On this special segment of The Full Ratchet, the following Investors are featured:
- Jacob Effron of Redpoint
- Ethan Austin of Outside VC
- Arianna Simpson of Andreessen Horowitz
We asked guests to tell the most important lesson they’ve learned in their career.
The host of The Full Ratchet is Nick Moran of New Stack Ventures, a venture capital firm committed to investing in founders outside of the Bay Area.
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Transcribed with AI:
0:19
Welcome back to utfr On today’s special segment, we ask guests to tell the most important lesson that they’ve learned in their career. Here’s a segment called Lessons Learned.
0:35
On today’s special segment, we have Jacob Efron of red point, what’s the biggest mistake or hardest lesson you’ve learned as an investor, and what’s the story behind that lesson?
0:44
Always Learning, that’s for sure. I think one, one thing that comes to mind is, you know, I think early in some of these AI categories, we had categories that we knew were going to be big, it just felt intuitively like there’s no way. There’s not a ton of enterprise value created in these in these categories. It’s just such a clear trend that’s going to continue. But it was not obvious how companies would differentiate, or, you know, be able to compete against each other. And I think we wanted, like, more, you know, or I certainly wanted a little bit more certainty and like, how things would unfold, and you know, who would end up being the the winner and the differentiated one. And you know, it to some extent, that was almost an over intellectualization. And I’ve kind of tried to balance that, I think always super important to be, you know, deeply rigorous and intellectual. But you know, in retrospect, if you haven’t, if you have such conviction that a category is going to happen, and you have conviction in a team, you know, I think especially for our model, it’s important to make those bets early, even if it’s not you can’t tell the cleanest story today on, you know, that level of differentiation you’re basically betting on on teams to compound over time. And I think, you know, now, in retrospect, what I can say is, you know, I kind of figured maybe at the time, well, there’ll be these AI businesses that are super differentiated, and so I’ll wait for those. And now, with the benefit of hindsight, I’m like, Oh, it turns out, you differentiate over time through velocity. Nobody has those off the bat. I wish I could tell myself that two years ago, because I would have made a lot more good
2:21
investments on today’s special segment, we have Ethan Austin of outside VC. Ethan, what is one of the biggest mistakes or hardest lessons you’ve learned as an investor, and what’s the story behind it?
2:32
I think losing companies, I talked about this a little bit earlier, but like losing companies that you knew or you get a feeling we’re going to be really great. And, and I worked on a company for two years to get them when I was writing a Tech Stars Western Union program. And and we had a partner who was a single, you know, sole LP, who had veto power. And they only vetoed, I think, one or two companies ever in our program. And this was one of the companies they vetoed, and it got to, you know, Series C within, like, a couple years of investing or not investing. And I think the last time that I kind of take away from all that is just like, you can, you can find great companies, and you can do all that work, like spent two years trying to get them. They said yes, and then I got vida, and you know, one is I became a solo GP, so there’s, there’s no, there’s no chance of something like that happening again. But then it’s just like, you can’t lose the companies you really going after. You can’t do all that work and then lose companies. And so I’ve worked really, really hard to try and make sure I don’t do that.
3:48
On today’s special segment, we have Ariana Simpson of Andreessen Horowitz, what’s the biggest mistake or hardest lesson you’ve learned as an investor, and what’s the story
3:57
behind it? A good founder can’t turn a bad market into a good market. I think, you know, my relative weighting of the market variable and the founder variable has shifted over time. I think when I started investing, I was 100% focused on the on the founder and I was very unsophisticated and unconcerned by market unsophisticated in and unconcerned by market considerations. Over time, that has shifted. I do think, you know, finding great founders is a necessary part of this business. And you certainly can’t be successful if you don’t do that. But if you are not thoughtful in the market, the business model, some of these other considerations, you may do okay, but you won’t do great. And you know, I think the right answer. Is, is probably that you need both, which is, sounds like a bit of a cop out. It’s nice to be like, Oh, it’s 100% X. But the reality is, that’s not how it works. And so now I definitely look for, you know, I’m thinking about, what is the market framework in which a great founder can be very successful, rather than, you know, just looking at at the founder themselves, because the reality is, like the market dramatically affects the difficulty of everything that you’re doing. You know, how easy is it to get customers? What kind of infrastructure challenges are you facing? All of these factors can really either be accelerants or get you bogged down in a specific way. And so, you know, it’s hard enough to start a company in any industry that you need to have some positive wins pushing you along, rather than kind of having everything go against you.
6:02
So that will conclude this installment of investor stories. If you’re enjoying the program and would like to see it continue, take a moment and leave a five star review in iTunes. Okay, that will wrap things up for today until next time over. Prepare, choose carefully and invest confidently. Thanks for joining me.
