. I love what you’re doing to support the Boston ecosystem. We’ve got a hometown advantage, and I’m all in on cheering for it.