20VC Newsletter - 8th December 2024
Here are the transcripts and top takeaways from 20VC episodes released this last week.
Monday’s episode with Nik Storonsky, Founder & CEO @ Revolut:
Download the full transcript:
My 8 key takeaways:
The $45BN Company That Everyone Rejected at Series A
No one believed me at first.
I spent 4-5 months getting through every single investor.
They saw that my unit economics were negative & all said no.
How to Hire for Roles You Have Never Hired Before
I interview lots of people in that specific role.
I learn about everything they do & how they perform their roles.
Once I have a better understanding, I can select the best person for the job.
The Four Categories of Employees
There are 4 types:
Excellent: A self-guided missile; they select their own goals & reach it themselves.
Strong: You show them the goal & they reach it without needing any iterations.
Average: They require weekly iterations to reach a goal.
Below Average: They often fail to reach a goal even with weekly iterations.
All of your direct reports should be Strong or Excellent.
Get a Banking License Sooner Than You Think
It's much easier to get a license as a small bank.
Once you have millions of customers, regulators become much more thorough when assessing.
Smaller banks are faster because there's less to assess.
How Revolut Incubates and Launches New Products
We have a small team of 10 working on a project for 1 to 1.5 years.
We have over 20 bets running simultaneously.
Five of those worked, five to six failed, and the rest are in the middle.
Why Has No One Won the US Yet?
Tech companies do not want to be regulated.
Because of that they need to partner with a bank to use their license and platform.
Banks are not very efficient so this slows them down.
Why It Is Not Rational to Invest in the UK vs the US
The UK market is much more liquid.
Trading in the US is free.
The product offered in the UK cannot compete with its US counterpart.
Why Revolut’s Founder Thinks VC Is Broken
They follow the crowd & are very emotionally driven.
I’ve created a data science team running an ML model trained on startup data.
That model outperformed 95% of VCs.
Wednesday’s episode with George Arison, CEO @ Grindr:
Download the full transcript:
My 6 key takeaways:
The Future of Dating
People will not want AI agents doing the talking for them.
Most dating is limited by geography today & that’s not the optimal way to find your life partner.
Dating apps of the future will assess your life & provide you with hyperpersonalized matches around the world.
Does Grindr Have the Highest Revenue per Employee Head Number in Public Markets?
We have fewer than 150 full-time employees.
Our revenue per employee is over $2 million.
I am a strong believer in super lean organizations that get a lot done.
Silicon Valley Taught Us You Do Not Need Large Teams
A lot of the features we’ve launched have been developed by 1-2 people.
We only allocate more resources to a feature if it works.
We do not need multiple teams of 6-7 working on one product.
Why Are Most Startups Just Super Badly Managed?
Early startup hires all have a ton of self-accountability & do not need managers.
It does not stay that way as the company grows; you need management to set the culture & goals.
Most early hires are terrible managers.
Should CEOs Make Political Statements: Grindr Does Not
My job is to be the best CEO for Grindr.
Political statements prevent me from doing that job.
They are a distraction for my employees, shareholders & users.
The Insane Story of How Grindr Was Owned by the Chinese and Forced to Sell
Kunlun Tech bought a majority of Grindr and then fired the founder.
The US forced them to divest, and 3 individuals won the bid.
They did not have access to the code because the entire engineering team quit.
They restructured the company and saved it.
Friday’s episode with Zachary Bookman, Co-Founder & CEO @ OpenGov:
Download the full transcript:
My 6 key takeaways:
High Gross Retention is the Whole Game of SaaS
A lot of companies were growing 90-100% during ZIRP.
Now they are down to 10-20%
You have to be in the mid-high nineties range to win the game.
The Misalignment Between GP and Founder
The VC’s job is to find the next Uber or Pinterest.
A founder would dream of a $500M exit but it is not a needle mover for the VC.
They are incentivized to not care about us.
What Is PMF and Why Marc Andreessen’s Definition Is Wrong
It is when you can make the customer successful repeatedly & profitably.
Having prospects call you is great but I got deceived.
In our vertical a suite always beats best-of-breed products.
Why Founders Should Shrink Not Expand Their TAM
I’ve made too many mistakes trying to expand into the UK, Australia, etc…
The biggest mistake founders make is they have too large TAM.
To increase your chances of PMF, reduce the size of your TAM.
It will increase the precision of your PMF.
Why Valuations and Fundraising Is BS
You are judged & weighed by your exit & liquidity.
There is a lot of time between taking the money & giving it back
A lot of people lose sight of that.
How the Best Founders Manage Their Board
The board is for governance; they are not your mentors and coaches.
Your job is to increase the share price.
You have more facts than they do, use your independent judgement.
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:
Marc Benioff, CEO @ Salesforce
TS Anil, CEO @ Monzo
Guillaume Moubeche, Founder & CEO @ Lempire
Thank you for reading 20VC.
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