Mar 9, 2016 · 28m · 20vc
20VC: Christian Hernandez on The Importance of Mobile and The Relationship Between Growth vs Revenue
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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 Christian Hernandez, co-founder and partner at White Star Capital, discussing his career trajectory from tech operator to venture capitalist. Hernandez shares insights on the evolution of European tech hubs, venture capital funding mechanics, executive talent acquisition, and strategic growth considerations for early-stage startups.
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 23.3% of the talking time here. How this is scored →
Harry as informed peer 3.1 Guest teaching 3.2 Guest disagreement 1.2 Harry pushing back 2.0
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 14:45 Christian rejecting the no-revenue startup myth
Christian strongly refutes the common founder pitch that revenue can be ignored for growth, using S-1 filings to demonstrate that Google and Facebook generated significant revenue very early.
Hardest push from Harry ▶ 16:26 Harry calling out VC hiring hypocrisyHarry directly confronts the guest by asking whether it is ironic for VCs to preach risk-taking in executive hiring while de-risking their own firms by exclusively hiring HBS graduates.
Biggest teaching moment ▶ 6:30 Christian breaking down VC fund scarcity in EuropeChristian educates Harry on structural venture capital gaps by contrasting the exact number of active Series A funds across the West Coast, New York, and Europe, while explaining EIS tax distortions.
Harry holds his own ▶ 13:06 Harry citing Ben Evans on mobile centralityHarry demonstrates domain expertise by introducing tech analyst Ben Evans' thesis on mobile as the center of the computing universe to counter Christian's balanced web/mobile stance.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Podcast Station Identification Bumper | 1 | 2 | 0 | 0 | Harry introduces Christian and prompts him to share his origin story in tech. Christian outlines his career trajectory from MicroStrategy through Microsoft, Google, and Facebook. | |
| European Tech Ecosystem Evolution | 3 | 4 | 1 | 2 | Harry asks about the evolution of European tech and probes whether the Series A crunch stems from startup quality or lack of capital. Christian provides detailed data comparing active Series A funds in Europe versus the US. | |
| White Star Capital's Transatlantic Model | 3 | 3 | 1 | 1 | Harry asks about White Star Capital's transatlantic strategy and changing check sizes for Series A rounds. Christian details their transatlantic bridge approach and typical investment parameters. | |
| The Role and Future Evolution of Mobile | 4 | 3 | 2 | 4 | Harry cites Mattermark data and challenges Christian's web-and-mobile view by referencing Ben Evans' thesis on mobile centrality. Christian responds by distinguishing Western desktop usage from emerging mobile-first markets. | |
| Balancing Growth vs Revenue in Startups | 3 | 5 | 3 | 2 | Harry asks if growth and revenue can co-exist early in a startup's life. Christian forcefully debunks the founder myth that tech giants like Facebook and Google delayed monetization during their initial growth phase. | |
| Executive Hiring and Talent Shortages in Europe | 5 | 3 | 2 | 5 | Harry challenges VC industry norms by asking if it is ironic that VCs advise bold hiring while de-risking their own firms by hiring HBS grads. Christian addresses European executive talent bottlenecks while engaging with the question. | |
| Disruption and Structural Limits in Venture Capital | 4 | 5 | 1 | 2 | Harry and Christian examine whether venture capital itself can be disrupted, referencing Andreessen Horowitz and AngelList. Christian explains the structural scalability limits and 10-year fund commitments inherent to VC. | |
| Quickfire Round: Favorite Book and Career Highlight | 1 | 1 | 0 | 0 | Harry leads a rapid quickfire round covering Christian's favorite book, career highlights, and productivity tools in an agreeable tone. | |
| Quickfire Round: Admired Investors and Fund Scaling Strategy | 4 | 3 | 1 | 2 | Harry asks about admired investors and presses Christian on whether White Star will discipline itself to maintain its fund size like Foundry Group. Christian elaborates on his commitment to early-stage investing. |
Statements from this episode (21)
MicroStrategy lost 72% of its $30B market cap in a single day
“We went public, had a thirty billion market cap valuation, And then lost 72% in one day.”
UK seed investments grew 10x between 2011 and 2016
“Seed investments in the UK have gone up 10 X in the last five years.”
UK Series A funding grew only 1.4x between 2011 and 2016
“Series A had actually only gone up, I believe, 1.4 X in that same period.”
Paris startup ecosystem is underrated for momentum and talent
“Paris is, I think, underrated for what it is in terms of momentum and talent.”
Europe had only 42 active Series A funds versus 140 out West
“Active Series A funds, which for us meant funds that have done at least five Series A investments in the last three years. And we looked at West Coast versus New York versus Europe. West Coast, I think that's something like a 140 active Series A funds. New Yor…”
UK tax relief schemes distort the ecosystem by funding lifestyle businesses
“EIS and SEIS does mutate the UK ecosystem. Some of the guys that are getting seed funding from Goldman Sachs bankers, nothing wrong with Goldman Sachs bankers. Probably should not be getting Series A funding, right? It's not a VC fundable business, but it migh…”
White Star Capital has made zero investments on the US West Coast
“So we now with the fund, we do actually done zero investments in the West coast.”
VC stage designations like Series A are meaningless across different geographies
“Yeah, and I think calling it C or series A or series B means nothing nowadays, because it really varies by geography.”
Consumer startups cannot rely exclusively on mobile apps without a web presence
“Mobile will be a strong component of any consumer facing offering. I don't believe in mobile only. I actually think, and we saw it even at Facebook with Instagram, and we saw it with Path, we saw it with others. You do need to have a landing point on the web a…”
E-commerce continues to convert better on desktop screens than on mobile
“And e-commerce is increasing, but still converts better on, on a bigger screen.”
Facebook generated $80 million in revenue within three years of its launch
“Three years after Launching in a dorm room, Facebook was making about eighty million dollars and quickly jumped to over three hundred million dollars and then took off.”
Google achieved profitability within two or three years of its founding
“Google was actually profitable, I think, by year two or year three.”
Day-one startup employees rarely scale into C-suite executive roles
“I think that one of the hardest decisions is the fact accepting that the guy that was with you or gal on day one is not likely to be that SVP of sales or even CTO that you might need to scale your company as you hit thirty million users.”
Head of product is the hardest startup role to hire in Europe
“So head of product is probably the hardest role to find in Europe.”
General Assembly courses will not produce elite head of product leaders
“I mean, you're not going to become a product man, a rockstar head of product by actually going to a general assembly product management course.”
Venture capital cannot be disrupted without changing the 10-year fund model
“We're still seen in the same bucket as a private equity fund, 10 years capped, Return my money based on capital calls, minimum return, and until that change, some of the flexibility that might be needed to disrupt the asset class is not going to be there.”
AngelList's platform and $400M fund could disrupt venture capital deal flow
“AngelList is a great example where AngelList builds a platform on top of which they prove success, on top of which they go raise a four hundred million dollar fund. That could have, that has the potential to be a disruptive new way of doing both deal flow and …”
Private equity and banking pathways into VC are more prevalent in Europe
“Or a third part path, which is more prevalent, I think, in Europe than in the US, you come in through the ranks of private equity or banking and then come in as an investment side.”
Becoming a venture capital partner requires a multi-decade commitment
“If you're going to be a partner, you have to make a commitment for a decade, if not decades because if you're raising a fund and the promise that you are part of that story for the life of the fund, and by the way, in that fund, you will probably raise fund tw…”