YouSaid · the spoken record

Josh Kopelman

lines on the record: 54
first: 2020-04-28
most recent: 2020-04-28
sittings or episodes: 1
sources: podcast

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“When I was starting half.com, my wife was a successful attorney. And I think she really chose to sacrifice her career to support my dreams. And that was a level of unselfishness and kindness that I don't know if I would have been able to have made the same decision that she made.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“The first 18 months are just a magical period. The founder is figuring out their go-to-market. They're positioning. They're hiring their core team. They're baking their culture. They're figuring out pricing and product all so much of the company gets baked in the first 18 months. And so sort of selfishly, I kind of designed a firm that just enables me to focus and my partners to focus on that stage”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“Just get real energy by hearing people talk and share what they want to build and what they think the world needs. And so for me, that's the most fun part of my job. The hard part is obviously saying no to 99% of them and doing it in a way that doesn't get you very jaded. This is an industry where you could very quickly get jaded and forcing yourself to maintain that open perspective is hard. YouTube was tried so many times before YouTube launched. You had real player. Like there were just so many people that had pitched that. And Dropbox, there were things called like carbonite and there were like tons of backup in the cloud type plays. And so the hardest part of the job MS one of the most fun parts is not totally pattern matching to the point where you're closed that you've seen something 10 times before. It doesn't mean that the 11th time isn't going to be the different one.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“So I think I have the best job in the world. I wake up and my job is to hear people's dreams. They come in and they're at the earliest of stages and it's really just the difference between sort of what is a game changing company and what's a novelty or toy. It's so hard to differentiate.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“Have there been people that have said this is what the product is going to be and gotten it right? Of course there are, but oftentimes what you're trying to do is get something in front of people. And I think when I look at Nat and Zach, the founders of Flatiron Health and what they did there, as well as invite media, they were exceptional at this. They would sort of put together almost like screen box of a product, just get it in front of people. It didn't work. They would just try to understand. They would take their insight, put it into screen marks, go out, have meetings, come back and edit. They only built after they had 50 conversations where they were able to, quote, show product and they had real confidence in what they were building.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“And then they would just type in the price and it would get in a form and it would just get automatically sent to that dealer. But there was no software in the beginning that actually connected to all those dealers. And only after they realized this is the cadence, this is the workflow, this is how it works. These are how many dealers we need to connect to. And this is the price that we need to be able to offer. Only then did they actually instantiate all of that ended up connecting to the inventory and the dealer software system so they could programmatically do that. That's like a perfect example of sort of starting off with your goal is to learn very quickly, but it actually is expensive to instantiate process, to instantiate something into a product. So oftentimes the best products are ones that start off super lightweight and then grow when they found that hook, when they know that they've kind of struck a chord.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“Very quickly, even if it's not scalable, even if it's sort of vaporware, just collect that data. And I think sort of when I see companies that are making some of the biggest mistake is when they code something so perfectly in software with the expectation that they're right. I remember there was an ideal lab company called CarsDirect.com, which would help you buy cars directly from dealers. And when they first started, Bill Gross had the great idea of saying, all right, let's just put up a form. What type of car do you want to buy? I want to buy Honda CRV. I want to buy X or Y. And rather than build all the software to connect all the car dealers inventories and understand where things were, when you said I want to buy a Honda CRV, all that happened was an email went to an operator or an associate's inbox and they said, all right, Patrick wants to buy him whatever year, whatever color Honda CRV. And all that person then did would call three local auto dealers to ask him if they had in stock and negotiate the best price.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“So I think if the goal is if you're trying to learn something, you're still trying to learn something through your software. You're trying to say, is this feature going to be valuable or not? All too often, God'll tell you about a product that we built that didn't really get traction. We said, oh, you know what, when everyone goes down and raises their follow-on rounds, they always create this new Google Doc of all the venture funds they're talking to and they kind of build their own CRM at the same time for fundraising. So why don't we build that for them? Because we know how a good fundraise should happen. We will build it exactly as it should happen. So we'll build this fundraising tool to help them track which funds to talk to, where are they, manage their fundraising. And it really never got that traction. What we learned is we would have been much better off hacking something together, putting it out there instead of spending six months building the feature perfectly, get something out there to get in front of the customer.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“So if I'm going to deliver any knowledge to a company today, what am I doing? I'm typically sharing what I've learned from what I've seen at other founders and other companies do. And if I'm sharing what I've seen other founders do, well, then why not just take me out of the loop and have the other founders share that? If you're a mobile marketing manager and you want to figure out how do I get featured as the Apple App Store of the day, maybe you could ask me, but wouldn't it be cool to ask the mobile marketing manager of Uber Hotel Tonight, Square and other companies that have already done it because they probably could help you far more than I can.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“So we've invested pretty heavily in software engineers to build an online network that not only connects the executive teams, but tries to connect every employee at all of our companies. So we have thousands of people at all first-round companies connecting online. And we also extend that offline because we think that a lot of trust and respect comes from actually getting to know people in multiple formats. So for us, that was a big advantage because I got to tell you, I used to a company would launch and they would say, hey, could you recommend, they would always just call me as a partner and say, could you recommend a good PR for could you recommend, what do you think on incentive comp for sales reps? And sure, I might have a point of view, but the ability to find that out from people who are practicing now, look, when I ran a top 10 e-commerce site, heft.com, there was no mobile, there was no social, and there was no paid search. So if you're an e-commerce company today asking me about customer acquisition, the half-life of my knowledge as an operator is very short.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“Effect. So we kind of stumbled into this, which is back in 2006, 2007, we created a Yahoo group for our founders, just a simple mailing list. And we quickly saw that they were able to help each other far more than we could when Aaron Patzer, who founded Mint, won the TechCrunch Disrupt conference and he won the prize, and his servers crashed because he had a MySQL.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“What's interesting is if you look at the type of company most VCs like to back or say they like to back, they will tell you they like to back software-based non-human services scalable network effect-based companies. Yet if you look at the firms that most venture capitals build, it is not software-based. It's human capital-based, and it's anti-network effect. And what I mean by anti-network effect is if value delivery occurs in a human capital way, so I'm a partner and I tend to board meeting and I'm going to deliver value to these companies, if I'm point on five companies, I could spend one day a week helping my companies. But as you add new nodes to the network, if I'm now point on 10 companies, I can spend one day every other week. So with each new node you add to the network, each new company you add to your portfolio, you're reducing the value prop for every other player. It's the definition of anti-network.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“Universities. So we're actually finding far more underrepresented female folks getting into venture because dorm room gives them the experience to actually write checks and perform that craft before they're being hired to do it. So for us, that was a really interesting learning.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“Have gone on to raise a lot of venture capital. So when you look at the leverage of the $20,000 translating into hundreds of millions of dollars that have followed, that's pretty cool. And I think for us, there have been two interesting learnings. The first is we were originally focusing on the student entrepreneurs as the most engaged community. What we found candidly is that this community of investors is also really interesting. So every year you have multiple quote dorm room partners that are graduating from college. And now over 25% of them have taken a job in venture capital after they graduated. So I think dorm room fund is now the largest pipeline into venture, much larger than like Kaufman Fellows in terms of sort of the number of people that were graduating. What's also really cool is that the dorm room fund partnerships, the goal for us is that the demographics of the partnerships represent the demographics of”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“VCs aren't in the business of writing $50,000 checks or $20,000 checks. And B, they typically don't do it to people who aren't pursuing their idea full-time. And so we said, wouldn't it be neat if we created a fund that would fund these student entrepreneurs? But obviously we're not best equipped to evaluate them. So who could? And then we said, well, if these students are smart enough to create these EPIC companies, whether in school, why aren't students smart enough to invest in these epic companies when they're in school? So we now have dorm room fund in four cities in Philadelphia, San Francisco, Boston, and New York. And in each of those cities, we have anywhere from 10 to 12 students, whether it's Harvard, MIT, Northeastern up in Boston, or Columbia and YU and New York. And those students are the partners. And they're writing 20,000 dollar checks into student founded companies. And over the last eight years, they funded over 200 companies. And a number of those companies...”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“So I co founded my first company when I was a sophomore in college. And then three years after I graduated, that company went public. That was a marginal success. But so many epic companies were started by kids in college. Whether you're talking about Facebook or you're talking about Google or you're talking about FedEx, Microsoft, just you're looking at just billions or even trillions of dollars worth of market cap have been created if you go all the way back while they were in school. Yet if you look at the sources of funding for students, some students have such conviction in their ideas that they're going to drop out and then they'll go raise money from a venture capital. But a lot of folks aren't going to drop out. And there really is no good source of capital. If you're a sophomore in your dorm room working on an idea and you need $50,000 to get started, there is no good source of capital.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“And notion is just a perfect proof point of that. There's really no marketing budget, there's really no sales budget. You just get on board. You use their free product and very quickly you're paying them for it. And when a company can sort of unlock that type of magic, that's really, really compelling.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“So I think the answer is yes. There are two things I'd say. The first is during a downturn, VCs, even when they're investing, oftentimes there's always this balance of trust me or show me. Okay, so when a founder's telling me,”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“Hurt the most that weren't able to re emerge. Now, I think the opposite is also true. I think there are plenty of funds that kind of just left the market in 2008 and 2009 and stopped investing. And if you're an early stage investor, like some of the companies in 2009 and 2010 were some epic companies. And so I think that at least the lesson that I've drawn from the past booms and busts has been to really try to stay true to an operating cadence or an operating strategy that works for you, a fund size check size, fundraising cadence. So it's one of the reasons why first round, for example, today, our fund is still, we're investing out of fund seven. It's about a $200 million fund. Our first institutional fund was $135 million. So we haven't, in the course of 15 years, we haven't even grown, we haven't 2xed. And obviously you've seen most venture funds during the last 15 years grow.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“Hunkering down at home when you're sitting down trying to make sure that your coworkers, your friends, your family are all safe. It just brings up a very defensive mindset. And I think you're going to see that from venture investors as well. I think that when it comes to returns, I think you're going to see at least what I saw during the dot-com boom and then bust was that the funds that struggled the most were the funds that changed their strategy aggressively during the boom times. So you had many funds that raised $400 million venture funds every three years, $400 million every three years. And in 1998, 1999, they shrunk from a three-year fundraise to 18 months down to nine months and went from $400 million to $1.2 billion. And those who changed their strategy or operating cadence at the peak, or as we approach the peak, I think those are the funds that were”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“So I think the real answer is it's hard to know. Right now you've really seen very little impact in private investing because public companies trade daily and private companies trade by appointment. And when you trade by appointment, you typically trade as a founder, you typically sell your shares at the point of maximum leverage, at the point of maximum validation. You have your curves going in the right direction. Now, what changes that oftentimes is if you're forced to go out and fundraise because you need the capital. So there are going to be some companies that are going to be going out in the next quarter or two that thought they were going to be going out in one environment and are now going to be going out in a different. And that'll be the first time we get some sense as to what's going to be happening with valuations. As I said earlier, I think VCs, even though they say they're still writing checks, it's very hard to sort of have a growth mindset or an optimistic mindset when you're sitting.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, we've tried, there have been times where we've done we've tried to come up with themes or areas or topics that we wanted to focus on. But for the most part, I would say what we've learned is by the time something becomes obvious enough for us as a seed stage firm to say this is an area that we want to deploy a lot of capital into, it's too obvious. Most of the time, the best companies we funded have been ones where the founder has come to us with something that we had not thought of before. And what's cool is that we also have found that very few people had thought of that before. So for us, we tend to avoid being thematic investors and just sort of try to be open to rapidly learning.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“What I've seen is that the best investors are the ones oftentimes who ask the best questions of founders rather than give the right answers to founders because your job as an investor is to help bring out the best in the founder, not to replace that founder's judgment with your own. So I think that's a lot of what we look for is an understanding of difficulty and challenge that comes with starting companies. And so I've really been fortunate to work with some partners that I think that shared that mindset and that philosophy.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think one of the things that we look for, the first thing we look for is empathy. It is really hard to sit in that founder's chair. You're having to make dozens of decisions daily with imperfect information. And so unless you could empathize with the job that a founder has to do and understand that the founder is collecting thousands of data points to make these decisions and that you as an investor after you've invested, you see such a fraction of what they see. So job number one that we look for is empathy because we think it's really hard to be a founder and it's important to realize that as a VC, there's that whole story when the chicken and pig get together to make breakfast. The chicken is involved in making the eggs, but the pig is fully committed to making the bacon. And I think we recognize the best VCs are chickens. The founder is far more involved than the VC. So I think it's important.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“No, to be fair, my partner Rob was the one that led Restmith and Uber, but Travis was an incredibly, I'd started three companies, but there's no way I could have done what he did, both in terms of his aggressiveness and his conviction. He did something that very few founders could have done.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“Rules were great. In many states, there were two conflicting laws, or you could interpret one differently. And what I saw was that PayPal embraced the gray and said if we're successful, the laws that are ambiguous will get cleaned up. And the larger companies couldn't afford to take the regulatory risk of not being in compliance. There's no way Wells Fargo was going to risk their bank charter on this small feature on top of eBay. And I think that's a large part of the reason why PayPal ended up winning. And you see that all the time. You see that Uber is a prime example of some cases where they were clearly in the gray. Maybe some cases they went a little too black. But I actually think that there are plenty of examples where to some cases the large platform size and scale creates a risk adversity, a risk arbitrage that”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“Was that in the product planning meetings at eBay, you had almost as many lawyers as you had product managers because at that time, if you go back and look at PayPal's S1, I think you'll see that they were under investigation by over 20 different states attorney generals. They were in violation of the MasterCard and these merchant processing agreement, federal issues investigating use of PayPal for pornography and for drugs and for gambling. And so now if you were eBay in Wells Fargo and you had tens of billions of dollars in market cap at the time and you had a choice and you had to say, all right, the laws really weren't written to deal with this digital payment movement of money. So we have three choices. We could say, here's the law that is lily white. That's 100% clean. Here's the law that's cure black letter. The law says you can't do that. But the vast majority of...”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“To do with risk asymmetry. So after I sold heft.com to eBay, I was involved with some of the early discussions because eBay was trying to compete with PayPal at the time. And PayPal was a small startup venture-backed that was dominant on eBay's auction listing. So when you bought something on eBay, you were closing that transaction or consummating the payment via PayPal. eBay said we got to launch a competitor and so they said we're going to build this thing called bill point and eBay formed a joint venture with Wells Fargo so here you had the number one auction platform and the number one bank building this platform to compete with PayPal why shouldn't Billpoint close the payments for all their auctions yet what happened was obviously PayPal won and everyone might say it was well the PayPal had a much better product which they did and they said well eBay just doesn't know how to build products actually wasn't the case what was interesting at least what I saw”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, 100% yes. And even because when those minnows begin to grow, I think what all of these large platforms have seen is the cost of missing a platform shift. AOL missed the platform shift from dial-up to cable modem and died. Yahoo missed the platform shift for search and mobile and died. became footnotes and what's happened is all of the large incumbents have learned this lesson. So when you do see something that looks like it might even be getting escape velocity, whether it be Oculus or whether it be Instagram, they're grabbing them up. Not only are you seeing that these companies are far more competitive and far more willing to clone features that they see in other smaller companies, but they're also far more inquisitive, which is limiting the upside of some of these smaller minnow companies, as you referred to them. Now, I would say that there are areas where you still could innovate around them. And oftentimes a lot of that has”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“Out. And so for me, if a founder gets stubbed by asking what don't you know rather than what do you know, that's a warning sign.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think oftentimes when a founder is pitching a VC, he or she believes that their job is to have all the answers. So you ask a question and they just tell you the answer. You say, what's your sales cycle? They'll tell you 65 days or what's your CAC and they'll tell you 800. I think instead one of the things that we really look for are founders who are able to articulate what they don't know because the difference between a startup and a company is pretty much like a startup's job is to learn and a company's job is to grow. A startup, what you're trying to do is maximize the learning for dollar spent. You want to learn as fast as you can and as cheaply as you can. So in my case, most of the best founders have a real grasp on what they know and what they don't know and are able to sort of intelligently talk about the unknowns and their path to figuring them.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“This new view, and I'm going to do something completely different that no one has ever done before, no one even knows they need to do. But finding a way to do something that has been done before in a new, inventive, creative way, doing it faster, better, cheaper, those are the opportunities that tend to attract me because at that point, the biggest risk that you have as a seed stage investor is the so what risk. If you build it, will the consumers actually engage? And if you're able to tell a story that says people have done X for a long period of time, but doing Y is 10X better, that's a very easy to understand bet as an investor. You could have clarity on the bet you're being asked to make.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, sure. I guess it depends what you're talking about, the extent of a behavior change, right? The level of transparency that you see people posting on social networks is a new and novel behavior in the last 15 years. Yet people did write letters and they did share information and they did send photos to people previously. On the one hand, you could say social networks a novel behavior change? Yeah. The fact that people are constantly chronicling their lives on Instagram, on Snapchat, on Facebook, of course that's a behavior change, but there was some common thread that they pulled on in terms of the human behavior belonging to a community, sharing their life with people and keeping people informed. But when you look at most tools that you use today, whether it's the iPhone or the apps on the iPhone, there were phones and used to take taxis before you took Uber. So from my perspective, I think that it's very hard to sort of say, I see this.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“Fund something where you at least have an early thread on the fact that people are asking that question. Now, it might be a very small group of people. It might be a group of early influences or early adopters. So if you assume that tens of millions of people are going to be asking this query in three years from now, but today there are 30,000 people who are really focused on this, like that's totally fine. But if it's a question that no one is asking right now, it becomes really hard to sort of see how you're in a typical venture funding landscape and timeframe that you'll actually be able to validate it.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“The hard part with a forecasted problem is now you're having to deal with the risk of time. You have to deal with the question of when will this be a problem? Not only are they right, but are they right in a period of time that's soon enough? As a seed stage investor typically, it's rare to see companies have more than 24 months of runway. So if a company has 24 months of runway and they want to raise their next round, maybe in 18 months and they're going to take six to nine months building whatever they have, you have a very tight window to actually be able to validate or demonstrate traction. When I founded first round, my co-founder was Howard Morgan, and he says he's made a lot of money funding things early and lost a lot of money funding things way too early. Part of the challenge is not only understanding the bet, but you're also making a very specific time bet. We like to sort of at least”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, oftentimes you have a founder who has a very clear understanding of what they're trying to build, but a less clear understanding of the need they're trying to solve in the market. And so the first question I would ask a founder in those cases is if I could give you the number one position on any Google search, if I knew Larry and Sergei and said, guess what? You're going to be the number one organic answer to search X. Like what is that search? And then the second question is, is that a search that people are searching for today or is that a prediction that you have as to that people will be searching for that in the future? And if so, why? So are you solving an existing pain point that people understand and are actively seeking a solution for? Or have you found something that you think will be a pain point but people don't even know it yet? And just like that very simple having to lay out a Google query forces a”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's really hard to see platforms that start day one as a platform. In almost all cases, they start off with a very compelling sort of single user or just initial value proposition and then expand.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“And it could be really sticky, and only then do you earn the opportunity to expand from a very compelling product to a compelling platform.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, so the answer is yes and yes. It is extremely overused. And I think for the most part, most platforms get their start. They have a killer app that's already innate in the product. Before Facebook became a platform, they were a very strong social network in and of itself. Most people don't remember, but when the iPhone launched, it wasn't an open platform. Every single app when you bought the iPhone was developed by Apple. And then they built the App Store and enabled other people to build on this. Salesforce far before becoming a B2B platform with Force.com was a very compelling CRM tool. So when we're evaluating platforms, what we're trying to understand is it's really hard to see someone instantiating a platform day one without a really compelling use case in terms of an owned and operated manner in terms of sort of that operator building something that has hooks.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure, Roblox is a virtual world gaming company, so it's a company that's targeted at kids. If you know someone who's age seven to 13, there's a 60 to 70 percent chance they are an active roadblocks player. The coolest part about this world, that all of these games and all of these experiences are created by the community members. So when Fortnite became a thing, Roblox users created their own version of Fortnite in Roblox. It's a world where there are just millions of games and those kids are actually getting paid to be developers based on other people using their games. You're talking about tens of millions of active users. And especially now just given the quarantine, every day is Saturday for Roblox.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I could look at our investment in a company called Roblox, which is a gaming company. And my partner, Chris Freelich brought it in, and we passed the first time. So we said no. And then Chris persevered and sort of went out and collected a lot more data and brought it back. And thankfully, we agree with him. But there have been times where we've said no to an initial investment and then four or six months later been able to reassess it either with new information or a different lens to evaluate it.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“So I'd say it's anywhere from zero to two. It's hard to do more than two in any given meeting. And one of the things we've done just historically given the pace of seat stage is that we've actually moved to two partner meetings a week rather than one. So we have meetings on Monday and Thursday to sort of increase the access to our ability to get to a decision just given the competitive environment. So for us, if we're having partner meetings twice a week, it's hard for me to see us inviting more than two founders into a partnering.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“So it still is two thirds. It tends to be far more of a conversation than a vote. And I think for us, the biggest sources of disagreement are on relative weighting of risks or opportunities. So we might meet with a founder that's building some hardware, and one partner would say, I think the founder is completely off on their timing or their cost of complexity of actually building this piece of hardware. And I think a different partner might say, I agree. The founder is off, but that's a risk I am willing to take.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“People, we raise a society of navigators of map followers, but most of the best entrepreneurs are cartographers and know how to create their own map.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“By telling you what class participation is 15% and these assessments are this, and they tell you what winning looks like. Yet when you start a company, no one tells you what to read and what not to read. No one tells you when to do something and no one tells you what winning looks like. And so it's really hard. You're kind of like stepping off this conveyor belt of conformity and just going the other way. So one of the things that we really look for are what our experiences in that founder's past where they have gotten off that conveyor belt, where they have been non-conformist. And it doesn't have to be entrepreneurial. It could be, did they choose a major in college or did they create their own major? Do they join a club or nonprofit to help or do they start a club or nonprofit? Do they read books or magazine articles or write them? What are the things that they do that show that they're comfortable going off map?”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“Look, being a founder is hard. You're just dealing with massive amounts of risk of unknown and of uncertainty. But more importantly, you're going against the grain of everything that is taught. When we raise kids today, our educational system is such that we've built a product that values conformity. When kids go through school, we built an education system that's designed to raise the greatest number of people up and increase their standard of living. And we do that by conformity. And so everything a kid is taught is about how to follow the rules. Like when you show up your first day of class at a college and they give you the syllabus, what is that? That is a roadmap for your class. You don't have to guess what to read. The professor will tell you what to read. You don't have to guess when to read it. They'll tell you when to read it. They'll tell you when the quizzes are and what the tests are. They'll give you the study guides. And in fact, they'll give you the cheat codes for the class.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's far more about the founder's personality than the original idea. And there really is no original idea. I think an idea evolves over time. So I think a founder is just pulling this thread. They're trying to sort of discover some insight and something where they believe they're right in the market, either believes they're wrong or hasn't realized it yet. So I think that most of the best founders are really good at sort of weaving that tapestry as they pull that thread and the idea evolves. So even when you look at most of the companies that we've backed by the time that they're successful, oftentimes it looks very different than where it first started. So for us, sort of, do we look at the product that when someone pitches us if they have a prototype? Of course we do. But for us, the product is more of a lens to understand how a founder makes decisions, what a founder prioritizes and how they process signal and separate signal from noise in terms of collecting data from the market.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say that AWS is still cheaper in that when you sit down and look, if you're a startup company and you need to actually go out and buy that hardware yourself, there's just a certain base cost that you're going to have to spend. So I think AWS can allow a company to get started for a couple hundred bucks on their credit card, which just is much cheaper. I think part of the challenge is access to talent has gotten a lot more expensive. You're now building for multiple platforms. You're needing to build for native web, for Android, for iPhone. And so you're sort of duplicating costs. So I do think that the cost curve, the decreases have pretty much flatlined. And I don't see it sort of continuing to get 10X cheaper over the next 10 years to start a company.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“I got my first start while I was an undergraduate at Penn. I co founded a company called Infinotics back in 1991. We built a product called Homework Helper, which was the first product on CompuServe, Prodigy and America Online that offered sort of educational resources to students. And we were fortunate enough to go public in 1996. After that, I started a company called Half.com.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source
“Wouldn't say washed out, but I do believe that you're going to see a rationalization. I think that the vast majority of those funds were funded by individuals and family offices who have exposure to public as well as private asset classes. And I think that you're going to see the capital get a lot tighter for those folks. I think you're even going to see it get tighter for funds that have been backed by traditional institutional endowments, pension fund type LPs as well. But yes, I do think you're going to see sort of all of this ripple through.”
2020-04-28 · Invest Like the Best · Josh Kopelman - The Past, Present, And Future Of Seed Investing - [Invest Like the Best, EP.170] · IDENTIFIED FROM THE TRANSCRIPT · source