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Josh Breinlinger

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27
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2017-04-05
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2017-04-05
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  1. “Yeah, so there's one that we haven't announced yet, but the one I can talk about is script dash. And we've talked about it a little bit already, but it hit all my metrics. But the cool thing is the way I found out about it is my wife's doctor was actually the first customer of Scriptash. And so I started as one of the first consumers of Scriptash. And I saw the pliers on at the doctor's office and I just started talking to the doctors about it. And I couldn't believe it because they were like, oh my God, you've got to try it. This thing is amazing. Like, it's so good. Delivers right away on time every night. And of course, we tried it and I called the founders the next day. And after a few months, we invested because it's just a phenomenal team. It's a huge market and the service is absolutely phenomenal. Our customer satisfaction is the highest I've ever seen.”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Yeah, that's exactly right. That's exactly right. It's this cool trend of, I think, of B2B sales in a consumer marketplace. And I think such a cool trend because we can take the best practices, everything we've learned from SaaS and inside sales and apply it to these cool consumer marketplaces.”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “Yeah, there's a lot of different tactics. What we did, I wrote a blog post called Liquidity Hacking that anybody can Google and you'll find there's a bunch of different things. I think one of the strongest ways is to find some sort of aggregator. So find an aggregator of demand or an aggregator of supply to kind of solve one side of the marketplace for you. Some people are doing it by”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “So lots of many to many connections where lots of buyers connecting with lots of different suppliers in basically in high frequency transactions. It gets back to that frequency. And the same thing that you touched on earlier, getting that big share of wallet. So you kind of need all those things.”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “So, while I'll give you my favorite author is David McAuliffe, and he writes a lot of history books. And one of the ones I read recently was The Wright Brothers. And it's such a cool story of basically two incredibly passionate bootstrapped entrepreneurs that build the first airplane. It's just an incredible story. And frankly, all of his books are phenomenal.”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “So I learned something really interesting when I first got into venture capital. At Jackson Square Ventures, the partners here, we've invested in four unicorn companies. And three of them, Ecologic, DocuSign, and Responses, they all had bridge rounds. Some even had down rounds in their history. And we all read the tech press and everything like that. And everybody thinks it's just up and to the right all the time. Every round is doubling. And that's just not the case. DocuSign was fascinating story because we had led around and then shortly after that some regulations changed and basically they lost 25% of their revenue overnight. It just evaporated. And so they couldn't raise. And we had the conviction. The team was still intact. The thesis was still intact. This was a temporary setback. So we led a bridge round. We are now the largest shareholders in DocuSign. And of course, it's gone on to be a phenomenal company. So, you know, sure, it's always a hard decision when you're thinking about bridging a company, but it's definitely not the case that, you know, you're just always throwing good money.”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “Yeah, this is a little bit of one of my pet peeves. Every founder wants to present their company to feel earlier than it maybe really is. And it used to be you just had a seed round and then a series A round and then a series B. Nowadays you might have a friends and family round and then a precede round and a seed and a seed extension and a postseed and then maybe you have a series A. And, you know, people get caught up in this and I don't think it makes any sense because the names don't mean anything. I'd much rather talk about how much have you raised previously, how much are you raising now and what valuations are we talking about? Because it's series A could be anything from a five million valuation to a hundred million valuation. So it's just the name doesn't mean anything.”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “Yeah, it's a big challenge for them. I've certainly heard that Lyft is gaining market share. And that is a big problem for them, that almost you walk around San Francisco and every car has two stickers on it, one Uber and one Lyft. And so it's really hard to get that complete lock-in. And I don't have any idea of how they do that, but they'd be much more defensible if they did, for sure.”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “Yeah, for share of wallet, I think it's also just kind of attention. And if somebody's using Craigslist to hire and they're using Indeed to hire and they're using your other marketplace to hire freelancers as well, you don't really have that great lock-in yet. And the best way to do that is just provide a much better service than everybody else that's unquestionably better on every dimension. And then you get that share of wallet and that mind share. If people can switch too easily back and forth, you just don't really have that defensibility yet. And you're not building that moat. I think you really need people to completely move all their behavior to your marketplace and that's when you can win.”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Well, for sure, the best way is to just keep adding value after the match. Consumers have a somewhat rational behavior of if they feel they're paying fees that exceed the value they're getting, they're going to try to disintermediate. And you might be able to stop them from maybe mass contact information or something, but those are basically bad ways to do it. You don't want users begrudgingly using your service. And that's actually an important test I look at for every investment is, hey, do users outgrow the service? And the same thing when you're in a marketplace, you have buyers and sellers. Do they both want to work on the marketplace or is one side kind of forcing the other? And that's not a good situation. You really want both sides preferring to work on the marketplace because it's so much better. So I think everybody really needs to think about what's the value you're adding for the buyer and for the seller. And sometimes people ignore one of the sides.”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Before I jump into that too much, a big part of what I mean by that not all GMB is equal is think of two different cases. One is, hey, somebody comes into your marketplace and spends $1,000 one time and then they're gone. Or somebody comes in, spends ten dollars a hundred times with a hundred different providers. That is much more valuable because you've got so much more data and network effects and connections happening within your network as opposed to just more of a single transaction. So that's a big part of what I mean by this not all GMV is equal. In terms of the value after the match, I think that's just incredibly important for marketplaces to think about. You know, if you're just a matching service, it can be very difficult to scale. You could run into disintermediation challenges of, hey, once I went to this marketplace and met you, Harry, we decide, hey, we don't really need this marketplace anymore because we got.”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Don't have a specific threshold. Offer up is a great example of the other way to address this. And offer up sells, it's peer-to-peer marketplace, it's the largest mobile marketplace in the US, and they've now raised $220 million or so. What they did is a more horizontal approach. So you can buy and sell everything. And you can do couches and cars and strollers and bikes. You name it. And so the frequency of any one”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “Yeah, I think transaction size and frequency are very important dimensions for thinking about marketplaces. And I think a lot of people build kind of the wrong marketplace. So everybody tried to do the uberification of everything once Uber was wildly successful. But Uber has a special characteristic, which is incredibly high frequency. You know, if I'm going on business travel, I might use Uber eight times in a single day. And then at the other end of the spectrum, you have super low frequency and very high transaction size, which might be things like real estate. How often do you buy a house? It's just not very often. And so those marketplaces work very, very differently where people run into mistakes is where they might try to do the Uber for locksmiths. To me, that's just a terrible market because you just don't use locksmiths very often. I think I've maybe used them twice in my life and it's $100 each time. So building an Uber there just makes no sense. There's not a good opportunity.”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “Yeah, I guess I'm more bottoms up, but there's so many markets that we look, we like really, really big markets. Think of Scriptash, the pharmacy industry in the US is $412 billion, I believe. So whether you do it top down or bottoms up, it's big enough. It just doesn't matter”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “Yeah. So I definitely don't think it applies to every vertical. I'm on the founding team at Rev, which does audio transcription. It's a commodity marketplace. I don't think there's an opportunity to build a master transcription marketplace because there's just not enough of a difference in quality between what we do as the commodity and what a master could do. Our quality is extremely good. So there's no opportunity to create that master marketplace. Something like the legal industry might be very different. Healthcare might be very different. Education might be very different. Graphic design and coding might be very different. You know, there's obviously everybody thinks of, hey, engineers are maybe a great one is worth 10x a bad one. And so anytime you have that big spectrum of quality, I think you might have a great opportunity for a master marketplace. The TAM is really just going to depend on the industry. And I don't have a strong feeling yet about where the TAMs are going to be bigger or smaller. It just depends on the vertical.”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “And one way Well, so here's one way to think about it. Some of the best engineers in Silicon Valley don't apply to jobs in the normal fashion that most of the world does. They are very actively recruited by a host of recruiters at tons of different companies. And so the workflow for commodity services might be somebody posts a job, a bunch of people apply. The workflow in a mastermarketplace might be completely different. It might be masters sign up very, very easily, but their time is leveraged very well. So they're just presented with massive offers to do this coding or design, or you have to do more of a masterclass thing, which is a one-to-many approach of you get Gordon to record a bunch of videos, and then you can sell that to millions of people. So it really leverages their time much better.”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “And they don't want to because the rates are too low. It's a contest model. And if companies can afford the high end services, they'll just go direct. And they'll still work on kind of a word-of-mouth basis. They'll ask around like, hey, does anybody know a great designer? That's not the most efficient. And so I think the previous generation of marketplaces, there was a lot of commodity. There will still continue to be that. But I think there's the separation happening now. And I actually don't believe the same company can own both, largely because the workflow is just completely different for commodity level and master level.”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “So I've been really fascinated by this trend and a few companies that I think are breaking new ground in this. So one is a company called Masterclass. And Masterclass has absolutely world-class experts providing online education. So I'm taking a cooking class from Gordon Ramsey. There's no other way in the world I would get access to that. Serena Williams is teaching a tennis class, and there's a bunch of others world-class experts. Another one is in healthcare, a company called Grand Rounds. And Grand Rounds gets the world's best doctors to effectively form a panel and deal with some of the hardest healthcare cases. And I think the contrast is, until recently, most marketplaces I think have focused mostly on somewhat commodity level services. And you could look at something like 99 designs. 99 designs does tons of logo designs, but the vast majority of high-end designers don't really participate in that platform.”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “Yeah, I mean, we want as much as we can get, but the average tends to be 15 to 20. We have a relatively small fund. It's $125 million. So we don't need 25% ownership to make the math work in our fund size. I think if we had a much bigger fund, we'd certainly have to take much bigger ownership stakes. But with us, 15 to 20% works very well, and we tend to lead rounds that are anything from, we'll write a $1 to $4 million check and average pre-money valuations tend to be maybe $10 to $12 million.”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “Sure. And I could write a 25K check in a late stage of Uber and put it on my portfolio page. So yeah, it just doesn't mean much, but people look at activity and use that to create the top 10 charts. And I think it sort of rewards a little bit of a spray and prey type approach, which I believe is wrong in venture capital. I believe the best way to get returns is to have very high conviction investments, very concentrated investments. And I think that's the way to beat the market and stand out. I think it's the same in the public markets. You see Vanguard is the index fund. That's the kind of spray and prey. And that's obviously done really well. But all the, you know, the money managers that can beat them are basically very, very concentrated.”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “This is a pet peeve of mine. There's a lot of data out there about the venture capital world, things like CB Insights and Mattermark. But the hard thing to understand about the venture world is most of the important data is private and confidential and opaque.”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “With a product and the service, and then the data has to back it up. I might have those two things, and then I'd look at the data and say, oh, actually, maybe I was wrong about something because the data kind of stinks. Actually, usage is falling off a cliff, so I must have been wrong about something. But if I get those first two things and then I can look at the data and see, hey, the data is validating my belief in this product and service, that's when I get really excited and jump in.”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “So, I mean, obviously, I look at a ton of data, but what I really look to first is, first of all, do I love the founding team? And obviously that's a must have. And then I just kind of think about the service. And one of my favorite mental tests is to just look at a service and say, hey, once I learn about this new startup, will I completely switch all of my behavior to this new thing? And there's a company I recently invested in called Scriptash, which is a pharmacy. And they do same-day delivery. What they do is they go to doctors and they say, hey, you should refer all your patients to Scriptash. And so the message doctors gives to patients is, hey, Harry, here's this prescription. Would you like it delivered to your house tonight? And not surprisingly, everyone says yes. So that's one of these things that is just such an obvious, oh my God, this is so much better on every single dimension that people will switch completely. And so I have to fall in love with the team first.”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “Focus on hey, is what they're doing today a scalable approach and will it keep working? Meerkat is actually one of my favorite examples, which was skyrocketing in terms of usage, but nothing was sustainable about it. And they got an investment and it crashed shortly after that. And it turns out they pivoted and it might work out just fine. But I do think if you're so focused on just those usage data things, you can sort of think too little and not see the common sense picture of how the market could evolve.”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “Yeah, so you know, it's interesting. First of all, one of my favorite quotes is from Charlie Munger. I'm a Warren Buffett disciple and have been to the annual meetings and we're going to have a party at my house for the webcast of the Berkshire Hathaway annual meeting. One of the things Charlie says, which is fantastic, is he says people calculate too much and think too little. And I think that's actually happens in venture capital. A lot of young VCs, we feel like we're in the money ball generation. We should be able to quantify everything, including founder skill and ability to create a billion dollar company or something. And what I think it does is if you are so focused on just the data of user acquisitions, MRR growth, whatever, especially at the early stages where it's probably only a million or so in revenue, I think you can just buy into hype too easily and make bad decisions that ignore common sense and ignore what could happen with the competition or don't really”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  26. “Moved on because it was getting to be late stage and I really enjoy earlier stage companies. And I had a couple years of transition where I was running product and marketing at AdRoll, which is a display advertising company. I joined the founding team of a company called Rev, which does audio transcription, translation, captions, and subtitles. But I was also recruited into Sigma Partners by Greg Gretsch, who was on the board of Odesk. And so I've actually been working with Greg now for almost 12 or 13 years. He recruited me into Venture. And shortly after I joined Sigma, we actually spun out and formed what is now Jackson Square Ventures”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  27. “So I started my career actually as a mechanical engineer in Boston. I went to MIT and I was from a nerdy engineering family where my dad was an electrical engineer at MIT and my older brother was at MIT, mechanical engineer. So I started doing the same thing and did consulting for about four years building fuel injectors and Sterling engines. And we even designed a new fry later for Burger King. It's really interesting projects. But in 2004, I moved out to San Francisco and I joined the founding team of ODESC, which has now moved on to become the world's largest freelance labor marketplace, merged with Elance, and rebranded to Upwork. While I was there, I was there for a little over five years, and I basically did a little bit of everything. I ran sales, I ran product, community, operations, marketing, and bus dev. And so I got a really a crash course in marketplaces and startups, and I loved it. I fell in love with the startup marketplace culture and balancing the two sides constantly. And then in 2010,”

    2017-04-05 · The Twenty Minute VC · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · IDENTIFIED FROM THE TRANSCRIPT · source