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Jun 21, 2017 · 30m · 20vc

20VC: Elad Gil on Becoming One of Silicon Valleys Top Angels, Why Most People Get Market Sizing Wrong & Should VC Services Always Be Bundled Together?

Elad Gil · 21m spoken Harry Stebbings · 8m spoken
0:00 / 0:00

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In this episode of The 20 Minute VC, prominent operator and angel investor Elad Gil explores startup scaling, market-driven investment strategies, common market sizing mistakes, and the future structure of venture capital.

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 28.9% of the talking time here. How this is scored →

Harry as informed peer 3.0 Guest teaching 4.0 Guest disagreement 1.8 Harry pushing back 1.3
05100:0010:0020:0030:002:11–8:32 · Harry as informed peer 2/10 Elad Gil on Angel Investing, Stage Agnosticism, and Startup Scaling Harry opens with conversational questions about Elad's angel portfolio and asks how he helps CEOs scale from zero to one hundred employees, referencing Gary Tan. Elad explains his stage-agnostic philosophy and lightweight advisory approach, educating Harry on startup scaling dynamics in an agreeable manner.8:32–15:03 · Harry as informed peer 3/10 VC Value Add, Investor Management, and Price Sensitivity Harry brings in perspectives from other investors regarding VC value-add and price sensitivity. Elad provides a structured reframe categorizing VCs into three types and explains why price sensitivity differs sharply between seed and late-stage rounds.15:03–24:21 · Harry as informed peer 5/10 End of Tech Cycles, Pattern Recognition, and Market Sizing Harry demonstrates strong preparation by quoting Elad's writings on tech cycles, citing DFJ's Emily Melton on pattern recognition, and questioning non-tech company margins. Elad directly rejects Harry's premise that Snapchat created a new behavior, clarifying that software merely recasts existing offline human behavior.24:23–29:13 · Harry as informed peer 2/10 Quickfire Round: Productivity, VC Unbundling, and Career Lessons Harry leads a rapid-fire session covering productivity, books, and VC industry changes. Elad offers insightful perspectives on career productivity shifts and how traditional VC unnaturally bundles capital, governance, and advice.2:11–8:32 · Guest teaching 3/10 Elad Gil on Angel Investing, Stage Agnosticism, and Startup Scaling Harry opens with conversational questions about Elad's angel portfolio and asks how he helps CEOs scale from zero to one hundred employees, referencing Gary Tan. Elad explains his stage-agnostic philosophy and lightweight advisory approach, educating Harry on startup scaling dynamics in an agreeable manner.8:32–15:03 · Guest teaching 4/10 VC Value Add, Investor Management, and Price Sensitivity Harry brings in perspectives from other investors regarding VC value-add and price sensitivity. Elad provides a structured reframe categorizing VCs into three types and explains why price sensitivity differs sharply between seed and late-stage rounds.15:03–24:21 · Guest teaching 5/10 End of Tech Cycles, Pattern Recognition, and Market Sizing Harry demonstrates strong preparation by quoting Elad's writings on tech cycles, citing DFJ's Emily Melton on pattern recognition, and questioning non-tech company margins. Elad directly rejects Harry's premise that Snapchat created a new behavior, clarifying that software merely recasts existing offline human behavior.24:23–29:13 · Guest teaching 4/10 Quickfire Round: Productivity, VC Unbundling, and Career Lessons Harry leads a rapid-fire session covering productivity, books, and VC industry changes. Elad offers insightful perspectives on career productivity shifts and how traditional VC unnaturally bundles capital, governance, and advice.2:11–8:32 · Guest disagreement 1/10 Elad Gil on Angel Investing, Stage Agnosticism, and Startup Scaling Harry opens with conversational questions about Elad's angel portfolio and asks how he helps CEOs scale from zero to one hundred employees, referencing Gary Tan. Elad explains his stage-agnostic philosophy and lightweight advisory approach, educating Harry on startup scaling dynamics in an agreeable manner.8:32–15:03 · Guest disagreement 1/10 VC Value Add, Investor Management, and Price Sensitivity Harry brings in perspectives from other investors regarding VC value-add and price sensitivity. Elad provides a structured reframe categorizing VCs into three types and explains why price sensitivity differs sharply between seed and late-stage rounds.15:03–24:21 · Guest disagreement 4/10 End of Tech Cycles, Pattern Recognition, and Market Sizing Harry demonstrates strong preparation by quoting Elad's writings on tech cycles, citing DFJ's Emily Melton on pattern recognition, and questioning non-tech company margins. Elad directly rejects Harry's premise that Snapchat created a new behavior, clarifying that software merely recasts existing offline human behavior.24:23–29:13 · Guest disagreement 1/10 Quickfire Round: Productivity, VC Unbundling, and Career Lessons Harry leads a rapid-fire session covering productivity, books, and VC industry changes. Elad offers insightful perspectives on career productivity shifts and how traditional VC unnaturally bundles capital, governance, and advice.2:11–8:32 · Harry pushing back 1/10 Elad Gil on Angel Investing, Stage Agnosticism, and Startup Scaling Harry opens with conversational questions about Elad's angel portfolio and asks how he helps CEOs scale from zero to one hundred employees, referencing Gary Tan. Elad explains his stage-agnostic philosophy and lightweight advisory approach, educating Harry on startup scaling dynamics in an agreeable manner.8:32–15:03 · Harry pushing back 1/10 VC Value Add, Investor Management, and Price Sensitivity Harry brings in perspectives from other investors regarding VC value-add and price sensitivity. Elad provides a structured reframe categorizing VCs into three types and explains why price sensitivity differs sharply between seed and late-stage rounds.15:03–24:21 · Harry pushing back 3/10 End of Tech Cycles, Pattern Recognition, and Market Sizing Harry demonstrates strong preparation by quoting Elad's writings on tech cycles, citing DFJ's Emily Melton on pattern recognition, and questioning non-tech company margins. Elad directly rejects Harry's premise that Snapchat created a new behavior, clarifying that software merely recasts existing offline human behavior.24:23–29:13 · Harry pushing back 0/10 Quickfire Round: Productivity, VC Unbundling, and Career Lessons Harry leads a rapid-fire session covering productivity, books, and VC industry changes. Elad offers insightful perspectives on career productivity shifts and how traditional VC unnaturally bundles capital, governance, and advice.

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

0:00 · Harry 81.9% · guest 18.1%0:00 · Harry 81.9% · guest 18.1%3:00 · Harry 24.3% · guest 75.7%3:00 · Harry 24.3% · guest 75.7%6:00 · Harry 16.1% · guest 83.9%6:00 · Harry 16.1% · guest 83.9%9:00 · Harry 13.6% · guest 86.4%9:00 · Harry 13.6% · guest 86.4%12:00 · Harry 16.1% · guest 83.9%12:00 · Harry 16.1% · guest 83.9%15:00 · Harry 30.2% · guest 69.8%15:00 · Harry 30.2% · guest 69.8%18:00 · Harry 20.7% · guest 79.3%18:00 · Harry 20.7% · guest 79.3%21:00 · Harry 15.8% · guest 84.2%21:00 · Harry 15.8% · guest 84.2%24:00 · Harry 15.1% · guest 84.9%24:00 · Harry 15.1% · guest 84.9%27:00 · Harry 36.8% · guest 63.2%27:00 · Harry 36.8% · guest 63.2%30:00 · Harry 100% · guest 0%30:00 · Harry 100% · guest 0%
Sharpest disagreement ▶ 22:07 Rejecting Snapchat market creation premise

Elad explicitly disagrees with Harry's framing of Snapchat as a new market creator, arguing it simply digitizes existing offline human communication patterns.

 Hardest push from Harry ▶ 17:21 Challenging non-tech VC valuations

Harry presses Elad on investor excitement around commerce companies like The Honest Company, challenging whether non-software margin profiles pose a major risk to VCs.

 Biggest teaching moment ▶ 25:59 Career shift from saying yes to saying no

Elad details a key productivity paradox, explaining that early career growth stems from saying yes to all opportunities while long-term success requires aggressively saying no.

 Harry holds his own ▶ 18:28 Citing Emily Melton on pattern recognition danger

Harry demonstrates industry knowledge by bringing up DFJ partner Emily Melton's view that reliance on pattern recognition induces dangerous bias in venture decision-capital decision-decision-making.
the scores for every segment, with the reasoning behind each
ChapterTopicHarry as informed peerGuest teachingGuest disagreementHarry pushing backWhy
Elad Gil on Angel Investing, Stage Agnosticism, and Startup Scaling 2311 Harry opens with conversational questions about Elad's angel portfolio and asks how he helps CEOs scale from zero to one hundred employees, referencing Gary Tan. Elad explains his stage-agnostic philosophy and lightweight advisory approach, educating Harry on startup scaling dynamics in an agreeable manner.
VC Value Add, Investor Management, and Price Sensitivity 3411 Harry brings in perspectives from other investors regarding VC value-add and price sensitivity. Elad provides a structured reframe categorizing VCs into three types and explains why price sensitivity differs sharply between seed and late-stage rounds.
End of Tech Cycles, Pattern Recognition, and Market Sizing 5543 Harry demonstrates strong preparation by quoting Elad's writings on tech cycles, citing DFJ's Emily Melton on pattern recognition, and questioning non-tech company margins. Elad directly rejects Harry's premise that Snapchat created a new behavior, clarifying that software merely recasts existing offline human behavior.
Quickfire Round: Productivity, VC Unbundling, and Career Lessons 2410 Harry leads a rapid-fire session covering productivity, books, and VC industry changes. Elad offers insightful perspectives on career productivity shifts and how traditional VC unnaturally bundles capital, governance, and advice.

Statements from this episode (10)

Insight
Gil: Institutional VC funds are forced into rigid stage strategies
“I think many of the best investors I know are actually stage agnostic, but I think once you become a professionalized fund or firm, you're very much forced in many cases to choose, you know, what your sweet spot is or what your strategy is.”
Elad Gil Jun 21, 2017 ▶ 4:29
Insight
Gil: In a bad market, market dynamics beat a great team
“Many angels I know are very team driven, and I think the team is important, but I think a great team in a terrible market, the market tends to win.”
Elad Gil Jun 21, 2017 ▶ 4:40
Insight
Gil: Best Companies Always Look Expensive Initially and Cheap in Hindsight
“I think the best companies always look expensive at the time and cheap in hindsight.”
Elad Gil Jun 21, 2017 ▶ 13:29
Insight
Gil: Expecting a 5-10x return on a $1B valuation is highly improbable
“And so if you're investing at a billion and you're hoping for a five or 10 X, that's actually an extremely improbable event on average.”
Elad Gil Jun 21, 2017 ▶ 14:50
Prediction Not checkable as stated
Gil: VCs applying software metrics to food tech and biotech will burn
“I think the place where it ends poorly is where somebody applies and assumes software-related models to non-software areas, and they don't think about the margin structure, and they don't think about dealing with physical goods, and that's where I think a lot …”
Elad Gil Jun 21, 2017 ▶ 18:00
Disclosure
Gil: Invested in Stripe and Gusto because he needed them as founder
“So for example, a few years ago, I invested in a set of companies based solely on the fact that I would have used them at my first startup. I would have used Stripe for payments. I invested in Stripe. I would have used Mailgun for email, and so I invested in M…”
Elad Gil Jun 21, 2017 ▶ 21:12
Insight
Gil: Winning Startups Recast Existing Behaviors Rather Than Creating New Ones
“So I just think, like often the most compelling things are capturing behavior that already exists, and then revamping it in a new way, or capturing it in a new medium, versus creating entirely new behaviors. I actually think there's very few things that exist …”
Elad Gil Jun 21, 2017 ▶ 22:23
Insight
Gil: Career success requires shifting from saying yes to saying no
“Early in your career, the way to be successful in some sense is to say yes to everything, because a set of opportunities that you have are quite limited. And so any opportunity in some sense is an interesting opportunity. As you advance in your career, the fli…”
Elad Gil Jun 21, 2017 ▶ 25:50
Insight
Gil: Traditional venture capital unnaturally bundles capital, governance, and advice
“The traditional BC model bundles capital, governance, and advice, and the people who are great investors aren't necessarily good at governance or advice, or vice versa. People who are great advisors may not be great investors. They may not be able to identify …”
Elad Gil Jun 21, 2017 ▶ 27:05
Disclosure
Gil: Admits missing out on an early investment in Lyft
“I've clearly passed on that I should have invested in, like Lyft, right? So I missed Lyft”
Elad Gil Jun 21, 2017 ▶ 28:07
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