Thread by @dunkhippo33

Today’s tweet thread is about customer personas @HustleFundVC.

I’ll give you a qualitative look at some of our early findings under the hood across 300+ portfolio companies at Hustle Fund.

Read on >>

1) First what is a customer persona?

A customer persona is a made up person who represents the traits and lifestyle of your target customer.

2) @HustleFundVC we have 3 customer personas:

-Serial Sally
-Hotshot Harry
-Ambitious Alan

Each one has a fictitious set of characteristics that are similar to our segments of founders

3) I think from reading these 3 you can guess their fictitious backgrounds. But to spell it out a bit:

-Serial Sally has had a successful startup + exit before, has money in her own right, and can pick any investor to work w (and doesn’t really need money)

4) Hotshot Harry has worked at a FAANG co, maybe studied CS at MIT. Every investor is throwing money at him but he has not started a company before.

5) Ambitious Alan has a ton of drive, tenacity, and just gets things done. Scrappy and generally pretty frugal. Limited pedigree and/or network but has something to prove.

6) At @HustleFundVC all 3 are our “customers”. Broken down by segment, our portfolio consists of

Ambitious Alan - 80%
Serial Sally - 10%
Hotshot Harry - 10%

7) It’s important to know everything about your customer personas. Where do they hang out? What do they eat for breakfast? What are their problems? What is their personal life like?

This helps you understand what makes them tick and where you may be able to repeatedly find them.

8) In our case, if anyone ever wondered why we spend so much time on Twitter, it turns out that this is our #1 customer acquisition channel. In particular, this is where Ambitious Alans especially learn about us.

15% of our portfolio comes from completely cold via our website.

9) Serial Sallies & Hotshot Harries tend to come through other channels.

People we know from before. Friends referring other friends.

But we ask that everyone go through the same application process on our website regardless of the channel to maintain the same process.

10) An interesting, more recent phenomenon that we are grateful for is the opportunity to work w founders who prev were Ambitious Alans whom we backed on their first companies, who had exits, and turned into Serial Sallys and came back for their next ventures. Thank you!

11) So which group (4 years into the founding of Hustle Fund) is returning the highest multiple?

Is it:
A) The Serial Sallies
B) Hotshot Harries
C) Ambitious Alans

?

12) We are only 4 yrs into Hustle Fund but as of now, it turns out that as an overall segment, it’s the Serial Sallies leading the pack.

BUT, not by much - the Ambitious Alans are close…

And then lastly, the Hotshot Harries.

13) So what does this all mean?

It’s hard to fully interpret because it’s only been a short period of time.

But the data suggests to me a couple things:

a) on an individual level, there are winners in all 3 categories. You can find great founders literally everywhere

14) And for that reason, that’s why we have an open process such that anyone can apply. AND that everyone’s application gets evaluated w the same process

15) b) It also suggests that the old adage of VC requiring warm intros or referrals is not correlated w success.

16) c) when you find “winners”, what really impacts returns is how large the multiples are of those companies.

Multiples are driven by entry points and exit points.

17) And there are basically two different games investors play.

If your strategy is to go after competitive deals (generally Serial Sallies or Hotshot Harries), then by definition your entry pts will be higher and your exit pts need to be super high.

18) Alternatively you can go in at lower entry pts in less competitive / non competitive deals and your exit pressure doesn’t need to be as high.

Both strategies work.

19) But investors must understand what game they are playing and understand what qualities are really impt to pay up for if vying for a competitive deal.

20) Another interesting finding is that frugality (net burn) is a key trait that appears correlated w success - esp pre PMfit.

Frugality is also correlated w Ambitious Alans - perhaps because they can’t raise as much initially, & frugality is out of necessity than by choice.

21) We’ll need to do more digging on frugality - the data is early - but this makes intuitive sense to me.

As they say, you need to survive long enough for good things to happen.

22) Our dataset is early so I’m sure a lot will change.

But some of our early findings drive where we spend time, how we’ve set up our process, and what criteria we value.