Opinions and Thoughts on Venture Capital, Investing, and Startups
A regular question of my students at UC Berkeley is "How do I select my first/next job? How do I know the culture is right for me?" Paraphrasing Jordan B. Peterson When a society is corrupt, then the powerful rule. When a society isn't corrupt, then the great have authority. What is greatness? When the … Continue reading Startup Culture Observations
There is a fundamental truth: Almost all ideas are wrong. It doesn't matter if they are your ideas or someone else's ideas. They are probably wrong. And even if they strike you with the force of brilliance, your job is to assume, first of all, that they're probably wrong, and then to assault them with … Continue reading Almost All Ideas are Wrong.
In my dealflow I are often see great features, great products, and great companies. But I can only invest in great deals. Passing on your deal is not a judgement on your product, nor on your company, nor on your character. This isn't personal. Great Features. 10x Speed at 1/10th of current cost. Because when … Continue reading Great Product – Wrong Deal.
Aside from the Books I Recommend, I noticed that every two weeks or so someone asks me about good blogs or podcasts to follow. For the longest time I had mixed feelings about it. Books are static. The opinion (and sanity) of bloggers and podcasters might change. I also don't catch every podcast or blog … Continue reading Podcasts and Blogs I Recommend.
Statistically, startups mostly fail. We love to think of ourselves as great investors. But Venture Capital fundamentals still didn't change: Fund returns are driven by outliers, and returns are concentrated in few firms. All VCs are constantly evolving and refining their thinking, processes, conviction. That's why we write long investment memos: Not because be need … Continue reading Venture Capital: Preparing for Failure.
If your employees had magically one additional workday more per week than your competitor, what would you have them work on? If you would magically have $50,000 more budget per week, what would you spend it on? Many startups are struggling with pricing when their product or solution is saving cost or time (or both): … Continue reading The Most Important Pricing Questions for Cost Saving and Efficiency Products
"We've created a Minimum Viable Product. It's doing well. Now we're focusing on repeatable sales motion." You probably created a minimum viable technology that could potentially address a need or be part of a product. You did not create an MVP. A product has a price, positioning, can clearly communicate a solution to a real … Continue reading MVP: “Viability” is Decided by the Market and not by You!
I had two pitches last week where the entrepreneurs were talking about huge billion Dollar markets ... but the initial "customers" they were talking to didn't feel the urgency and sales were lagging. "I know this is a huge market. There is a lot of research about it. We need to spend more money for … Continue reading Huge Markets with No Revenue: Initial Product-Market-Fit
The number of new early-stage VC funds with a focus on US-based pre-seed, seed, and early-stage startups grew from 163 (vintage 2014) to 490 (vintage 2019) [1]. As I wrote two weeks ago in "Rapid Decline of New U.S.-based IT Startups", the number of newly founded US startups in information technology declined from 5,856 (2014) … Continue reading US: More Early-Stage VC Funds are Targeting Fewer Startups
"Every A-round is $10M nowadays. That's the new norm. There is too much money in the market." I think I carelessly quipped something along these lines in the past three weeks. And I was wrong. I had fallen into the average-bias of VC-world, into false signaling of few outliers. As I wrote earlier (and so … Continue reading Massive Early-Stage Funding — I Was Wrong.