I'm seeing an acceleration of "Keeping up with the Joneses" behaviors in the startup ecosystem.
Founders want to grow crazy fast, raise lots of money, and issue press releases about their valuations so that they're "ahead of their peers".
2/4: VCs care about eye-popping rounds, markups, and backing the market-leading logos so that they're "ahead of their peers".
Systemically de-risking a business over time matters but is being brushed under the rug in favor of more immediate and easier to highlight achievements.
3/4: This isn't a surprise given the industry's reward system and the need to stand out.
For a startup, public vanity metrics help paint the narrative that it's winning. Winning attracts talent. And it's the talent that then helps materialize the narrative into reality.
4/4: On the VC side the story is similar.
Public vanity metrics help paint the narrative that a VC firm is winning. Winning attracts capital and great businesses. And once the positive selection flywheel starts to spin, a firm's competitive edge grows over time.
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Everyone knows the speed at which VC deals are being done has accelerated to a dizzying pace.
While this can be good for some Founders, it’s magnifying a flaw in the VC ecosystem.
A few thoughts on “Bad Pattern Recognition” and how it’s creating have and have-nots: 🧵👇
2/21: 14 years ago I hung up my operating hat to become a Venture Capitalist. Knowing nothing about investing, I sought out seasoned Investors so that I could learn from their experiences. Borrowing a degree sounded like a better strategy than earning one from scratch.
3/21: It shouldn't come as a surprise that much of the advice was generic and in the "no duh" camp. It started to feel like many Investors’ diligence processes consisted of evaluating startups on a laundry list of “generally true” criteria. Ticking the right boxes = Term Sheet.
QED Investors has invested in 150+ startups over 14 years and consistently delivered outstanding results. Today, we announced a new $1B+ vehicle to continue on this journey.
In honor of this milestone, here are my 14 biggest insights from 14 years at QED: 👇🧵
2/29: Insight #1: It’s more important to be an average Investor in a target rich ecosystem than a great Investor chasing windmills. It’s been a great decade for #fintech which made our jobs easier.
3/29: Unseating profitable players is a great starting point. We’ve invested in 20 companies now valued at > $1B+ (with more right around the corner). Some are generating $1B+ of revenue and very profitable. Taking high margin revenue away from incumbents is a great strategy.
@QEDInvestors has invested in 150+ startups over 14 years and consistently delivered outstanding results. Today, we announced a new $1B+ vehicle to continue on this journey.
In honor of this milestone, here are my 14 biggest insights from 14 years at QED: 🧵👇
2/29: Insight #1: It’s more important to be an average Investor in a target rich ecosystem than a great Investor chasing windmills. It’s been a great decade for #fintech which made our jobs easier.
3/29: Unseating profitable players is a great starting point. We’ve invested in 20 companies now valued at > $1B+ (with more right around the corner). Some are generating $1B+ of revenue and very profitable. Taking high margin revenue away from incumbents is a great strategy.
The idea that each company has its own culture isn’t questioned. Most people claim that it’s important and a contributor to an organization’s success or failure.
But guess what? People struggle when asked to explain what culture is!
A framework and thoughts on the topic:
2/36: A truism of business is that it’s a near impossibility for a single person to accomplish a “big thing” alone. Well run organizations assign accountability for the “big thing” to a Leader who is tasked with focusing the collective energy of a team to deliver a solution.
3/36: Leaders exist to kink the curve on outcomes. Given the same task, a great Leader is able to deliver a high-quality solution with a greater probability than a poor Leader can. They do this by mastering the “big three” levers of strategy, resource allocation and culture.
Do you want to know a secret about Board meetings?
The secret: They aren’t unique!
Seasoned Board Members discover that Board meetings fall into very distinct categories.
What follows is a classification framework and a few insightful nuggets (including a soundtrack).
2/39: I used to think that Board meetings were mysterious gatherings of powerful people in smoky rooms where fights would break out and massive company-making or breaking decisions were made.
3/39: I imagined that as a Board member I’d dramatically swipe everything off a massive table to make room for a giant map that I would use to brilliantly explain the master plan.