20VC Newsletter - Dec 3rd, 2023
20VC Newsletter - Dec 3rd, 2023
Top takeaways from 20VC episodes released this last week!
Monday’s episode with Keith Rabois, General Partner at Founders Fund and CEO at OpenStore, along with Mike Shebat, CEO & Co-Founder of Traba:
Download the transcript here:
Here are Harry’s Top Takeaways!
1. What is required at Traba:
Monday-Thursday: 12 hours in office.
Friday: 10 hours in office.
Reachable outside of hours and on weekends.
No side projects.
To win, you need to have an Olympian mindset.
2. Linkedin Should Have Been More Valuable than Facebook:
We did not have an Olympian work ethic.
We had French engineers who worked 35 hours per week.
Reid could not get the stellar quality of talent Mike has been able to get and that propagates across the team.
3. The Best Start in Their Twenties:
The opportunity cost of not giving everything to work in your 20s is insane.
The best people I have worked with were all interns.
Delian, Tony Xu, they put themselves in a position to be challenged.
4. Why First Time Founders are Better:
The best companies I invested in are first time founders.
You do not know what you do not know, you do not accept rules.
Pair yourself with investors/board members who can identify blind spots.
5. Why Culture is Like Concrete:
Culture is like concrete in liquid form. Concrete's really malleable. But once it solidifies, it takes like a jackhammer, which is disruptive and painful to break.
I was too passive in letting the culture formulate, I have struggled to fix it.
6. Why Venture is Like Baseball:
If you're world class, you're right 40% of the time.
Partially because it's such a big challenge. Reinventing an industry is a heroic effort.
Being 40% right and 60% wrong is what you're signing up for.
7. Why Founders Fund Do Not Invest in Remote Companies:
Over the last 50 years, there are almost no examples of people building companies successfully that way.
I led Gitlab at KV, open-source mode enabled that style of work.
Otherwise, it is very obvious why it does not work.
8. Biggest Change Needed at Founders Fund:
We need to be younger, we need to cultivate up and coming talent.
The problem and challenge is projecting who's likely to be a great investor.
It is even harder than detecting who is a great founder.
9. Where do Interest Rates Go From Here:
They are not going much down.
We have sustained inflation for structural reasons for a decade.
There's many strong reasons why this low interest rate environment was a one time in history kind of world.
10. Why Side Projects Do Not Build Great Companies:
Google has the 20% side project rule but if you are a normal company that does not have 99% gross margins and a monopoly business, then having your team spend 20% of their time on side projects will mean you do not win.
Wednesday’s episode with Guillaume “G” Cabane, Co-Founder and GP @ HyperGrowth:
Download the transcript here:
The Top 10 Takeaways:
Prioritize Learning from Experiments: Focus on running multiple experiments simultaneously to learn whether they succeed or fail, rather than just seeking wins.
Disregard Vanity Metrics: Reject any KPI that is vanity-based, such as traffic. Focus solely on weight-adjusted pipeline dollars.
Email's Endurance: Email as a tactic remains strong despite predictions of its demise. It's still an effective tool for growth strategies.
Value of Past Founders in Growth Roles: Hiring past founders who have not succeeded in their ventures can be beneficial for growth roles. They usually have the right skills and mindset needed for growth.
Cold Calling's Resurgence: Cold calling, which had fallen out of favor, is experiencing a resurgence thanks to new tools and large language models (LLMs).
Creative and Humanized Outreach: Successful outreach often combines creative and personalized approaches that resonate with the target audience.
The Importance of Testing Channel Depth: It's crucial to test the depth of marketing channels by incrementally increasing budgets to determine their limits and efficiencies.
Aligning Marketing KPIs with Revenue: All marketing KPIs should be aligned with revenue, converting engagement metrics into dollar figures based on lead scores and close rates.
Early Stage Growth Hiring: For early-stage companies, hiring for growth should focus on individuals who are innovative, willing to take calculated risks, and can think outside the box.
The Relevance of Community and Relationships: In the face of increasing AI-driven communication, the importance of social proof, community, and relationships is likely to grow. This includes leveraging personal connections and trusted networks for marketing and growth.
Friday’s episode with Dominik Richter, CEO & Founder of HelloFresh:
Download the transcript here:
The Top 10 Takeaways:
Venture Capital Decision: Dominik discussed the crucial decision-making process when raising significant venture capital, particularly choosing between selling the company or taking it public.
Childhood Dreams and Entrepreneurship: Dominik shared his childhood ambition to become a professional footballer and how his early passion for sports influenced his entrepreneurial journey.
Transition from Sports to Business: He talked about the valuable lessons learned from sports, such as dealing with disappointment and competition, which he later applied to entrepreneurship.
Early Career at Goldman Sachs: Dominik's brief stint at Goldman Sachs was a pivotal experience, leading him to realize that his true passion lay in entrepreneurship rather than traditional corporate roles.
Genesis of HelloFresh: The idea of HelloFresh was born out of Dominik's desire to fill a void left by his sports career and his inherent drive to create and lead a business.
Challenges in Starting HelloFresh: He candidly discussed the early challenges faced in the business, like dealing with complex supply chains, marketing, and a memorable incident involving a truckload of potatoes.
Philosophy on Business Complexity: Dominik expressed a preference for tackling complex business problems, believing that solving hard problems creates significant competitive advantages.
Approach to Competition and Innovation: He stressed the importance of paying close attention to competition as a source of innovation and learning, rather than dismissing it.
Public Market and IPO Insights: Dominik provided insights into HelloFresh's IPO, emphasizing the irrelevance of the first-day price and the importance of seizing market opportunities.
Future Outlook and Personal Motivation: He shared his future aspirations for HelloFresh and personal motivations, highlighting his ongoing passion for problem-solving at scale and the potential for HelloFresh to expand into new business lines.
Thank you for reading this week’s newsletter! You can find links to all our content across platforms here: https://linktr.ee/20vc