Jul 13, 2015 · 29m · 20vc
20 VC 053: Inside Union Square Ventures with Jonathan Libov @ Union Square Ventures
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In episode 53 of The 20 Minute VC, host Harry Stebbings interviews Jonathan Libov of Union Square Ventures to explore USV's thesis-driven investment strategy, the mechanics of network effects, and changing tech paradigms from conversational UI to decentralized marketplaces.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 18.7% of the talking time here. How this is scored →
Harry as informed peer 1.6 Guest teaching 2.0 Guest disagreement 0.5 Harry pushing back 0.3
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 20:40 Rejecting binary Apple Music prompt
Jonathan resists Harry's binary 'fly or die' framing on Apple Music, refusing to make simple predictions and pointing out subtle product nuances instead.
Hardest push from Harry ▶ 22:40 Pressing on Apple Music shortcomingsWhen Jonathan hesitates to answer what Apple Music is missing, Harry presses him directly with follow-up questions to elicit a specific feature critique.
Biggest teaching moment ▶ 18:57 Kuhn's paradigm shifts in investingJonathan educates Harry by connecting Thomas Kuhn's philosophy of science and framework shifts directly to venture capital investing mental models.
Harry holds his own ▶ 20:10 Highlighting tech interview clichésHarry demonstrates his knowledge of standard startup literature by contrasting Jonathan's philosophical choice with the ubiquitous mention of Ben Horowitz's book.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Jonathan's Journey to Union Square Ventures | 1 | 1 | 0 | 0 | Harry welcomes Jonathan and asks standard warm-up questions about his career path to Union Square Ventures. Jonathan explains his transition from product management in Tel Aviv to joining USV, speaking appreciatively of the firm's broad definition of networks. | |
| The Core Thesis Behind USV's Success | 2 | 2 | 0 | 0 | Harry prompts a discussion on the secret behind USV's investment success and Fred Wilson's blogging. Jonathan elaborates on defensibility via network effects and the cognitive benefits of blogging publicly to refine thoughts. | |
| The Future of SMS and Conversational UI | 2 | 2 | 1 | 0 | Harry asks whether SMS is dead, prompting Jonathan to gently reframe SMS as a crucial mobile identifier and UI layer. Jonathan cites Reserve as an example of effective SMS integration without conflict. | |
| Building FiftyApp and Sports Analytics | 1 | 1 | 0 | 0 | Harry asks about FiftyApp, Jonathan's side project for pro football analytics. Jonathan explains win-probability visual graphs and curating sports Twitter content in an amicable exchange. | |
| USV's Thesis-Driven Investment Methodology | 2 | 3 | 1 | 0 | Harry asks how USV validates potential investments, leading Jonathan to contrast USV's thesis-driven approach with traditional deal-flow firms. Jonathan uses Figure 1 as an example of unexpected thesis alignment. | |
| Quickfire: Favorite Book and Paradigm Shifts | 2 | 3 | 1 | 2 | During quickfire, Jonathan cites Thomas Kuhn's Structure of Scientific Revolutions to explain paradigm shifts in investing, which Harry praises as superior to typical responses like The Hard Thing About Hard Things. Harry presses Jonathan when he hesitates on Apple Music's product shortcomings. | |
| Quickfire: Uber and Regulatory Employment Issues | 2 | 2 | 1 | 0 | Harry inquires about Uber's labor classification challenges, and Jonathan offers a nuanced view showing that driver sentiment isn't uniformly pro-W2. Jonathan also shares reflective advice to his younger self. | |
| Recent Investment Spotlight: OB1 and OpenBazaar | 1 | 2 | 0 | 0 | Harry asks about USV's recent investments, and Jonathan highlights OB1 and OpenBazaar's decentralized marketplace protocol. Jonathan explains how blockchain protocols can eliminate marketplace take rates. |
Statements from this episode (17)
USV Required Short Video Submissions for Analyst Applicants
“Well, the initial screening involved, ah, recording two two-minute videos. I think the questions were, ah, what aspects of tech most inspire you, or what are your greatest inspirations? And the other question was, ah, I think just to tell you, tell them a litt…”
USV Evaluates Startup Pitches Using Broad Historical Network Frameworks
“When the term network comes up, we're talking in the most, let's say, Literally talking about networks of all types. I mean, it could be, it could go back to the railroad, railroad network. It could be actual social networks. And that gives you a real sort of …”
Network Effects Are the Primary Defensible Quality of Internet Businesses
“I think they had a real belief that networks would be the defensible quality of the internet, or the defensible thing about building a business on the internet. Whereas, let's say, In prior businesses like, ah, Microsoft Office or Windows or any other software…”
Writing Publicly Forces Deep Thinking and Drives Self-Learning
“When you're formulating it for a blog post and something that's meant to be consumed, you really need to think deeply and figure out every single angle so that you're, you know, you're communicating something which is coherent and clear and powerful. And I thi…”
SMS Is Becoming More Relevant on Mobile, Not Dying
“I certainly don't believe SMS is dead, and in some ways you could argue that it's relevance, it's becoming ever more relevant as we move from the desktop to mobile.”
SMS Will Not Become a Primary Interface for Mobile Services
“I do also think that in in a variety of cases, I, you know, I'm not a believer. That SMS is going to, because there are people who are quite a bit more optimistic than I am that SMS is going to be one of the primary ways that we interact with services on our p…”
Visual Win-Probability Graphs Convey Game Dynamics Better Than Box Scores
“If you look particularly like at the past Super Bowl, which had a lot of wild swings, you get a visual graph of the game Which really tells the story of the game in a way that the score, the box score doesn't. You actually get a really quick visual snapshot of…”
Twitter Provides Smarter Sports Analysis Than Mainstream ESPN Commentary
“There's a lot of great content on Twitter, and about Pro football and sports in general, and as someone who's very into Twitter, it's easy for me to curate you know, a timeline or lists of people who have smart things to say about football beyond the kind of b…”
Sports Tech Is Tough for VCs Due to IP Lockup
“And a tough one for VCs just because a lot of that industry is locked down by intellectual property and things like that, which actually is something that we had to deal with 50.”
USV Operates as a Thesis-Driven Firm Rather Than Deal-Flow Driven
“We're thesis driven, which means that we operate, we look out at what's happening based upon are sort of core beliefs about the internet and how to grow a business on the internet. So in contrast to some firms, which I which are more, I think, deal flow orient…”
Kuhn's Paradigm Shift Concepts Directly Apply to Venture Investing
“And I think that's actually, you know, I hate to sound too grandiose, I think some of those ideas are actually applicable in investing, where, you know, you bring with you a certain framework for looking at the world and then the, then that framework breaks do…”
Apple Music's Sterile Design Gives Reason for Pessimism
“That's actually the exact analogy that I made, and it's sort of, that's one reason to be not so optimistic about Apple Music. As soon as, I mean, it just, that struck me immediately as not at all the way that I think about music, you know, just choosing betwee…”
Uber Is Capitalized Well Enough to Adapt to Worker Classification Rules
“I think they're so well capitalized that they can figure out a way to make their model work with W-II's or ten-ninety-nines.”
Polling Shows Most Uber Drivers Prefer Independent Status Over Employee Status
“If you actually look at some of the polls, it's actually not the case. I mean, if you even talk to a lot of Uber drivers, they're not even aware of it, and if you ask them if they prefer to be W-II or T-Nine-I mean, not necessarily in those terms, they say tha…”
Libov Built a Pre-iPhone Tinder Prototype on Windows CE
“When I was in college, a friend and I had an idea for what is basically Tinder now, but this was pre-iPhone, and we and try to get a start off the ground where we had a prototype working on a Windows CE phone.”