20VC Newsletter - 20th Oct 2024
Here are the transcripts and top takeaways from 20VC episodes released this last week!
Monday’s episode with David Frankel, Managing Partner @ Founder Collective:
Download the full transcript:
My 7 key takeaways:
1. Has DPI Died in 2024
Our fund III (2018 vintage) still has no DPI.
Even our smaller hits in Fund I and II have given DPI.
It was a perfect storm of ZIRP & day trading during COVID.
Reserves Is the Toughest Aspect of Venture
When we reserve more, I’m worried the market will go crazy.
When we reserve less, I’m worried the companies will need more funding in the future.
It is hard to get it perfect.
The Hard Truth About Seed Fund Economics
There is more polarisation than ever before.
You need to have 4-5 good fund returners.
It’s better to sell 4 companies at $250M each than 10 companies at $100M each.
Never Sell Your Winners
Uber, Trade Desk & Coupang all returned the fund.
I would have never sold a single thing.
You want to be in your winners forever.
Casino Capitalist and the Sin of the Era
In 2 companies I invested in, John Curtius @ Tiger wrote a $20M on $80M check after one call.
The boatload of capital was the biggest sin of the last era.
How Founders Can Know if an Investment Is Meaningful to a VC
They have to join the board.
A $5M check with a board seat is a better signal than $10M with no board seat.
It shows they are willing to spend time there.
Why Failed Founders Tend to Be More Successful Than Super Successful Ones
Super successful founders come back & think they can conquer anything.
Generally that has not worked out.
Failed founders come back hungrier: They have a chip on their shoulder.
Wednesday’s episode with Zach Perret, Co-Founder & CEO @ Plaid:
Download the full transcript:
My 6 key takeaways:
How Plaid Uses Atomic Teams to Build New Products
It should consist of a PM, few engineers, a designer or data scientist.
Your job is to give them enough resources, attention & protection.
This is how we approach new product development.
The $15BN Company That Could Not Raise a Seed Round
We lined up a $500K round at $2M in the early days of Plaid.
Our lead investor dropped out & everybody else followed.
Only 3 people stayed and gave us $60K and we survived.
Why Grinder Problems are the Most Valuable to Solve
If you’re willing to grind it out, you will have a unique product that nobody is willing to build.
We had to do banking integrations in the early days of Plaid.
The process was painful but the results were worth it.
The Worst VC Advice That Most Founders Take
Three things:
Introducing OKRs too early.
Putting revenue metrics before PMF
Encouraging hiring great execs then giving them space.
Why OKRs are BS
They were built for manufacturing.
Just because it worked for Intel doesn’t mean it works for your software company.
Find something that actually fits.
Why Founder Mode Is Dangerous and Will Encourage Bad Behaviour
The whole point was to delegate effectively.
Stay close to things that really matter & far away from things that don’t.
Micromanaging everything will never work.
Friday’s episode with Antoine Le Nel, Chief Growth & Marketing Officer & Partner @ Revolut:
Download the full transcript:
My 7 key takeaways:
The Winning Mindset at Revolut
We are never happy with our success.
We rarely hit our targets because they are always set insanely high.
We are never complacent.
The Best Product Managers Do Not Need A/B Testing to Know What Is a Good Product
We expect 10x results at Revolut.
You don’t need an A/B test to measure a 10x result.
We launch & see if it works.
How Revolut Is Able to Have Such High Product Velocity
We split the company into as many “startups” as possible.
Every team is self-sufficient.
If you’re not overly interdependent, you can maintain high product velocity.
The Hailed Marketing Measurement That Is Banned at Revolut
We never look at CAC.
You’ll always acquire the worst cohorts if you only focus on CAC.
We prioritize ROI: Sometimes you gotta pay more to get the best customers.
Why Localisation is BS in Product
People click on the same things everywhere.
The extra performance you get by becoming localized is not worth the effort.
We became #1 in Romania & Norway using the same strategy & they are very different countries.
How Revolut Uses Vending Machines to Grow
We placed vending machines at airports with unlinked Revolut cards.
Customers can create an account & activate a card instantly.
It is great for measuring attribution & ROI.
Why Not Prepping for Meetings Leads to the Best Meetings
We have 20-25, 30-minute meetings every week.
The meetings are problem solving sessions: The teams do not prepare beforehand.
When you’re constantly receiving fast feedback & iterating, you’re always on-course.
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:
Mamoon Hamid, Partner @ Kleiner Perkins
Mark Goldberg, former Partner @ Index Ventures
AJ Tennant, Vice President, Sales & Success @ Glean
Thank you for reading 20VC.
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