Jun 28, 2017 · 27m · 20vc
20VC: Bessemer's Ethan Kurzweil on How To View Pattern Recognition and Deal With The Anti-Portfolio, The Next Frontier In Developer Focussed Businesses & Why eSports Is Interesting Again
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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 Ethan Kurzweil, Partner at Bessemer Venture Partners, discussing the evolution of developer platforms, frameworks for pattern recognition in emerging markets, and strategic lessons learned from Bessemer's famous anti-portfolio.
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 31.5% of the talking time here. How this is scored →
Harry as informed peer 4.1 Guest teaching 3.1 Guest disagreement 1.7 Harry pushing back 3.0
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 9:38 Ethan Rejects Go-to-Market Shift Premise
Ethan directly rejects the proposition introduced by Harry via Tom Tunguz, arguing that new technology does not require fundamental go-to-market changes and using SendGrid as proof.
Hardest push from Harry ▶ 9:22 Harry Probes with Contrarian Machine Learning ThesisHarry active pushes Ethan by citing a contrasting thesis from Redpoint partner Tom Tunguz on machine learning go-to-market strategies rather than accepting Ethan's initial outline.
Biggest teaching moment ▶ 7:15 Reframing TAM vs Capital DecentralizationEthan corrects Harry's assumption that developer tools expand overall TAM, educating him on how these platforms instead decentralize purchasing power and increase efficiency.
Harry holds his own ▶ 10:20 Referencing Mark Twain Tweet to Challenge FrameworksHarry showcases deep host preparation by quoting Ethan's specific tweet on Mark Twain and history rhyming to press Ethan on how Bessemer evaluates brand new market creation.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Welcome and Opening Banter | 2 | 1 | 1 | 1 | The opening segment consists of light rapport and origin storytelling regarding Ethan's transition into venture capital at Bessemer. The conversation is warm and conversational with minimal friction or technical grilling. | |
| Entrepreneurial Psychology and Evaluating Founders | 4 | 5 | 2 | 3 | Harry asks an insightful question regarding whether developer platform adoption increases overall TAM or merely redistributes capital. Ethan gently reframes the question, explaining that TAM remains steady while efficiency increases and decision-making decentralizes. | |
| The Next Frontier for Developer Platforms | 6 | 4 | 4 | 5 | Harry uses an expert perspective from Tom Tunguz to challenge Ethan's views on machine learning enterprise adoption. Ethan explicitly disagrees with the premise, citing SendGrid to demonstrate that go-to-market strategies do not always need fundamental overhauls. | |
| Evaluating Pattern Recognition and Market Creation | 5 | 3 | 1 | 2 | Harry demonstrates strong preparation by citing Ethan's social media quote regarding Mark Twain and pattern recognition. Ethan appreciatively details how Bessemer balances historical frameworks with de novo market creation analysis. | |
| The Evolution and Investment Landscape of Esports | 4 | 4 | 2 | 3 | Harry probes the esports landscape, asking whether value lies in team brands or core platforms, and brings up potential regulatory hurdles. Ethan clarifies that the primary challenge is business development and norm-setting rather than governmental regulation. | |
| The Anti-Portfolio and Lessons from Missed Opportunities | 5 | 3 | 1 | 6 | When Ethan gives a general answer about the anti-portfolio, Harry pushes back and explicitly demands a specific, difficult example of a missed deal that served as an inflection point. Ethan responds openly with details about missing Yammer and Dollar Shave Club. | |
| Quickfire Round: Books, Blockchain, Optimism, and Periscope Data | 3 | 2 | 1 | 1 | A standard fast-paced quickfire round where Ethan shares insights on ICOs pre-selling API access, general optimism about society, and his investment in Periscope Data. Dynamic remains collaborative and swift throughout. |
Statements from this episode (10)
David Cowan Called Kurzweil's Startup Pitch the Worst Idea He'd Ever Heard
“And he told me it was the worst fucking idea he'd ever heard in his life and that I should not pursue that at all.”
Kurzweil: Accelerators Reduce Early Founder Screening Without Making Scaling Easier
“Being an entrepreneur has become sort of trendy in recent years, as I'm sure you're aware, and it's not for everyone. And so there, there's less of a natural screening process. It just comes with the leap now because there's so many accelerators and things tha…”
Kurzweil: Efficient Developer Tools May Actually Shrink Total Software TAM
“So I think if anything, these products are more efficient. There's less waste. And so if anything, you may see actually a shrinking of TAM.”
Kurzweil: Next Developer Platforms Will Tackle AI and Deep Learning
“I think the next frontier is to take the deeper technical challenges, the data science, the artificial intelligence, which is, I know, a very hot buzzword these days, but the, you know, the practical applications of it are going to be real, as well as neural n…”
Kurzweil: Machine Learning Does Not Mandate Fundamental GTM Strategy Shifts
“I'm not sure I agree with that. I think new technologies open up new means of go to markets, but also they make existing ones more efficient.”
Kurzweil: Direct Pattern Matching in VC Creates Investment Traps
“A lot of people do look for the exact repetition of history, and they'll look for the pattern recognition of this type of founder, this type of company, and just applying it to some other area, and I'd say, you know, it's very tempting to do that, and I think …”
Kurzweil: Most Esports Equity Value Will Lie in Enabling Technology
“As far as a VC, interpreting the question is sort of where do we think the most equity value will be where will the biggest companies be formed? I think it is around the technology around enabling esports to become on par with traditional sports, and so all th…”
Bessemer Passed on Yammer by Overfocusing on Technical Buyers
“Well, one early on in my career was a company called Yammer that we missed. You know, I had a number of opportunities to invest, and I think the reason we missed is we were very focused in those days, the developer platform, on selling a sort of API-like servi…”
Bessemer Passed on Dollar Shave Club by Overanalyzing Unit Economics
“It was Dollar Shave Club meeting meeting Michael, the founder there very early on, and just, I was always very, he was just an impressive guy. You could see it in his videos. You can see it in his personality. This is someone that'll just will this thing to su…”
Kurzweil: Pre-Sold ICO Demand Is a Better Success Indicator Than VCs
“I'm one of the ones that think it might, and I think the way it disrupts our business is it allows folks to transact directly with the buyer of their product before they have said product. So, In a block in, in these ICOs that we're seeing now, you can put out…”