20VC Newsletter - 29th Sept 2024
20VC Newsletter - 29th Sept 2024
Here are the transcripts and top takeaways from 20VC episodes released this last week!
Monday’s episode with Dmitry Gurski, Co-Founder @ Flo:
Download the full transcript:
My 7 key takeaways:
The Most Required Trait in a Founder is They Have to Be Crazy
The odds of success are incredibly low.
You cannot justify that with any rational thinking.
If they’re smart they would work for McKinsey.
How Flo Won and Why They Invested $150M into Product
All of our products were similar when we first started.
BUT we put in $150M into product alone.
We created a super app which was so good it won naturally.
What No One Understands About Retention
It’s not about the product but the user case.
A perfect gym app will have terrible retention because gyms have terrible retention.
Good retention is extremely rare in health & fitness apps.
Vinod Khosla on Why Company Building is like Marriage
You have many opportunities in your marriage.
But to be happy you need to choose one and focus.
Founders should do the same with business models.
Why Survival Not Speed is the Most Important Thing
You need to iterate several times to find something that works.
Increasing speed but wasting resources is terrible advice.
You need the right balance between speed & resource distribution.
The Main Job of an Early Stage Investor
They distinguish between cases with 100% vs. 99% failure rates and small vs. big potential outcomes.
The most significant job is understanding the team is not stupid & knows what they’re doing.
Identifying those 2 will reduce the failure rate from 99% to 95%.
Consumer Is Amazing to Invest in Cos of the Culture Shift of Paying for Subscriptions
Our initial goal was to monetize 5% of the American audience.
Now we’ve monetized ~25% and it’s still growing.
The culture is shifting, people have accepted the idea to pay for subscriptions.
Wednesday’s episode with Eric Vishria, General Partner @ Benchmark:
Download the full transcript:
My 6 key takeaways:
Foundational Models are the Fastest Depreciating Asset in History
BUT there is still value in the model layer.
OpenAI, Anthropic, Meta, Google, xAI are all competing for state of the art models.
It will ultimately benefit consumers.
The Most Exciting and Disorienting Time in History
The prize is so big, if it works there will be giant outcomes.
With that logic we can justify ridiculous investments on any fundamental basis.
BUT we also haven’t fully captured that much market value yet.
Why Benchmark have been more active than ever
The game on the field now is we have major shifts in AI.
It’s probably a bigger shift than any previous shifts combined.
We are now more active than we have been since 2010.
It Is Not All About Nvidia
I don’t believe they will be the only game in town in the infrastructure layer.
The entire assumption right now is that Nvidia will continue to run at this level if AI is here to stay & there’s real ROI.
I don’t believe that.
How to Identify Winners in a Hyper Competitive Market
I look at 2 things:
Is the entrepreneur extraordinary & do you believe in them?
Do they have an insight that is cogent?
The more competitive the market, the higher the bar you have to hold these 2.
Can AI Make Money: Search Did Not Figure Out Monetization For 5 Years
Google only introduced monetization in 2000.
We are still in the early years of AI.
We’ll eventually figure out monetization, but it will not be $20/mo or an API bundle.
Friday’s episode with Jeetu Mahtani, EVP Customer Success @ Hubspot:
Download the full transcript:
My 5 key takeaways:
How did HubSpot expand internationally so successfully?
We sent 5 expats over when we opened the Dublin office.
We hired 5 more people domestically so it was one on one.
So if it fails, it's not because we didn't do everything we could control. We did everything we could control.
How to test demand before entering a market
Think about demand before you even open an office in a non-English speaking country.
I would hire a marketer 18-24 months in advance before hiring my first sales rep.
Having no leads & only cold calls is not the best way to set up your team for success.
Why I Hate Discounting
It is a disservice to the customer and the company.
Only use it if there is a need like a budget gap, even then the discount should go away in the second year.
It should not be so prominent in your sales process.
Why Customer Testimonials are BS
You are mixing too many variables & diluting your value as a sales rep.
Your focus should be on identifying what the customer needs.
If the customer doesn’t value you as an advisor, I would question if they are a good fit.
Biggest Hiring Mistake in Japan
We couldn’t use the expat approach so we hired from day zero.
Some of our early hires sounded like westerners - They did not get it.
You need to understand the local business culture to sell there.
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:
Donald Tang, Executive Chairman @ SHEIN
Bret Taylor, Co-Founder @ Sierra
Thank you for reading 20VC.
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