Jun 29, 2016 · 31m · 20vc
20VC: Felicis' Wesley Chan on The Rise of IoT, Getting Recruited by Larry Page & Creating Google's Biggest Success Disaster
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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 Felicis Ventures Managing Director Wesley Chan about his transition from Google product pioneer to venture investor, his investment philosophy around technology democratization, and key design principles for winning consumer IoT products.
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 21.3% of the talking time here. How this is scored →
Harry as informed peer 1.6 Guest teaching 2.4 Guest disagreement 0.4 Harry pushing back 1.0
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 16:16 Reframe on market sizing
Wesley counters Harry's suggestion about starting with niche markets, arguing that restricting products to experts ignores a 100x larger market opportunity.
Hardest push from Harry ▶ 15:55 Niche vs broad target market challengeHarry explicitly challenges Wesley's philosophy of targeting everyone, citing conventional wisdom that startups should focus on narrow niches.
Biggest teaching moment ▶ 16:16 Democratization expanding market dynamicsWesley explains how removing complexity transforms expert tools into mass-market products using Adobe vs Canva and Omniture vs Google Analytics.
Harry holds his own ▶ 15:55 Challenging broad market positioningHarry demonstrates venture knowledge by pressing Wesley on the risks of ignoring segmented market focus in favor of going broad.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Wesley Chan's Career Path from Google to Felicis Ventures | 1 | 2 | 0 | 0 | Harry asks a standard introductory question about Wesley's transition from Google to Felicis. Wesley responds with a lengthy narrative about his history at Google, building a smart home, and being recruited by Aydin Senkut. | |
| Lessons from Google and Navigating Internal Skepticism | 1 | 3 | 1 | 0 | Harry asks for Wesley's key takeaways from working at Google and Google Ventures. Wesley explains the importance of pushing through internal skepticism and seeking discomfort every three years. | |
| Investing in Nest and What Makes Great IoT Products | 1 | 2 | 0 | 0 | Harry prompts Wesley to discuss investing in Nest and what makes a great IoT product. Wesley shares how Tony Fadell's vision and product design made thermostats delightful and smart. | |
| The Democratization of Technology and Felicis's Canva Investment | 4 | 4 | 2 | 5 | Harry pushes back on Wesley's framework of building products for 'everyone', pointing out that classic strategy dictates focusing on specific niches first. Wesley acknowledges the challenge but explains how democratizing tech expands market size exponentially. | |
| The Launch of Google Analytics and a 'Success Disaster' | 1 | 2 | 0 | 1 | Wesley shares the story of launching Google Analytics and inadvertently crashing Google's server infrastructure, leading Eric Schmidt to label it a 'success disaster'. Harry passively listens as Wesley details the resolution. | |
| The State of Smart Home Interfaces and the Success of Ring.com | 1 | 2 | 0 | 0 | Harry asks about the state of smart home interfaces. Wesley discusses the friction of dealer-installed systems and highlights Ring.com's simplicity as an exemplary solution. | |
| Quick Fire Round: Books, Lessons, and Investment Philosophies | 2 | 2 | 0 | 1 | Harry guides Wesley through a quick-fire round covering books, lessons from Larry Page, and investment criteria. Wesley provides brief, reflective answers without pushback or friction. |
Statements from this episode (13)
Google Ventures grew to a $500M annual fund with 300 investments
“And today they've done over 300 investments and it's grown to be a five hundred million dollar a year fund.”
Venture capital and tech investing reset on three-year macro cycles
“Venture and technology, investing, things change. It's a lifetime every three years that, you know, the world sort of changes again.”
Force career growth by seeking uncomfortable learning environments every three years
“So I think that that's sort of been the thing that informed my thinking is that every three years, I like to be super uncomfortable and figure out the next phases.”
Nest thermostats became a standard feature in high-end real estate listings
“Today Nest is sort of the de facto device that you have in your house if you build a, you know, high-end home, right? They advertise it in the home real estate listings that they have a Nest thermostat in it.”
Accessible software tools yield vastly more powerful outcomes than expert-only tools
“If you build something that everyone can use versus only the most skilled people can use, you get a very, very powerful outcome.”
Felicis Ventures wrote its largest single investment check ever to Canva
“One of the biggest investments, in fact, the largest check that Felicis has ever written was into a company in Australia called Canva.”
Democratizing expert software increases a company's total addressable market by 100x
“And by the way, it also increases your market by an order of a hundred extra more, right? You know, we're You know, Adobe's building Photoshop for probably hundreds of thousands of people who want to, who are skilled or want to make design their profession, an…”
Google Analytics' launch exhausted server capacity and slowed down Google's infrastructure
“So we had literally crashed Google, and we had slowed Google down and sort of broken Google by launching Google Analytics.”
Canva's phenomenal user growth mirrors Google Analytics' mass-market expansion playbook
“And that's what, you know, I think that's what Cliff and Melanie at Clamba have done. It's absolutely amazing. If you look at their user base, if you look at the forums, if you look at their incredible growth, Over the, even the past year has been nothing shor…”
Ring will generate hundreds of millions in revenue in 2016
“He's, you know, going to do, you know, hundreds of millions of dollars of revenue, if not more this year.”
Exceptional founders focus on removing unnecessary features rather than adding them
“It takes a very, very rare, very smart, very, very sophisticated founder to really start thinking about what should I take out rather than what should I put in.”
Fitbit became a massive fund returner despite widespread investor skepticism
“With Fitbit, when I didn't bet on Fitbit, everybody else was looking at connected devices or looking at hardware and going, you can't make money on hardware. And I didn't, You know, sort of wrote a check into it and became one of the biggest, you know, sort of…”
Teenage messaging and emoji apps are silly, fleeting investments without durability
“A lot of folks are investing in something that I find kind of silly. Oh, I'm building apps for teenagers to talk with each other, or I'm building an app for people to sort of like you know, send emojis to people. I don't understand those markets. You know, the…”