I wrote this to my partner the other day. I’m not going to provide the context. It doesn’t matter. It could have been about almost anything in the startup sector right now.
“the biggest thing that is wrong with the startup sector right now is entrepreneurs and their teams are too focused on valuation and not enough focused on business fundamentals”
There are a bunch of reasons why we’ve ended up in this place and my friend Bryce talked about some of them in his talk at XOXO. He posted the transcript of his talk this week. It’s a good read.
But in case you aren’t going to click through and read it, here are a few choice quotes from it:
- I think there’s something that comes with being an outsider in an insider’s game.
- Once you start taking other people’s money, it becomes very difficult to stop taking other people’s money.
- they are building for investors and not necessarily building for customers
- So we can’t talk about venture capital without talking about Unicorns, right?
- 99.93 percent of companies are using a product, venture capital, that really doesn’t work for them.
- you have entrepreneurs building companies, building customer bases, designing interactions with their users in order to make themselves appealing to venture capital
- Turns out when you invest in things that VCs won’t, you end up with a bunch of companies that VCs don’t want to invest in.
- what if we surrounded our founders with other people who weren’t focused on fundraising and valuation, but focused on revenue and customers?
- Rather than make people move, we decided to let people bloom where they are planted.
- The reality is we tried and weren’t able to pull it off.
- Just last week, our largest investor passed.
Bryce is not having an easy time raising a dedicated Indie.vc fund. Neither did Brad and I when we raised the first USV fund in 2004. We got 20 passes for every yes.
I’m a contrarian and that tells me that Bryce is on to something. As you might imagine, the Gotham Gal and I said yes when Bryce asked us.
