Interesting guidance and change throughout the years. I would look into the thought process of the other prominent, upcoming and even newly established venture capitalists to learn the guidance. USV’s three investment theses throughout the past decade:
- Thesis 1.0 – Applicable layer of the web and focus on network effect as the defensibility/scalability factor; Invest in large networks of engaged users, differentiated by user experience, and defensible through network effects. (i.e. Twitter, Behance, Kickstarter)
- Founder of Behance, Scott Belsky, is a smart guy to learn thought/investment process from.
- Thesis 2.0 – Market-specific networks: networks in high-value niches that are differentiated and defensible, partially because they are domain-specific. These networks generally have more subtle or less obvious network effects, precisely because they involve something more specific and tight (i.e. Lending Club, Stash, Carta, MongoDB)
- Thesis 3.0 – Trusted brands that broaden access to knowledge, capital, and well-being by leveraging networks, platforms, and protocols. (i.e. Flip, Dwolla, C2FO).
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- Flip is an interesting one given Americans are less immobile than a decade ago, meaning we as a population tend to move intrastate rather than interstate. And even intrastate mobility within our population is declining. One could very well be the concentration of human and financial capital in metropolitan areas such as SF, Austin, Seattle, NYC, LA, Boston etc. Would be interesting to see how the macro US demographic shifts plays into the LT viability of their future revenue.
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- Dwolla is another interesting one; remember using them for one of my past side projects, they charge lower fee than Stripe but they cater to businesses and startups in the single 5-digit MRR. Their pricing strategy basically segment out the Stripe fee. Interesting thing about Stripe is the early-days of Stripe was built on just < 10 lines of codes.
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- C2FO raised a lot of capital for US-based startups. They basically provide access to working capital for established companies and less so on startups. It’s targeting companies with challenges such as turning of inventories which cause short/medium-term liquidity demand. As the dull name of the company implies, it’s definitely in the B2B businesses.
Intersection notepad 