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Jan 9, 2017 · 25m · 20vc

20VC: DFJ's Josh Stein on Why VCs Must Adapt To Their Founders, The Major Transition Points For Aaron Levie @ Box & Why SaaS Startups Are Growing At A Rate Never Seen Before

Josh Stein · 15m spoken Harry Stebbings · 8m spoken
0:00 / 0:00

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In this episode of The 20 Minute VC, host Harry Stebbings interviews DFJ Partner Josh Stein to discuss the evolution of founder-VC relationships, pivotal growth moments at Box, and the structural drivers accelerating modern SaaS 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 34.5% of the talking time here. How this is scored →

Harry as informed peer 3.0 Guest teaching 2.4 Guest disagreement 0.6 Harry pushing back 1.4
05100:0010:0020:002:41–5:20 · Harry as informed peer 2/10 Josh Stein's Background and Decision to Join DFJ Harry introduces Josh and asks about his transition into venture capital. Josh welcomes Harry to the VC world and explains his journey from startup founder to DFJ partner in a friendly, low-friction exchange.5:20–9:38 · Harry as informed peer 3/10 Building Successful Founder-VC Relationships and Adaptability Harry asks how VCs handle founders who ignore advice, using the word disabeyance. Josh gently reframes the premise, explaining that VCs do not give orders and must back the decision-maker once a choice is made.9:38–15:48 · Harry as informed peer 3/10 Early Days at Box and Pivotal Moments for Aaron Levie Harry integrates crowd-sourced questions from ecosystem peers regarding Aaron Levie's evolution and Box's TAM expansion. Josh provides detailed insights on Box's enterprise pivot and market potential.15:48–21:11 · Harry as informed peer 5/10 Modern SaaS Dynamics, Market Growth, and Moats Harry challenges Josh on whether modern SaaS investing is just spreadsheet metrics rather than art, and probes TAM methodologies. Josh responds by outlining workflow moats and praising Harry's nuance.21:11–23:13 · Harry as informed peer 2/10 Quick Fire Round with Josh Stein Harry runs a rapid quick-fire round on books, leadership inspirations, and LaunchDarkly. The dynamic is brisk, lighthearted, and highly agreeable.2:41–5:20 · Guest teaching 1/10 Josh Stein's Background and Decision to Join DFJ Harry introduces Josh and asks about his transition into venture capital. Josh welcomes Harry to the VC world and explains his journey from startup founder to DFJ partner in a friendly, low-friction exchange.5:20–9:38 · Guest teaching 4/10 Building Successful Founder-VC Relationships and Adaptability Harry asks how VCs handle founders who ignore advice, using the word disabeyance. Josh gently reframes the premise, explaining that VCs do not give orders and must back the decision-maker once a choice is made.9:38–15:48 · Guest teaching 3/10 Early Days at Box and Pivotal Moments for Aaron Levie Harry integrates crowd-sourced questions from ecosystem peers regarding Aaron Levie's evolution and Box's TAM expansion. Josh provides detailed insights on Box's enterprise pivot and market potential.15:48–21:11 · Guest teaching 3/10 Modern SaaS Dynamics, Market Growth, and Moats Harry challenges Josh on whether modern SaaS investing is just spreadsheet metrics rather than art, and probes TAM methodologies. Josh responds by outlining workflow moats and praising Harry's nuance.21:11–23:13 · Guest teaching 1/10 Quick Fire Round with Josh Stein Harry runs a rapid quick-fire round on books, leadership inspirations, and LaunchDarkly. The dynamic is brisk, lighthearted, and highly agreeable.2:41–5:20 · Guest disagreement 0/10 Josh Stein's Background and Decision to Join DFJ Harry introduces Josh and asks about his transition into venture capital. Josh welcomes Harry to the VC world and explains his journey from startup founder to DFJ partner in a friendly, low-friction exchange.5:20–9:38 · Guest disagreement 2/10 Building Successful Founder-VC Relationships and Adaptability Harry asks how VCs handle founders who ignore advice, using the word disabeyance. Josh gently reframes the premise, explaining that VCs do not give orders and must back the decision-maker once a choice is made.9:38–15:48 · Guest disagreement 0/10 Early Days at Box and Pivotal Moments for Aaron Levie Harry integrates crowd-sourced questions from ecosystem peers regarding Aaron Levie's evolution and Box's TAM expansion. Josh provides detailed insights on Box's enterprise pivot and market potential.15:48–21:11 · Guest disagreement 1/10 Modern SaaS Dynamics, Market Growth, and Moats Harry challenges Josh on whether modern SaaS investing is just spreadsheet metrics rather than art, and probes TAM methodologies. Josh responds by outlining workflow moats and praising Harry's nuance.21:11–23:13 · Guest disagreement 0/10 Quick Fire Round with Josh Stein Harry runs a rapid quick-fire round on books, leadership inspirations, and LaunchDarkly. The dynamic is brisk, lighthearted, and highly agreeable.2:41–5:20 · Harry pushing back 0/10 Josh Stein's Background and Decision to Join DFJ Harry introduces Josh and asks about his transition into venture capital. Josh welcomes Harry to the VC world and explains his journey from startup founder to DFJ partner in a friendly, low-friction exchange.5:20–9:38 · Harry pushing back 2/10 Building Successful Founder-VC Relationships and Adaptability Harry asks how VCs handle founders who ignore advice, using the word disabeyance. Josh gently reframes the premise, explaining that VCs do not give orders and must back the decision-maker once a choice is made.9:38–15:48 · Harry pushing back 1/10 Early Days at Box and Pivotal Moments for Aaron Levie Harry integrates crowd-sourced questions from ecosystem peers regarding Aaron Levie's evolution and Box's TAM expansion. Josh provides detailed insights on Box's enterprise pivot and market potential.15:48–21:11 · Harry pushing back 4/10 Modern SaaS Dynamics, Market Growth, and Moats Harry challenges Josh on whether modern SaaS investing is just spreadsheet metrics rather than art, and probes TAM methodologies. Josh responds by outlining workflow moats and praising Harry's nuance.21:11–23:13 · Harry pushing back 0/10 Quick Fire Round with Josh Stein Harry runs a rapid quick-fire round on books, leadership inspirations, and LaunchDarkly. The dynamic is brisk, lighthearted, and highly agreeable.

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

0:00 · Harry 97.3% · guest 2.7%0:00 · Harry 97.3% · guest 2.7%3:00 · Harry 20.8% · guest 79.2%3:00 · Harry 20.8% · guest 79.2%6:00 · Harry 16.7% · guest 83.3%6:00 · Harry 16.7% · guest 83.3%9:00 · Harry 19.9% · guest 80.1%9:00 · Harry 19.9% · guest 80.1%12:00 · Harry 10.6% · guest 89.4%12:00 · Harry 10.6% · guest 89.4%15:00 · Harry 10.4% · guest 89.6%15:00 · Harry 10.4% · guest 89.6%18:00 · Harry 26.6% · guest 73.4%18:00 · Harry 26.6% · guest 73.4%21:00 · Harry 48.5% · guest 51.5%21:00 · Harry 48.5% · guest 51.5%24:00 · Harry 100% · guest 0%24:00 · Harry 100% · guest 0%
Sharpest disagreement ▶ 8:43 Rejection of VC order-giving framing

Josh explicitly pushes back against Harry's characterization of a founder ignoring advice as 'disabeyance', clarifying that VCs do not give orders to CEOs.

 Hardest push from Harry ▶ 18:05 Challenging SaaS as spreadsheet investing

Harry directly challenges the prevalent SaaS investment narrative by asking if the field has devolved into pure spreadsheet tracking rather than qualitative venture art.

 Biggest teaching moment ▶ 8:43 Reframing VC-founder hierarchy

Josh educates Harry on board dynamics, explaining that VCs must support the CEO's ultimate choice without second-guessing rather than expecting obedience.

 Harry holds his own ▶ 20:13 Probing market sizing methodologies

Harry demonstrates strong industry insight by questioning top-down versus bottom-up TAM analysis, drawing praise from Josh who notes that Harry 'nailed the art of VC'.
the scores for every segment, with the reasoning behind each
ChapterTopicHarry as informed peerGuest teachingGuest disagreementHarry pushing backWhy
Josh Stein's Background and Decision to Join DFJ 2100 Harry introduces Josh and asks about his transition into venture capital. Josh welcomes Harry to the VC world and explains his journey from startup founder to DFJ partner in a friendly, low-friction exchange.
Building Successful Founder-VC Relationships and Adaptability 3422 Harry asks how VCs handle founders who ignore advice, using the word disabeyance. Josh gently reframes the premise, explaining that VCs do not give orders and must back the decision-maker once a choice is made.
Early Days at Box and Pivotal Moments for Aaron Levie 3301 Harry integrates crowd-sourced questions from ecosystem peers regarding Aaron Levie's evolution and Box's TAM expansion. Josh provides detailed insights on Box's enterprise pivot and market potential.
Modern SaaS Dynamics, Market Growth, and Moats 5314 Harry challenges Josh on whether modern SaaS investing is just spreadsheet metrics rather than art, and probes TAM methodologies. Josh responds by outlining workflow moats and praising Harry's nuance.
Quick Fire Round with Josh Stein 2100 Harry runs a rapid quick-fire round on books, leadership inspirations, and LaunchDarkly. The dynamic is brisk, lighthearted, and highly agreeable.

Statements from this episode (5)

Assertion Not checkable as stated
DFJ replaces portfolio CEOs primarily for failing to learn from mistakes
“The number one reason where we do occasionally say, Hey, this is not the right leader for the company is when you see someone who's not able to learn from their mistakes, right. And adapt to them.”
Josh Stein Jan 9, 2017 ▶ 9:25
Insight
Founders must be forceful and willing to annoy people to succeed
“Hey, if you're not annoying people, you're not doing enough as an entrepreneur. I mean, you know, it's not a place for shrinking violence. Like you need to be forceful to get ahead.”
Josh Stein Jan 9, 2017 ▶ 11:09
Assertion Supported
Box's post-2008 revenue ramped from $5M to $125M
“They went rough revenue ramp was five, 10, 25, 55, one, 25, and so just, you know, exploding out of the gate on the heels of that.”
Josh Stein Jan 9, 2017 ▶ 14:10
Assertion Supported
SaaS startups now reach $1M ARR on just $1M to $2M capital
“A typical, back in my day, to get to a million dollars of ARR, you might have spent 10 or twenty million dollars. Now, companies are getting there on a million or two million dollars more typically.”
Josh Stein Jan 9, 2017 ▶ 17:54
Opinion
Salesforce could double its prices without losing many customers
“Salesforce could double their prices. I don't think they would lose many customers.”
Josh Stein Jan 9, 2017 ▶ 20:09
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