Aug 17, 2015 · 28m · 20vc
20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures
0:00 / 0:00
gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The 20 Minute VC, host Harry Stebbings interviews Ezra Galston of Chicago Ventures about his unconventional journey from professional poker to venture capital, Chicago Ventures' investment thesis, marketplace economics, and strategies for identifying standout opportunities in crowded markets.
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 20.7% of the talking time here. How this is scored →
Harry as informed peer 2.3 Guest teaching 3.2 Guest disagreement 0.5 Harry pushing back 1.8
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 21:55 Siding against Bitcoin Skeptics
Ezra takes a clear contrarian stance on Bitcoin, explicitly picking Ben Horowitz's side over prominent skeptic Felix Salmon.
Hardest push from Harry ▶ 15:06 Pushing Back on Food Tech OvercrowdingHarry interrupts Ezra to challenge the food tech boom, arguing that minute differentiation across crowded startups creates serious investment risk.
Biggest teaching moment ▶ 7:15 Educating on Midwest Corporate DensityEzra educates Harry on how having a third of Fortune 500 companies in the Midwest gives regional startups an enterprise sales edge.
Harry holds his own ▶ 15:57 Recognizing Hungry Root's BackerHarry demonstrates his industry knowledge by instantly connecting Ezra's mention of Hungry Root to previous guest Charlie O'Donnell at Brooklyn Bridge Ventures.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Ezra Galston's Path from Poker to Venture Capital | 0 | 2 | 0 | 0 | Ezra shares his extended personal background spanning early programming, poker, rabbinical school, and angel investing. Harry remains entirely passive, asking one open prompt and letting the guest speak monologue-style. | |
| Chicago Ventures' Thesis and the Midwest Advantage | 1 | 3 | 0 | 1 | Ezra outlines Chicago Ventures' fund size and regional thesis, explaining the proximity advantage to Fortune 500 headquarters. Harry asks standard introductory and geographic proximity questions without pushing back. | |
| Key Metrics and Dynamics in Marketplace Investments | 3 | 4 | 1 | 2 | Ezra references Bill Gurley's marketplace essays as mandatory reading and breaks down unit economics and frequency. Harry demonstrates knowledge by referencing the article for show notes and probing on supply/demand balance. | |
| Navigating Food Tech Trends and Crowded Startup Markets | 5 | 3 | 1 | 5 | Harry actively interrupts to challenge the lack of differentiation and overcrowding in on-demand food startups. He also demonstrates sector knowledge by identifying Hungry Root's investor Charlie O'Donnell of Brooklyn Bridge Ventures. | |
| Practical Advice and Strategies for Breaking into VC | 2 | 5 | 0 | 1 | Ezra offers actionable advice for breaking into VC and heavily praises Harry's podcast networking strategy. Harry adds light humorous banter about the podcast space being crowded. | |
| Quickfire Round: Insights, Tools, and Recent Investments | 3 | 2 | 1 | 2 | During the quickfire round, Ezra covers various personal preferences and tools. Harry stays sharp by calling out Ezra's humorous verbal slip about dying once a year. |
Statements from this episode (15)
Galston: Poker startup CardRunners grew to 15,000 customers in 18 months
“When I joined him, I think I was, like, the second employee. He had maybe 500 customers and, like, 500,000 dollars a year in revenue. Like a very small startup. And 18 months later, we had 15,000 paying customers.”
Galston funded his first angel investments using professional poker earnings
“I'd taken a lot of the money that I had from the poker world, and a lot of my friends, as they kind of churned out from the world of professional poker, they would start up companies, and I invested in some of them.”
Chicago Ventures' $40M first fund made 39 investments averaging $500K
“The first fund was forty million dollars. We made 39 investments out of that fund. Average ticket size, like first check-in, around 500,000 dollars, maybe slightly under that.”
Galston: One-third of the Fortune 500 is headquartered in the Midwest
“A third of the entire Fortune 500 is right here in the Midwest.”
Galston: Chicago is Uber and Instacart's second or third largest market
“If you ask Uber or Instacart, what, you know, their second or third most important market is, it's almost inevitably Chicago.”
Chicago Ventures avoids leading SF and LA rounds without local proximity
“For kind of our investments in SF for LA, we're traditionally not the lead investor because we do like to lead that, leave that to someone who is a little bit closer, can be a little bit more hands-on.”
Galston: Bill Gurley's 10 marketplace drivers essay is the absolute Bible
“The Bible here which I'm sure you've read the Bible here is, is Bill Gurley's kind of 10 marketplace drivers blog posts that he wrote in like, it's the absolute Bible. And if you want to even, you know, have like a working knowledge of digital marketplace busi…”
Galston: B2B marketplaces offer massive transaction frequency from enterprise client hosting
“If you think about, like, Deloitte or BCG or Google, like, they're throwing, you know, they're hosting clients every single night, 365 days of the year, right? So there's actually a huge amount of frequency potential even in B to B marketplaces”
Galston: Marketplace supply becomes sticky when workers double their traditional earnings
“And if they're making double, then that's great news, and that starts to really excite me, because then I just know they're going to be sticky.”
Galston: The global frozen food market is worth $200 billion
“Frozen foods is a much smaller space than delivery, but it's still a two hundred billion dollar space.”
Galston broke into venture capital without a network or sending resumes
“I never sent a resume to a single VC and I had no network.”
Galston cold-emailed VCs a mapped relationship graph of his gaming network
“What I did is I created like this interest or this relationship graph where I put myself in the middle and I put all the different players in the gaming world around me and showed who I knew, like what executive level, how like the relationships developed. And…”
Galston predicts in 2015 that Bitcoin will succeed long-term
“I love Bitcoin. I've spent a lot of time looking into it. You know, I'll take Ben Horowitz's side of the Felix Salmon bet. I think it'll fly long term.”
Galston rates Etsy stock between a sell and hold at $1.6B
“So I actually just looked it up. It's basically at 1.6 billion, which is where it kind of went out. I'd say somewhere between a sell and a hold.”
Chicago Ventures invested in Attendant, a death and funeral tech startup
“And the other is a company called attendant. So I guess the latter was probably more recent. So attendant is a company that's building a suite of tools for the death and funeral industry. So we spoke about differentiation earlier. So I invested in that one bec…”