YouSaid · the spoken record

Alex Taussig

lines on the record: 36
first: 2018-03-12
most recent: 2018-03-12
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“My pleasure, thank you so much for having me. I always enjoy listening to you, and now it's great to have this conversation.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“My most recent investment is a company called Daily Harvest, based in New York. It's a subscription service that delivers superfoods to your freezer. They're fundamentally reinventing a huge category of consumer purchasing, which is frozen food for the millennial consumer and even expanding what people think about when they think about frozen, reinventing categories of food that can be delivered through frozen. The thing that we loved about it was that it's kind of unintuitive, but frozen has some inherent advantages over fresh food, namely the operations of manufacturing are more similar to consumer packaged goods than the complex cooking operations you might find inside of a blue apron or a freshly. Moreover, customers who don't consume a meal, they can just stick it back in the freezer and eat it weeks later. So a combination of these two factors means you have higher customer retention, higher margins, and generally a more scalable business. The result of that was that when we met the company, it was growing faster than almost any we'd seen and only a fraction of the capital. So we just knew we had to be involved and help the founder Rachel Drury Taker business.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“I agree with that actually, and I don't think it's because Amazon helps startups. They certainly don't really do much for startups, but they have weakened the traditional retailers. I think they've made it easier for startups to scale faster and take market share away from those legacy players, but still remember Amazon's not doing anyone any favors. I just think they're focused on very few startups in reality, despite the fact that people talk about that. Oh, is Amazon going to disrupt you? They're really not focused on startups. They're focused on Kroger and CBS. Those are the people they care about because the numbers are just so much bigger.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“That's the first time I've heard that. I guess they don't say it to my face. Maybe because I've told them not to spill the beans on my secret identity”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I'm not sure. I wrote this post a little while ago, there was sort of a response to something Paul Grant had said on Twitter, which was that effectively MBAs don't start companies. And it just patently not true. And I'm not sure an MBA really qualifies you for anything specific, but the counter-argument that an NBA disqualifies you from participating meaningfully.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, thanks for mentioning it. Brief plug it's drinking from the fire hose. It's on tinyletter.com slash atausig. But my newsletter, you know, I started about a year ago and I just, I was getting frustrated with the state of discussion on social media, I guess what I was saying. I wanted a place where I could speak in longer sentences and I could explore issues in greater depth and frankly have a chance to own my audience and talk directly to them and get feedback directly from them. So that was the main thing. But also, as you know, you're creating content multiple times a week. I think the more you do it, the better you get at it. And for me, a goal of mine has always been to become a better writer. They don't teach you to write super well when you study physics. So this is been my excuse to force myself to write better.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“But I always think back to a course I took in college where we studied the divine comedy for an entire semester. And it was a real luxury being able to read a single book in that level of depth. And it was hard to sum up why it made such an impression for me. I've always been drawn to epic stories. This is the template for nearly every journey of redemption that has come after it and feeds into so much of popular culture. But it's also this intellectual tapestry that has incredible breadth of meaning, everything from political to religious, historical, allegorical, even just gossip. It's an incredible thing you reread it every time you do. You learn something new. But in addition to that, it's not just the intellectual side. It's the stories that he tells, in particular in Inferno, really resonate in their beauty and pathos. People like Ugolino, Ulysses, Paolo and Francesca. They're just amazing stuff in there. So maybe if you're flying on one of those 16, 17 hour flights, you might be able to crack one of these things, but...”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“Meaningful scale is relative to the size of that vendor's business. So are you 1%, 10%, 50% of their scale? Because at some point you become more important to them than they are to you. And at that point, the negotiation flips. Early on, you're convincing these vendors to even work with you, even pick up the phone. At some point, you become such a sizable portion of their business that they have to really negotiate with you. So I think if a meaningful scale is being relative to the size of the vendor and then also you have to take into account how many of those vendors are identical in the ecosystem. If you have a product you need to source and there's only three people who can provide you that product, chances are you're not going to be able to get very good terms. If there's thousands of them and they're even regionally more, you might be able to do better.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a really insightful question. I generally think that the larger and more important you are to your vendors, the better payment terms you'll be able to extract. You also have to balance that, though, with the fact that your vendors need to stay in business too. They need to be able to survive and actually thrive in partnership with you. So you can't totally give them something that they can't deal with. But I will also say that just because your competitor gets great terms doesn't mean you can't as well. It's not mutually exclusive. It's just a question of what meaningful scale is and how competitive that vendor base is and how badly they want your business. And the more they want your business, the more flexible they'll be. Sometimes you see the opposite effect. If an incumbent is really dominant, the vendor actually may have a greater incentive to give you better terms because they want to eventually diversify their customer base. It's dangerous for them to just have effectively one customer because then they're beholden. So they may, you may come into a market and they may say, oh, great. Here's someone else that we can work with. And let's make sure that these guys, even though they're smaller, still get great terms. So it's a push and pull and it's very specific. I don't think it's as simple to say.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“Wedding day. So Zola receives that cash from customers, but at the same time, customers also don't want their gifts immediately because often they're moving after they get married. So Zola receives cash before it has to actually ship product. So it's a very interesting dynamic when you look at cash flow. It can actually influence how capital efficient a business can be. And as venture capitalists, we love funding businesses that are capital efficient.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“Up until that time, it had only consumed about $3 million of cash. And that's about half of what it would have burned without the negative working capital effect. Most of this, they raised one round of venture capital from Kleiner Perkins, and most of it was still on the balance sheet when they went public. So Bezos did an amazing job funding a good portion, and not all, but a good portion of those operations with vendor financing. Now, it is not magic, right? Like you need to actually spend that cash on other things often. So Amazon, and still to this day, will actually invest a lot in CapEx to build out distribution centers and invest in technology that are fixed costs that are long-term lived. So a lot of that operating cash flow just flows into its capital expenditures. But still, it's an important concept to understand because there's so many startups for whom this is an advantage. With Zola, for example, since we already talked about it, the cycle of getting gifts for someone at their wedding is really interesting because people typically register many months before they get married and couples receive gifts many months before the”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, so I'll tell you what it is first of all, and then I'll tell you what the benefits are. So instead of thinking of dollars in these balances of these accounts, it's often easier to think of the number of days of cash they're tied up in each of these functions. So that's days of accounts receivable, days of inventory, days of payables. And if you take the days of receivables plus the days of inventory and subtract the days of payables, that number is called the cash conversion cycle. And if that's a negative number, we call that negative working capital. And it is a good thing because what it means is that you're effectively your vendors are floating you cash so that you can buy inventory and fund the operations of the business. So in Amazon's case, if you go back and look at their perspectives from their IPO and then the few public company filings for the following years, their day's payable was about three to four times their day's inventory from 1995 to 1998, about two times in 1999. In 1999, they did over a billion in revenues. The effect of this was that when Amazon went public in 1997,”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“Typical accounting profits and losses and how much cash your business generates or burns in a given period of time. We all know cash is king, and you may have heard that phrase. But it's actually the timing of cash flows that really matters. It's when that cash hits your balance sheet because that's when you can use it. Startups need to pay attention to this even more than larger companies because they have so much less cash. There's three numbers that affect the timing of cash flow. It's actually more than three, really, but there's really three main ones. The first is accounts receivable. That's the balance of payments that your customers owe you. There's accounts payable, which is the balance of payments you owe your vendors. And then there's inventory, which is the value of the product you have waiting to be sold to your customers. And changes in each of these balances.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure. Yeah, I don't think business model gets enough attention. And it's really like the way you define business model is basically how does the company create cash flow? And that cash flow is the thing that ultimately the business survives on once the venture capitalists stop writing checks. So ultimately you need to turn your business into something that venture capitalists subsidize to something that produces cash. And if you can't do that, it's really hard to sustain yourself. The Amazon story is obviously very complex, but what most people don't realize is they benefited a lot from the fact that book distributors from whom it purchased its inventory in the early days had so little power in the market. In the publishing industry, there's like a handful of these book publishers and they have a lot of power. But then they employ these local distributors to reach customers. And those distributors were relative to Amazon, actually pretty small. And so Amazon had enough centralized power to extract favorable vendor terms from these distributors. To understand why this was beneficial to Amazon, I kind of need to explain something called networking capital. In many businesses, especially those that hold inventory, there's a difference between”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“Like most things, it's maybe necessary but not sufficient. And sometimes it doesn't matter because if it turns out the first mover has the wrong model, if you looked at MySpace and Friends theorem and compared to Facebook, you would have said that Facebook would have lost because it didn't have first mover advantage. But the Facebook product was fundamentally different and also had a different distribution mechanism, which was colleges. So I don't necessarily believe that's always the case. But if you're referring to the same data set, if you're going after the same data set on users, oftentimes the first one to market is able to win.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“Increasingly, the incumbents are more powerful than they've ever been. I think that's something that is a big theme in technology in this latter part of the 2010s. But they can't do everything and they can't focus on everything. My partner, Jeremy, is often fond of saying that if you're not in one of the three top priorities of the competitor, then you're probably okay for a little while. The key is what advantage can you build while you're still under the radar such that when the incumbents do wake up and want to crush you, you actually have an advantage that they don't have. One of the things I like to think about is just longitudinal data on your customers. If Facebook wants to enter a market, but it requires them to, or Amazon wants to enter a market and it requires them to understand how the customers perform over time. They can spend all the money they want to acquire customers, but it can't create more time. There's something to be said for watching a certain set of cohort of users and increasingly acquiring more data over them over time that's hard to replicate. I think Stitch, I think Stitchfix has done a good job at this, for example, because they have a long”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say that if you're lucky enough to find a channel where you have proprietary advantage that you can outperform your competition, I would pour as much gas on it as you can. But I'd always still have an experimental marketing budget that you're using to figure out what the next one's going to be. It's a little bit like managing a portfolio of investments. We often say when we talk about marketing, you have your things you're waiting heavily that are already working, and then you have your newer things you're experimenting with, things that have higher data. But if they hit, then you're going to make them one of your dominant things. So yes, you need to really lean into what's working because you only have a certain amount of resources, but you always also need to be testing. So it's somewhere in the middle. It's maybe something like an 80-20 split early on.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“Scaling very quickly, you need to start thinking about what your second, third, and fourth channels are going to be. And for that, you often need the money. So the answer ultimately is yes, but not for the reasons you would think.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, it's interesting. It depends on the channel. With the Zola example, that's not a channel that costs a lot of money to get right, but it requires a lot of insight and a lot of design of the product. Similarly, if you look at a company like Glossier, which is a cosmetics company in New York, they get a lot of users through their Instagram community. It doesn't cost them a lot of money, but they have to be very thoughtful about how they build the products, be photographed. On the other hand, you might look at a company like Masterclass, which creates these celebrity-led educational lessons. They're somewhere between entertainment and education. And for them, you know, they do some paid acquisition on Facebook, but that paid acquisition is assisted by the fact that these celebrities already have followings on Facebook. So they have resonance in that channel. So in that case, raising more money to do more paid acquisition, there's probably a lot of benefits to that. But what I will tell you is that even if you find that product channel fit, it's not going to last forever. And it's often the first thing you get right. And then you have to get a lot of other things right. So it's almost always the case that when you hit product channel fit and you're”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“Data, and that data created more users, and it created a virtuous cycle. And so earned media for Zola was really a channel in which they had an unfair advantage by nature of their product. And they leaned into that, and that created a lot of organic growth in the early days. And so that for me is a good example of product channel fit.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it's a little tough to use it in that scenario. When I talk about product channel fit, what I'm really talking about is designing your product to resonate within a specific channel to market. It's easiest to understand by example. I think I wrote this piece about our portfolio company, Zola, which is the fastest growing company in the wedding category in the US. And what they realized was they start to think about what's a user's mindspace when they get engaged? Well, they're about to go spend $30,000 on average in the US. It's much higher if you live in a coastal city. So that's a big amount of money. And it's a highly emotional purchase. And they wanted to be reflective of them. So they end up doing a lot of research about what other people have done in their weddings. And what that leads them to is a lot of Googling and a lot of searching for data on weddings. And what Grisolda realized was it had a lot of data because it was operating this registry product. So by publishing data about what its customers wanted, it created these articles that naturally fed their way into people's search. And then that created more.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“Screen virality. This is a quiz show, and what drives growth is people taking it out at work around the time the show goes live and everyone else taking out their phones because you need everyone else's knowledge around the table to help you get the question right. So it's a game that”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think what you might be referring to is that today's environment, I think versus 10 years ago, it feels like the biggest companies are so much more dominant than they used to be. And achieving that breakout growth is not as easy as it used to be. Something like 89 or 90% of growth in advertising dollars in the last year or so was inside of Google and Facebook. So those channels are more dominant than they've ever been. And then if you look at the App Store, the average consumer downloads net zero apps each month. So if the apps on people's phones don't really change that much. And then the app stores are just dominated by Facebook, Google, Amazon, and Apple. So how do you get on there? That's the kind of, I think, the question you're asking. And I think the answer is, look, the barge is higher. I think the bar is higher to perform and have a product that really resonates with consumers and nothing beats a product that users want to show off to their friends. I like to think of an example as one of our portfolio companies, HQ, which I know is at least blowing up in the US. I don't know if it's gone over the pond yet, but we call it screen discussion.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, what I mean by that is that if retail really served one function in the past, which was get inventory close to customers so they can go buy it and maybe some element of service. Now it has a multitude of use cases. As I said, it's about acquiring customers in local areas, but then sending them to your online site. Or it's about providing a service that you can't provide online as easily to those customers that is somehow related to your product. Or it's about overserving your best customers. So there's a startup in New York, for example, that we spoke to a little while ago that has a retail experience that's only for its best customers and it provides a personal, a more personalized experience for its best customers. So it's an invite only. So there's all these different ways people are using the physical experience and it's not purely just holding inventory and people walking and walk out with it.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“You kind of pioneered this concept with the guide shop, Glossier in New York has another innovative model with their retail format. So we're starting to see a change in how online brands view retail. They have the benefit of being able to look at retail with a blank sheet of paper and design what they want to get out of it. For some types of companies, it just means selling more stuff in store. For others, it's a way to re-engage their customer base and increase their current customers' lifetime value. For others, it's about new customer acquisition. So there's a variety of different ways these folks are using retail.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, yeah, as dominant as Amazon is. I mean, that's just a statement of how big commerce is. It's just a huge market. And so it's not uncommon for companies to get to a couple hundred million in revenue and see their customer acquisition costs online go up. Now, some businesses can withstand that more than others because some have better lifetime values than others. But we typically start to see once you breach 100 million, 200 million in revenue, you need to start going and figure out some offline strategy. So what we see actually in the future looking forward is emerging of the best at breed online and offline to create a seamless cross-channel experience. Worthy Parker's done an exceptional job of this, I think. We have a store here in Hayes Valley in San Francisco where you can go in, you can try on all the different classes, but you don't actually walk out with a pair of classes. You can actually see an optometrist or you can get classes adjusted, but then you walk out and you go order online. So they fulfill through the online channel the store is more of a showroom. Bonobos also, which is a portfolio company of ours that recently sold to Walmart.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, again, there's a lot of different reasons why a digitally native brand or digitally native retailer would open up stores. One of the big reasons is you have to remember e-commerce is still only about 10% of total retail in the United States. So it's still tiny.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“Kind of think, well, what do these things have in common? There's a few different factors one is they have a supply chain that doesn't yet work for online very well, think grocery, for example. They have an advantage in being physically close to the customer. So think convenience store. It's really hard to buy a single Snickers bar online. You still need to go somewhere because the shipping cost would be astronomical, right? So that's why convenience stores work. Deep value. So customers were retrained during the recession, especially millennials, to look for deals. And TJ Maxx, raw stores, Dollar General, these types of things have done quite well. And then lastly, anything where the experience is an important factor of shopping. So the mall sector, there's a lot of malls that are closing, but there's actually a few high-end malls that are doing quite well. And that's because they focus on the shopping experience. So like most things in life, it's not black and white. It's somewhere in the middle. It's gray and it depends on what part of the retail ecosystem you're a part of.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“Single trip, and so that was the value of having them all in one place. But the internet serves that use case much, much better with much lower transaction costs. So that's caused a decline in put traffic in these stores, which then causes these guys to discount to get people to come back, which trains the shoppers to expect that discount. And then that means the highest quality brands want to pull out because they're sitting next to discounted stuff, which is not good for their brand. So they pull out. That means the average quality of all the inventory goes down. And that means that you need discount even more to get people to come in. So it's this vicious cycle of discounting and poor redundant inventory. And they just can't get out of this cycle. And it's fundamentally because there's really not a good reason to have all those things in one place. But taking that aside, they're actually more store openings than closings across the retail sector in 2017. The offset losses in categories like department store and full price fashion, there were massive gains in categories like fast food, convenience, supermarkets, drugstores, off-price retail.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, yeah, the media kind of likes the gloss over what's happening in retail right now. I think in the retail sector, a lot of very visible changes are happening, and it's causing a lot of people, a lot of angst. It's interesting to me to contrast today in the United States and retail with 10 years ago during the recession. Because during the recession, you also had a lot of bankruptcies, a lot of store closures, but the economy was going through a really horrible correction. Now, we're having a lot of bankruptcies. I think there were about 19 or so in 2017, but GDP is on an eight-year growth. We're on the stock markets in its longest bull market. unemployment's low by most measures, consumer confidence is very high. So when you really double click and you look at what's going on, it's not that retail is dying. It's that there's a few formats of retail that are no longer working, but those formats are highly visible. And I think the best example of that is department stores. I mean, department stores are in a particularly bad place. You know, once upon a time, there was a theory that you would go into these very large stores that have a lot of variety of inventory and you would shop multiple categories.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, the realism piece comes into play when you just realize that stuff's gonna go wrong. And you just have to get into these companies knowing that. And you can't be surprised when things don't go the way you think they're going to go. You can set up plans. You can set up contingencies. But at the end of the day, once you make that investment, you're in the trenches with the entrepreneur and it's your job to figure it out. And that's what I, when I think of realism,”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“Valley firm founded in Silicon Valley, but we invest globally, but everywhere we invest, we bring that Silicon Valley mentality and technological optimism. And what I mean by that is we're definitely willing to take risk, perhaps losing the vast majority of our capital. But we do that if we believe there's a small chance of unbounded upside. So I sort of characterize it as you're always asking the question, well, what could go right instead of asking what could go wrong? And I think that the Silicon Valley culture is the really distinctive factor that I think of in the difference.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the cultural elements are always descended from the founders of the firms. It's similar to startups. You can walk into a startup and you can almost feel the personality of the founders often with a lot of the employees. I think scaling that culture is one of the biggest challenges a company faces. And similarly, it's a challenge that venture capital firms face. But I think in both firms, we do have that deductive analytical bent that's instilled in both cultures. I think the other thing is that both firms, both at Highland and Lightspeed, there's no superstar culture. neither firms where we really like to go in front and be the star of the show. We prefer to think of venture capital as a service business and that it's our job to remain behind the curtain out of the spotlight and healthy entrepreneurs succeed. And I think those things were in common. I think the biggest difference is probably the geographic focus. Highland started in the late 80s in Boston and still today has a very strong focus on the Boston and now New York City ecosystems. Light speed is really a silicon.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“I think one of those learnings is just how you approach analyzing companies. There's a lot of different lenses you can take. And he and I had similar paths in our careers. He has started off as an engineer and had come into venture in his 20s and had basically been in the industry his entire career, where he did not think about 30 years. And so his approach is deductive. And he really tries to pick apart the market forces and the changes in the market and trying to understand the particular moment in time a company starting and why a particular company has an advantage in a market. And then there's just this, the ethos of a work ethic that I think is independent of how successful someone is, that someone who could have been doing this for as long as he has and as well as he has, still be interested in learning new things and really working hard for entrepreneurs. It's not the specific things I learned, but it was more just watching someone go through the process of intellectually analyzing companies and then once we've made the investment, you know, the tireless work ethic. I think the common”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“Think back to my old boss's mentorship and guidance because I think it played a pivotal role for me in learning how to be a venture capitalist. I still very much believe that VC is an apprenticeship business. So I joined Lightspeed about two years ago, and I generally focus on the future of commerce and media. I'm very interested in how retail is getting disintermediated by the internet, as well as how the behaviors encoded in television will evolve the advent of TV on social platforms and through the App Store. But the most exciting part of this job is often when you see something you don't expect. So you always have to keep your eye open. And so I try to be a quick study of new markets and new opportunities.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure, happy to do that. So, I think I first heard the term venture capital at a bar at MIT, where I was doing my PhD at the time. I think people were drinking some university subsidized beer and a friend had described to me the process of raising venture capital for a company he was starting, which he was spinning out of a lab. And I just immediately fell in love with the concept. I was just fascinated by these people that helped match capital with groundbreaking ideas and people. But to be totally honest, at that time I was still a student. I didn't really know much about venture capital. I just had this hunch that it was something I'd enjoy doing. So my education and venture capital really started when I joined a firm in Boston called Highland Capital Partners in 2009. I was hired by one of the firm's founders, as is apprentice, effectively. My job was to help with about a dozen portfolio companies and also source new ones. And so I was there for about seven years. Fast forward to the end of that time. I'd moved to the West Coast from the original office in Boston. I become a partner at the firm and I was leading investments out here in Silicon Valley.”
2018-03-12 · The Twenty Minute VC · 20VC: Lightspeed's Alex Taussig on VC Risk Mentality, The Current State of Retail & The Mechanics of Cash Flow · IDENTIFIED FROM THE TRANSCRIPT · source