20VC Newsletter - 17th November 2024
Here are the transcripts and top takeaways from 20VC episodes released this last week
Monday’s episode with Matt Grimm, Co-Founder of Anduril:
Download the full transcript:
My 8 key takeaways:
Is Iran the Greatest Evil and What About China
Yes but China is our most complex & difficult adversary.
Their approach to basic human rights & free speech are antithetical to the West.
They have an ambition for Empire building with their activities around Africa & Taiwan.
Why Does China Own Too Much of the Supply Chain?
A majority of our motors, circuit boards, and chips all rely on Chinese processing & mining.
They control a majority of the rare earth mineral supply chain.
It is very hard to divorce ourselves from any Chinese influence in practice.
The Future and Economics of War
We are already seeing this in Ukraine & Iran: Missiles & drones are mass produced at an extremely low cost.
The Patriot missiles used to intercept one of them cost millions of dollars.
The cost curve is not in our favour.
Should TikTok Be Banned in the US
We should have banned it years ago.
Our largest adversary is controlling what gets mainlined into the psyche of our youth.
This will have long-term consequences on our country.
Top Defence Companies Outperform the S&P
Northrop Grumman has a compounded annual shareholder return of just over 20% over the past 15 years.
Lockheed Martin and Boeing have achieved around 15% each.
The S&P 500 returned 11.6% during the same period.
Why Anduril Hates SPV Brokers
A lot of them are operating on extremely limited information.
They turn to desperate/careless investors & lie about which shares they have access to.
A lot of investors don’t even understand fee structures & they end up paying steep premiums.
Biggest Lesson From Peter Thiel
There is no alpha in consensus.
If you follow the crowd you will perform as well as everyone else: real gains come from being contrarian.
This is incredibly hard to implement in practice.
Why Founders Fund Is the Best VC in the World
They are always founders-first.
Many VCs make that claim & few actually do.
Brian Singerman personally defended us when defence startups were under a lot of scrutiny.
Wednesday’s episode with Markus Villig, CEO & Founder @ Bolt:
Download the full transcript:
My 7 key takeaways:
The €5,000 That Turned Into an $8BN Company
I was a 19 year-old with no money.
My parents agreed to set aside €5000 from my uni fund, but if the project fails I have to cover rent myself.
That was my first funding to get the company off the ground.
How a Real Estate Company Turned $500K Into $50M With an Investment in Bolt
None of the “sophisticated” VCs wanted to fund us in Europe.
We went to a real estate firm in Estonia & pitched them.
They had never heard of a startup before but wrote a €500K check because I seemed like a good guy.
Now that investment is worth over 100x.
The Trick That Launched Africa for Bolt
We ran a few ads across multiple cities to see how many customers signed up.
We calculated the CAC ratio then identified which cities we’re going to launch in.
Seven cities had great numbers so we only hired there.
This $8BN Company Hired a Kid on Skype to Run Africa
We hired a kid from uni over a Skype call to run all the operations in Africa.
He set up offices & trained drivers before the launch.
Now Johannesburg alone became over half of our business.
Intelligence Over Hard Work
I rather get somebody who’s very smart, works a bit less hours but makes the right decisions.
You cannot compensate for intelligence with hard work.
This does not work in our business.
Why Despite Waymo It Will Be Years Before Self Driving Is a Force
Tesla & Wayve are making great progress but they are still years away from a reliable service.
Waymo & Cruise are good but the costs to produce a vehicle is too prohibitive.
Regulation will take a few more years before it is sorted.
How Sequoia Came to Write Their Largest European Check Into Bolt
The Europe team reached out, said they’ve done their homework & asked to see our metrics.
They got back within 48 hours & joined the round.
It was the largest European check Sequoia has written at a $4.5BN valuation.
Friday’s episode with Raman Malik, Head of Growth @ Perplexity:
Download the full transcript:
My 7 key takeaways:
There Is No Middle Ground, You Have to Be First to a Channel
Everyone in growth is searching for the next alpha.
All channels are extremely crowded now.
If you’re not first to a channel, you need to be significantly better than everyone else.
Why Are Micro Optimisations Underrated?
It’s the small things that will drastically increase the overall growth of the company.
Every quarter, we try to take at least a couple of big swings.
It has to be high risk, high reward.
What Is the Sign of a Retained User on Perplexity
If they ask 3 queries in the first session, we’re onto something.
Most users who reach that stage understand the value of Perplexity.
They have an extremely high chance of coming back.
How Partnerships Have Changed the Game for Perplexity
It is much more effective at driving distribution vs. traditional advertising.
People are more likely to use it when it’s bundled into an existing product.
We’re not losing money by giving away free Pro trials if it can capture you as a user.
Is Brand Marketing BS
You need someone to hear about your product 3-7 times before they’ll give an honest trial.
It is incredibly hard to measure the value of it.
BUT just because it’s not measurable doesn’t mean it’s useless.
The Good the Bad and the Ugly of AB Tests
Three scenarios:
Good: It is a well-scoped test that adjusts our direction & cadence.
Bad: It is poorly scoped & we do not get anything useful out of it.
Ugly: Someone is running it purely for their performance review.
Why Perplexity Likes to Hire Former Founders
They are much more comfortable taking massive swings.
They are more willing to take more risks & fail.
Mike Maples @ Floodgate: Early startups are like a jazz band; you need to throw out the sheet music & riff off of each other.
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:
Alain de Botton, Author of Essays in Love.
Cem Sertoglu, Managing Partner @ Bek Ventures.
Dan Fougere, Managing Director @ Shore Drive Capital.
Thank you for reading 20VC.
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