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Christoph Janz

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26
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2021-11-24
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2021-11-24
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  1. “Like Christoph, Sasha. I just want to make one thing very clear. If we end up selling storage room for a hundred million I will consider it a big failure. I was probably thinking, well, 100 million, I will probably quite heavy with 100 million. But for him, it was already clear that this is not what we should be aiming for and took me probably a bit longer to realize that this could become so much bigger.”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Maybe worth mentioning two people there. One is Chris Shagen, who joined the company as really the first commercial person. And I think he kind of in the early days built up marketing to a certain extent also sales. I think he played a very big role there and should get a lot of credit. And the other one that I would mention is my friend Roberto Bonanzinga, who at the time was with Balderton leading the investment. because he was investing out of a bigger fund with a bigger firm and maybe because he was more experienced, his ambition was already bigger than mine. I remember a really funny anecdote when we probably, I don't know, maybe a couple of months after our original investment, we did a kind of like a board off-site in Lisbon to discuss strategy and everything. Then he said in his really nice Italian accent, something.”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “To build it themselves using some open source components because they don't want to trust a startup with their most precious content and data. So yeah, I think those were two of probably out of even more reasons why this might have failed.”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “I think two factors there. I think one is that we could have been outrun by competitors. It's not like we weren't really aware of specific competitors really doing the same thing. But nevertheless, this one man show, which then with a recruitment of the Paolo, the tech co-founder became a two-man show, it still felt like against all odds in a way if you think that there is a Silicon Valley team going after the opportunity, raising more money, having more experience. I think like potential future competition that would be able to execute faster, I would say, was one reason why this might have failed. Fortunately, it did not. And I think the other was that the amount of proof that we had that market actually needs this was still pretty small. Like there was also the possibility that maybe a plug-in to WordPress is all that it takes, or that developers would rather want.”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “I think we didn't dream beyond an outcome of a couple of hundred millions in exit valuation. Our ambition started to get bigger over time, but like we had a tiny fund, like we, I guess the term Unicorn wasn't even coined yet. Like we were not really expecting billion dollar outcomes. I think we also built our fund model based on like billion to half a billion in terms of the best case outcome.”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “About cash being the constraint, which then means usually the actual constraint is just like manpower. How quickly can you hire great people and onboard them, which is something which you can accelerate a bit with money, but with some limitations. Ultimately depends a lot on the personality of the founders, right? If they're able to use the money to accelerate or if just too early for that, if they just keep a pretty low burn and all of this is then great, right? Like what's obviously the bad scenario is it leads to premature scaling and building up of a huge burn rate ultimately despite the fact that you've raised so much end up one and a half or two years later you haven't reached the milestones that you need to get to the next round and you have a high burn rate. So that's the scenario that is everybody should try to avoid.”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “Think having a lot of money can make a company better, but it can also make a company worse, right? And it depends on a couple of things. It doesn't make sense to hire lots of salespeople if you haven't figured out the sales motion yet, right? And this is like a classical mistake, which a lot of people have talked about. So I think that is also quite well understood. It doesn't mean that people won't make that mistake again if they have just so much money in the bank account. So I think one of the best things you can do as a founder in this environment is raise a lot of money at a very high valuation, but don't use it or at least don't spend it faster than you would if the money had been much harder to raise. And I mean, I think it's great if a company can operate in a way that cash is not the constraint, right? I think that should be the goal of every investment, should be that the founders can operate the company without having to worry about”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “From an investor, we want to preempt your round. Well, what does that mean, right? Does that mean one or two calls and maybe I share my metrics and then either I get a term sheet or not? Or does that mean four weeks of process? And I think in most cases, founders are better off if they run a process, so they control the timeline, they talk to several investors in parallel. So they have more options. That's the advice that we typically give to the point nine family founders.”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “I'm generally not a big fan of taking preemptive investments. There can be exceptions though. And maybe the real question is not so much, should I take a preemptive offer when it's on the table or not? When you really have a good offer on the table from a firm or partner that you really like and it's a good valuation, then it can make a lot of sense, right? I think the problem is that so many founders get dragged into these conversations at a time when they're not really ready for it yet. And then obviously investors are incentivized to convey that they are more interested or deeper in their decision-making process than they actually are. Because from the point of view, and you have an investor, like you want to have the possibility or optionality to even explore that. And that makes it hard to read the signals for a founder who is not very experienced with that. So I think the issue is that when a founder”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “There is basically a shift of one phase, content folds first round. We call the seed round was 500K. And we didn't even do it alone because we thought this was way too much for our tiny little fund. So we did less than half of it and helped Dasha fill up the round with others or help him get Bolison on board, which turned out to be a great partner for the company. And today, as you know, like 500K is less than the average pre-seed round, right? And seed rounds are often in the millions. So the label and the terminology really has shifted. Then also when you look at the series A stage, for a real series A, usually still needs some revenue. I guess back in the days, we used to say that you typically should have around a million in ARR for a series A. I guess to a certain extent that's still true, but at the same time, so many companies raise what you previously would have called”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Yeah, absolutely. It happens all the time, like having a chart without access description or presenting numbers not really being clear about the definition. I think not every time when you hear about ERR or MR, it actually is recurring. Maybe that is because SAS has become so big almost every company either is a SAS company or wants to become a SaaS company that to look into that. But also I would say that founders have become a lot more educated about this over the years. Like if you want to understand, there are so many great online resources. Like every imaginable question around SaaS, if you look it up, Jason Lenkin has answered it on Corind. I think the general sophistication of this entire industry and the participants has increased quite a bit. So I would say it's maybe people still make mistakes, but not the same, like very beginner level mistakes of”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Revenue has different margins, maybe one is recurring, the other is not recurring. So you will not get the same multiple on that, but it also doesn't hurt, right? It's cross margin. It pay the bills, and you can explain to investors why you're charging it.”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “So I would say in SMB SAS, it usually doesn't play a big role, but it's very different on the enterprise side where enterprise customers typically expect some percentage of professional services or set up costs or implementation fees. Founders who are not very experienced with enterprise sales might often not really want to ask for that because it maybe makes you uncomfortable or maybe you think it friction to the deal or maybe you don't want to have that revenue that is lower margin. But essentially you have to do the work anyway. You have to do whatever it takes to make this customer happy and successful. So if you're doing it, well, why not charge for it if they are almost begging you to pay for it? Obviously, it means that when you present this data to investors in your next round, you like need to show it clearly, have probably two different line items, and it's clear that those different types of”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “Use the product more often so they generate more API calls and that will lead to higher costs. But if that happens at a time where they've already seen the value, they're probably fine with it because they'll still have a great ROI on that additional spend.”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “Well, pricing is definitely one of my favorite topics because it has such a huge impact, right? Like it can really change a company if you get your pricing wrong or right because the right price doesn't only mean that you charge more. It opens up totally new ways to acquire customers if you have much higher customer lifetime values. There are a lot of trade-offs, right? Like, and you mentioned one of them already, like on the one hand, you want to align pricing with the value that you deliver. But by doing that, you also charge for the value that you deliver. Value usually comes from usage. So you could disincentivize usage. And I think on this particular question, I think it's mostly a question around like timing related to onboarding and how you do implementation and customer support and customer success. You have to make sure that you show the customer the value first. And then when they see the value and then they might want to add more seats or maybe”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “Is an angel investor, we're probably in spaces where I didn't know too much about it. So I didn't, like Zendesk, for example, everybody in Europe who knew anything about enterprise software looked at Zendesk and passed because there were plenty of reasons why this would never work. I had zero knowledge about enterprise software. I was a consumer internet guy. So I looked at it from the perspective of a consumer internet person. I looked at the product. It looked great. I like playing around with it. I thought I would use it. But this was not the way more sophisticated people thought.”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “It's a very, very good point, and I guess mostly a psychological one, right? Where we have to keep telling ourselves we should not draw conclusions from a very small number of data points, which might be completely wrong, right? Because we have pretty small number of data points, if you think about it. And then the feedback cycles are extremely long. It might take years or many years to find out if the original investment decision was right or wrong. And then even if a company, let's say, doesn't work out and you kind of realize that a couple of years later, you might not even know why it didn't work out, right? Like even with hindsight, sometimes it's hard to really attribute it to the market or the timing or the execution or a combination of this. So I think we just try to be humble and not assume that we know everything or too much. And some of the best investments that we've made at point nine or that I personally made.”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “Really, really hard to predict a market size. And storage room or contentful is maybe a good example so far as we made the bet, it was right, but it became even better. So that's the kind of learning that I'm happy to make. But obviously we also had different types of lessons where things didn't work out. So what we're really focused on is finding founders that have a really strong insight that I've identified a pain, that have developed a great solution to that for a specific audience. And then we want to see some optionality or like some opportunity that they might get into a bigger and bigger market, but we don't expect to be able to really have a number for it when we consider investing.”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “I don't think that mediocre founders can build a very large company to start off with that. I think there are just way too many opportunities to fail. It just takes so much resilience and energy and dedication to always get up again. I think to build a very, very large company, you probably have to be in that lucky or fortunate position as an investor to be in a company that combines a great team and the great market opportunity. I think if you have a great team in a really, really bad market, there is a good chance that they will still turn it into like some decent level of success or maybe they can pivot into a better market. So I think the team is the more important factor of the two, but we do look at both of these factors. It doesn't mean that we want or expect to have clarity on the market size by the time we invest. I think we've learned like many other investors that it's”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “Yeah, I guess we were probably quite naive in that and got lucky that we invested in the company and in some other companies of that generation like Algolia, for example, and that these companies have then been able to benefit so much from this incredible growth of software and the number of developers and developers having purchasing power. So I think I'm not sure if we really understood that well. We knew that there were a few companies already, early players somewhat successful in selling software to developers. I think there was Pars and Heroku, if I'm not mistaken. But also with the benefit of hindsight, not big successes. Heroku and Parse, if I'm not mistaken, exited between 80 million and 250 or so, which is the type of exit if when we have thought about that in 2012, strangely given us confidence about the size of the opportunity because we thought this is big. We thought it would be great.”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “Were all the things I would expect from a startup roller coaster, right? I would say also happened in the case of Contentful.”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “So I think we made a bet on the growth of mobile. I think that was already a safe bet to make 2012. So this was already like year five of the iPhone. So there was already considerable growth of mobile consumption. But I think it was unclear. So it was maybe a bigger leap of faith to assume that there will be a big market for developer tools, like everything that you need as a developer to create and market a mobile app or a web app that works on multiple devices. I think we were bullish enough based on this high level theme, but we couldn't really put our finger on this. And we definitely were surprised by how big Contentful has become. It was not an overnight success, though. It's not like this company has taken off right away. Like it took a couple of years of relatively slow growth and ups and downs and re-architecturing the product takes a year longer than expected.”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “So I was excited from the first interaction, and I think with every interaction or everything that we learned, we got more and more interested. But it in comparison to some of the investments that we've done in more recent times, it actually took a lot of time. One is that just the market has been so immature and so different. So I think even though it had these elements of love at first sight, I think it took still two or three months totally unbelievable today with the current pace in this environment where everything gets done in a week, right? But it took us, I think, two months to do our work and come to a decision and then probably another one or two months to actually do the investment. Things were just moving so slowly in Europe. We kind of were able to move so slowly. It's embarrassing, right? Because there wasn't so much competition. So we were excited from the first meeting, but we dug in quite deeply to try to understand the product, the market, talk to everyone.”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “I don't know maybe it's flattering, but also it made sense to me, right? Like there is a mutual fit. So that was interesting. Then he was able to articulate in really just a couple of words what the product does, why it's different, why it's needed. Then he mentioned some of the early customers that he was already able to attract. And those were some big logos. So also a bit of social proof, which is maybe superficial, but if you spend only a minute on reading those emails, then it's one of the things that stands out. Last but not least, I don't know if that was intentional or just intuitively, but it had a clear call to action. It was like, can we meet or can we have a call? And everything that I just described didn't make this email longer than two or three paragraphs. And there was a deck attached to it, which was well done. It caught my attention. I definitely wanted to learn more. So I replied to Sasha. We jumped on a Skype call. I continued to get more and more intrigued.”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “Yeah, happy to tell you about it. And it's interesting, Sasha didn't have a sales background, right? It's not like he has learned how to do that. He's engineer by training. He's a young techie founder. He's just incredibly smart. So he just figured it on his own. And I think this email, I don't know if it's right to say it, it ticked the boxes or it pushed the right buttons with me. It had a couple of interesting elements if you try to analyze it. Like one, Sasha made it really clear why he was reaching out to me. So it was clear that this was not a random email that was sent out to dozens of investors at the same time and where you kind of see right away, well, this is completely random. It's not that interesting. He referenced my blog that he liked some of the work that I've already been doing and that he hasn't found so many investors in Europe at that time who knew something about SAS. So he really made an explicit point about why he wanted to talk to me, which”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source

  26. “Yeah, sure. So I expected that you would ask this question, Harry. So I actually duck out that original email that I got from Sasha Koniecka, the co-founder and CEO of Contentful, which at the time was called Storage Room. And he sent me that email in March 2012. It was an old email with a subject SAS seed funding storage room. As you know, as we see you get a lot of cold emails and maybe you try to look at most of them, but you probably don't manage to really look into all of them. We try to look at as many of them as possible, but we don't always succeed. But this one was very special, and I think it had all the elements of a great cold email.”

    2021-11-24 · The Twenty Minute VC · 20VC: The Contentful Memo: Point Nine's Christoph Janz on The Cold Email That Led to a Unicorn Investment, How To Approach Market Sizing and Timing & The Pros and Cons of Pre-Emptive Rounds, When To Do Them vs When Not To? · IDENTIFIED FROM THE TRANSCRIPT · source