StarZero All shows Try the podcast clipper →

Jun 6, 2016 · 24m · 20vc

20VC: Spark's Bijan Sabet on Investing in Twitter, Tumblr and Foursquare & Why First Time Founders Are So Exciting

Bijan Sabet · 16m spoken Harry Stebbings · 7m spoken
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 Bijan Sabet, General Partner at Spark Capital, about his path into venture capital, his early investments in Twitter and Tumblr, his philosophy on backing first-time founders, and his outlook on consumer tech cycles.

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 30.9% of the talking time here. How this is scored →

Harry as informed peer 3.4 Guest teaching 2.4 Guest disagreement 2.0 Harry pushing back 1.8
05100:0010:0020:001:43–4:49 · Harry as informed peer 2/10 Bijan Sabet's Path to VC and Founding Spark Capital Harry asks standard, warm background questions about Bijan's transition to VC and founding Spark Capital. The dynamic is purely collaborative and introductory without pushback or deep technical probing.4:49–10:33 · Harry as informed peer 3/10 The Value and Audacity of First-Time Founders Harry guides Bijan through his early investments in Twitter and first-time founders. Bijan explains how Twitter demonstrated viral distribution during the Hudson River landing, offering insight while keeping the tone warm.10:33–14:04 · Harry as informed peer 4/10 Guiding First-Time Founders Through Scaling and Leadership Harry introduces a framework from another VC about founder rate of learning. Bijan rejects the underlying VC assumption that founders must be market-ready, calling quick founder replacement a flaw in typical venture thinking.14:04–18:05 · Harry as informed peer 5/10 Hardware Investing Trends and Navigating Market Cycles Harry pushes Bijan on Spark's consumer strategy by invoking Fred Wilson's well-known consumer downturn thesis. Bijan respectfully reframes the market dynamic as a temporary lull between breakout cycles.18:06–19:58 · Harry as informed peer 3/10 Growth Versus Revenue Dynamics in Venture Backed Startups Harry asks about the trade-off between growth and revenue. Bijan delivers a nuanced explanation distinguishing sustainable growth from inefficient spend and advises when startups should avoid taking VC.1:43–4:49 · Guest teaching 1/10 Bijan Sabet's Path to VC and Founding Spark Capital Harry asks standard, warm background questions about Bijan's transition to VC and founding Spark Capital. The dynamic is purely collaborative and introductory without pushback or deep technical probing.4:49–10:33 · Guest teaching 2/10 The Value and Audacity of First-Time Founders Harry guides Bijan through his early investments in Twitter and first-time founders. Bijan explains how Twitter demonstrated viral distribution during the Hudson River landing, offering insight while keeping the tone warm.10:33–14:04 · Guest teaching 3/10 Guiding First-Time Founders Through Scaling and Leadership Harry introduces a framework from another VC about founder rate of learning. Bijan rejects the underlying VC assumption that founders must be market-ready, calling quick founder replacement a flaw in typical venture thinking.14:04–18:05 · Guest teaching 3/10 Hardware Investing Trends and Navigating Market Cycles Harry pushes Bijan on Spark's consumer strategy by invoking Fred Wilson's well-known consumer downturn thesis. Bijan respectfully reframes the market dynamic as a temporary lull between breakout cycles.18:06–19:58 · Guest teaching 3/10 Growth Versus Revenue Dynamics in Venture Backed Startups Harry asks about the trade-off between growth and revenue. Bijan delivers a nuanced explanation distinguishing sustainable growth from inefficient spend and advises when startups should avoid taking VC.1:43–4:49 · Guest disagreement 1/10 Bijan Sabet's Path to VC and Founding Spark Capital Harry asks standard, warm background questions about Bijan's transition to VC and founding Spark Capital. The dynamic is purely collaborative and introductory without pushback or deep technical probing.4:49–10:33 · Guest disagreement 1/10 The Value and Audacity of First-Time Founders Harry guides Bijan through his early investments in Twitter and first-time founders. Bijan explains how Twitter demonstrated viral distribution during the Hudson River landing, offering insight while keeping the tone warm.10:33–14:04 · Guest disagreement 3/10 Guiding First-Time Founders Through Scaling and Leadership Harry introduces a framework from another VC about founder rate of learning. Bijan rejects the underlying VC assumption that founders must be market-ready, calling quick founder replacement a flaw in typical venture thinking.14:04–18:05 · Guest disagreement 3/10 Hardware Investing Trends and Navigating Market Cycles Harry pushes Bijan on Spark's consumer strategy by invoking Fred Wilson's well-known consumer downturn thesis. Bijan respectfully reframes the market dynamic as a temporary lull between breakout cycles.18:06–19:58 · Guest disagreement 2/10 Growth Versus Revenue Dynamics in Venture Backed Startups Harry asks about the trade-off between growth and revenue. Bijan delivers a nuanced explanation distinguishing sustainable growth from inefficient spend and advises when startups should avoid taking VC.1:43–4:49 · Harry pushing back 1/10 Bijan Sabet's Path to VC and Founding Spark Capital Harry asks standard, warm background questions about Bijan's transition to VC and founding Spark Capital. The dynamic is purely collaborative and introductory without pushback or deep technical probing.4:49–10:33 · Harry pushing back 1/10 The Value and Audacity of First-Time Founders Harry guides Bijan through his early investments in Twitter and first-time founders. Bijan explains how Twitter demonstrated viral distribution during the Hudson River landing, offering insight while keeping the tone warm.10:33–14:04 · Harry pushing back 2/10 Guiding First-Time Founders Through Scaling and Leadership Harry introduces a framework from another VC about founder rate of learning. Bijan rejects the underlying VC assumption that founders must be market-ready, calling quick founder replacement a flaw in typical venture thinking.14:04–18:05 · Harry pushing back 3/10 Hardware Investing Trends and Navigating Market Cycles Harry pushes Bijan on Spark's consumer strategy by invoking Fred Wilson's well-known consumer downturn thesis. Bijan respectfully reframes the market dynamic as a temporary lull between breakout cycles.18:06–19:58 · Harry pushing back 2/10 Growth Versus Revenue Dynamics in Venture Backed Startups Harry asks about the trade-off between growth and revenue. Bijan delivers a nuanced explanation distinguishing sustainable growth from inefficient spend and advises when startups should avoid taking VC.

speaking balance: gold is Harry, purple is the guest (3 minute bins)

0:00 · Harry 62.2% · guest 37.8%0:00 · Harry 62.2% · guest 37.8%3:00 · Harry 18.2% · guest 81.8%3:00 · Harry 18.2% · guest 81.8%6:00 · Harry 29.2% · guest 70.8%6:00 · Harry 29.2% · guest 70.8%9:00 · Harry 23.7% · guest 76.3%9:00 · Harry 23.7% · guest 76.3%12:00 · Harry 26.7% · guest 73.3%12:00 · Harry 26.7% · guest 73.3%15:00 · Harry 14.2% · guest 85.8%15:00 · Harry 14.2% · guest 85.8%18:00 · Harry 24.3% · guest 75.7%18:00 · Harry 24.3% · guest 75.7%21:00 · Harry 38.4% · guest 61.6%21:00 · Harry 38.4% · guest 61.6%24:00 · Harry 100% · guest 0%24:00 · Harry 100% · guest 0%
Sharpest disagreement ▶ 13:20 Bijan criticizes conventional VC impatience

Bijan explicitly rejects the premise that founders need to be market-ready from day one, calling it a flawed assumption that leads VCs to make premature decisions about replacing founders.

 Hardest push from Harry ▶ 16:00 Harry brings up Fred Wilson's downturn thesis

Harry directly challenges Spark's core consumer investment thesis by citing Fred Wilson's post on the consumer downturn and asking Bijan to defend his contrasting strategy.

 Biggest teaching moment ▶ 9:07 Bijan explains organic viral distribution mechanics

Bijan reframes how social platforms scale by demonstrating how an unknown user's photo of the Hudson River plane crash reached millions without requiring a massive follower count.

 Harry holds his own ▶ 12:59 Harry leverages industry benchmark on founder learning curves

Harry demonstrates industry expertise by bringing up Mark Zuckerberg's rapid development curve and asking whether rate of learning is the key metric for evaluating first-time founders.
the scores for every segment, with the reasoning behind each
ChapterTopicHarry as informed peerGuest teachingGuest disagreementHarry pushing backWhy
Bijan Sabet's Path to VC and Founding Spark Capital 2111 Harry asks standard, warm background questions about Bijan's transition to VC and founding Spark Capital. The dynamic is purely collaborative and introductory without pushback or deep technical probing.
The Value and Audacity of First-Time Founders 3211 Harry guides Bijan through his early investments in Twitter and first-time founders. Bijan explains how Twitter demonstrated viral distribution during the Hudson River landing, offering insight while keeping the tone warm.
Guiding First-Time Founders Through Scaling and Leadership 4332 Harry introduces a framework from another VC about founder rate of learning. Bijan rejects the underlying VC assumption that founders must be market-ready, calling quick founder replacement a flaw in typical venture thinking.
Hardware Investing Trends and Navigating Market Cycles 5333 Harry pushes Bijan on Spark's consumer strategy by invoking Fred Wilson's well-known consumer downturn thesis. Bijan respectfully reframes the market dynamic as a temporary lull between breakout cycles.
Growth Versus Revenue Dynamics in Venture Backed Startups 3322 Harry asks about the trade-off between growth and revenue. Bijan delivers a nuanced explanation distinguishing sustainable growth from inefficient spend and advises when startups should avoid taking VC.

Statements from this episode (15)

Opinion
Investing in post-bubble consumer tech was non-obvious in the mid-2000s
“The idea of backing entrepreneurs that were first-time entrepreneurs after the bubble burst in consumer, you know, right now it seems very obvious, but I can tell you at the time, it wasn't obvious.”
Bijan Sabet Jun 6, 2016 ▶ 4:33
Insight
First-time founders possess a unique audacity and fearlessness
“I think first time founders have a level of audacity that, you know, sometimes more experienced people don't have because they, they're just, there's no fear.”
Bijan Sabet Jun 6, 2016 ▶ 5:25
Insight
Founder vision and instincts matter more than academic pedigree
“And I also, I've just never bought into this kind of elitist way of thinking about like where you went to school You know, where you work, you know, whether you work at Google or, you know, Apple or something, it's more of, you know, what's your idea? What, wh…”
Bijan Sabet Jun 6, 2016 ▶ 5:54
Opinion
Google offers enormous utility but is not a fun product
“Google has enormous utility, but I don't think Google's was, is a fun product.”
Bijan Sabet Jun 6, 2016 ▶ 7:05
Assertion Supported
Twitter had under 250,000 daily active users when Spark Capital invested
“There was less than 250,000 daily active users.”
Bijan Sabet Jun 6, 2016 ▶ 7:57
Opinion
No other platform matches Twitter's viral retweet distribution model
“This is a very unique distribution platform where things like retweets and things like that can take a piece of content or information and spread it in a way that no other platform, you know, could do or at the time, certainly, and even today, I don't think ot…”
Bijan Sabet Jun 6, 2016 ▶ 9:46
Assertion Partly supported
Tumblr operated with just two employees for its first two years
“David Karp, you know, 19, he starts Tumblr, and him and another fellow named Marco Arment, you know, for two years, just two of them were working on it, and they had the ability just to focus on the product.”
Bijan Sabet Jun 6, 2016 ▶ 10:44
Opinion
David Karp became a great CEO after hiring Derek Godfrey
“David Karp's CEO chops went from good to great when he brought in Derek Godfrey to run engineering.”
Bijan Sabet Jun 6, 2016 ▶ 12:45
Insight
VCs wrongly expect first-time founders to be market-ready immediately
“I don't think anyone's market ready from the get go. I think it's a flawed assumption with VCs where they try to imagine that, that these first time founders or any founders are going to just figure it all out.”
Bijan Sabet Jun 6, 2016 ▶ 13:21
Disclosure
Spark Capital was the first investor in Oculus
“We're the first investor in Oculus”
Bijan Sabet Jun 6, 2016 ▶ 14:42
Prediction Not checkable as stated
A new breakout consumer mobile company will emerge in 2016 or 2017
“If history is a guide, you know, this year, next year, we're going to see a breakout in a brand new company.”
Bijan Sabet Jun 6, 2016 ▶ 17:15
Opinion
Facebook is more likely to acquire breakout products than build them
“There's a higher chance that there's a breakout that Facebook wants to buy than Facebook creates themselves.”
Bijan Sabet Jun 6, 2016 ▶ 17:58
Insight
Startups needing under $2M in deficit financing should not raise VC
“I think if your company needs probably, you know, less than a million or two million dollars of deficit financing to accomplish the mission, You know, you shouldn't raise venture capital for that.”
Bijan Sabet Jun 6, 2016 ▶ 19:08
Opinion
Bijan Sabet favors VR over AR as an investment sector
“Yes. I mean, yes. If I have to pick one, I pick VR over AR, but AR, AR is certainly interesting.”
Bijan Sabet Jun 6, 2016 ▶ 20:25
Disclosure
Bijan Sabet makes only one to two new investments annually
“I don't make a lot of investments. I make one to two new investments a year.”
Bijan Sabet Jun 6, 2016 ▶ 22:56
Made with StarZero

Turn any episode into a week of clips.

This entire site, over 1,200 episodes transcribed, diarized, checked and made playable, runs on the StarZero media pipeline. Drop in your own episode and the podcast clipper finds the moments worth sharing, cuts them, captions them, and reframes them for every feed.

Try the podcast clipper Learn more