Since a lot of people were asking for more details, today I want to do a quick case-study on Modus and how we invest cold generally speaking (or "direct" as someone suggested I use instead)

Read on >>
1) First off - let's establish baseline. 15% of the deals we do are direct.

So, if we invested in your co & someone (ANYONE - your friend / a VC / an acc / your dog) referred you, you are marked as a referral even though we often don't even know our referrers well / if at all..
2) 1 of these 15% was Modus who closed a very successful exit last week.

Let's walk through the timeline and the interactions.
3) First, they applied on our website hustlefund.vc - yes, we do read ALL of these. (tho depending on time of the yr, we can be slow :( ) But this is where ALL pitches go whether referred or not.
4) They also cold emailed in parallel. This is what they sent Apr 2018 - we'll dissect this in a min:
5) As you can see, they are SUPER EARLY. That doesn't scare us.

That being said, even if you are early, there are always interesting tidbits that you can highlight.
6) This email has:

a) social proof another VC wanted to invest
b) potential customers they were onboarding & LOIs for more

LOIs don't mean much to me, but we don't care about traction @HustleFundVC so it was a bonus. All in all, I thought it was a clear, concise email.
7) I looked at the idea and the go-to-market. Most investors care a lot about team. I care about whether I think the go-to-market will be easy or hard.

More on that here:
8) In the biz they are in, homebuyers don't pick their title & escrow co when buying a house - real estate agents do. So if they did a good job being valuable to real estate agents, the go-to-market could be great.
9) I took the phone call on May 2 about 10 days later. Typically it takes me 1-2 weeks to get a mtg depending on how many other mtgs are already lined up.
10) I made the offer on 5/4 - 2 days after the mtg. We have a champion model @HustleFundVC so we don't need to have an all partner mtg about writing a first check which allows us to usually deliver a decision within 48 hours after the first mtg.
11) tl;dr there isn't a whole lot to dig into at pre-seed (as you could see from the initial email), so that's how we are able to make decisions so quickly.

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More from @dunkhippo33

5 Oct
Time for another tweet storm! This one is about fast growth vs slower growth. And I'll start with a story about my friends.

Read on >>
1) In my sr yr of college, 3 friends got together to build an e-commerce co. In typical "noob entrepreneur" fashion (and I've definitely been there too!), they decided to start selling - call it product X - because they were just really passionate about prod X.
2) They didn't think about the COGs or margins. Or how wholesale works. Or sourcing. Or customer acq. They just knew they liked prod X. So they set up a website w/ a shopping cart. And started trying to buy product X in bulk and resell online.
Read 23 tweets
22 Sep
As an investor, I think it's impt to understand your strengths and weaknesses. And sometimes your strength IS also your weakness.

1) Some self-reflections here:
2) First and foremost, I'm a marketer. By training and background. At big cos and at my own past startup(s). My startup even sold to marketers. I even used to do affiliate marketing.

Customer acquisition is THE #1 thing I think about and live, eat, breathe.
3) And often, esp in software, where PM fit is not clear, customer development and cust acq is key priority to figure out and derisk.

As such, I orient most of my thinking around how do I think a co can acquire customers. What is that angle and scalable path?
Read 12 tweets
22 Sep
Some takeaways from @bernardjhuang 's SEO online event.

1) How to know if you should even do SEO?

You are 1 of 2 companies.

A) You are like a TripAdvisor (a content site) where SEO is the only thing that will allow you to win if you can do SEO better than your peers.
2) OR

B) You get "decent" CTR on Google AdWords (if you had the organic equivalent would it be worth it to spend time on?)

And you are post PM fit.
3) Even @bernardjhuang 's co is an SEO tool! And he is post PM fit. But working on SEO for his own company @Clearscope is not even top priority.

Other cust acq channels are higher priority.
Read 12 tweets
18 Sep
1) I want to talk about investor kindness in the startup ecosystem.

Personal story - I pitched an investor for my co yrs ago:

Me: "So what do you think?"

Him: "I don't want to say the wrong thing & call you a meek Asian woman, but I question how you'll lead a team of 100 ppl"
2) Needless to say, I was completely shocked that someone in this day and age would say something like that. Outloud. In Silicon Valley.

I was so stunned that I was wondering whether I had actually heard that correctly and if I was actually in a bad dream?
3) But it was in fact reality.

My next thought was that I needed to come up with a response really good and really quickly to respond with otherwise I would be a "meek Asian woman"!
Read 16 tweets
8 Sep
Some takeaways on growing a company to $1b/yr in revenue from @mark_rosner:

1) If you believe your product can accomplish a particular goal, you may need to dangle incentives to get ppl to just try it.

E.g.: maybe you even offer to pay your customer to get them to try it.
2) Hiring lots of people becomes a detriment. Whenever a startup touts how many ppl they have, he gets scared. Because ppl cause problems.

To the extent possible, refine processes & tech so you can make a lot of $$ per employee. For @AppLovin they only had a couple hundred ppl.
3) Try to "test" potential hires by structuring shorter term contracts. And you will know in the first month or two if someone is working out.
Read 13 tweets
6 Sep
I saw a pretty fantastic documentary last night called Netflix vs the World (on Amazon Prime).

Some interesting tidbits and lessons learned:
1) Background - @reedhastings was the initial $2m 😲angel check into the company (from the proceeds of his successful startup)

The co worked on a lot of biz ideas before landing on trying to disrupt video. There was a lot of e-commerce but no one was touching video at the time.
2) Marc Randolph and Reed Hastings knew that the big reason no one was touching video was that the VHS format was a real bear. Clunky and large. Hard to ship.

Anyone ever seen a VHS tape? I remember those from way back in the cobwebs of my childhood memories.
Read 27 tweets

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