20VC Newsletter - June 2nd 2024
Here are the transcripts and top takeaways from 20VC episodes released this last week!
Monday’s episode with Jason Lemkin at SaaStr:
Download the full transcript:
My 7 key takeaways:
Why Pricing is Worse Than Ever
Everyone used to be risk-averse but now $10BN funds don’t want to share & leave the cap table.
Fast-growing companies in my portfolio are getting flooded with capital by insiders.
They are getting overfunded at inflated valuations.
Why Seed is Systemically Broken
The typical YC deal is $25M.
You have to write $3M-4M checks with a $50M fund.
The math doesn’t work.
Venture is Hard and Dilution is Real
You are going to suffer 50% dilution on the way to IPO.
You have to have 2-3 $BN exits.
There’s only a handful of ways to make $100M+ in venture.
Why Investors Should Always Check the Bank Account
I’m looking for bullshit.
My most stressful investments all have bullshit in them.
You can build a unicorn bullshitting but the best founders don’t bullshit.
What is Acceptable vs Unacceptable Churn
Anything higher than 4% a month is unacceptable.
I’ve passed on every company with abnormally high churn.
You have to get 100% retention or else the foundational model in software breaks.
Why Hyper Agile Teams in Competitive Markets Are Better
They collectively help grow a market.
Each quarter you invest more & pull away from competition.
Your product could be 40x better 4 years down the road.
Why You Have to Expand When You Hit 10% Market Share
Growth will slow when you approach 10% market share.
This is the right time to expand outside your ICP.
You also have enough time to implement the second act.
Wednesday’s episode with Mike Schroepfer, former CTO at Meta & Founder at Gigascale:
Download the full transcript:
My 6 key takeaways:
Why The Best Leaders are Conductors
You can get all the best players in the world
But if they all played different song sheets it’ll sound terrible.
Too many leaders undervalue coordination & optimization.
Inertia Is the Most Underappreciated Force
The inertia of early success can make teams pursue the wrong direction.
They would chase the $10BN market and miss the $100BN market.
Many high-functioning orgs do the right thing but operate at a local maximum.
Climate is a 10 Trillion Dollar Problem
It’s not a $100BN problem philanthropy and governments can solve.
You need markets to solve this.
The biggest challenge is the availability of clean & cheap energy.
Why the Next Few Years Will Be Messy but With Huge Opportunity
There’s a massive spike in demand for clean energy but progress is still limited.
Solar & battery storage is improving & we’re reaching a breakthrough.
We’ll have a good shot at unlimited clean energy in the next decade.
Is It Too Late to Save the Climate?
The best time to start was 30 years ago - the second best time is now.
We need to do a bit of everything: solar, wind, electrification, carbon removal…
Humans can get shit done fast when we put our minds to it.
How Climate Change Startups Should Pitch: Cheaper and Better
Most people & enterprises are busy.
Your pitch should focus on why your product is cheaper or better first.
Being good for the environment should be a small asterisk at the end.
Friday’s episode with Matt Lerner, former Director at PayPal & Founder & CEO of SYSTM:
Download the full transcript:
My 5 key takeaways:
Why Growth is more Science than Art
Science without art can deliver business results.
Art without science rarely delivers.
The best growth leaders can get artists & scientists working together well.
There are Only Six Channels to Grow
Salesperson outreach
Partner referrals
Paid ads
Google search
Content inbound
Influencer promotion
Finding the one channel that fits is 1% of the challenge.
The other 99% is getting it to work.
The Three Patterns of Leaders
Overthinkers
Underthinkers
Hire & Delegate Types
Over & underthinkers overbuild on intuition & slow everything down.
Hire & Delegate types hire too many specialists when startups should excel at only one or two key functions.
The Right Profile for the First Head of Growth
Don’t hire seniors who bring previous company playbooks & don’t understand your business.
I look for bright generalists with high rates of learning.
Hire people who can do 50% of the hard things and figure out the other 90%.
The Best Growth People Had No Marketing Experience
My best growth hires at PayPal had no marketing & product experience.
They were both former scientists & good at figuring things out.
They understood data & difference between causation & correlation.
Let us know what your big takeaways from this week’s shows were in the comments below!
Thank you for reading, and don’t miss the great guests we have next week:
Jason Lemkin, Founder @ SaaStr
Aravind Srinivas, Co-Founder & CEO @ Perplexity
Ashley Kelly, VP, Global Sales Development @ Rippling
Thank you for reading 20VC.
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