Jul 23, 2018 · 30m · 20vc
20VC: The Metrics That Matter In Early-Stage Consumer, Why Moats Matter More Than Brand Today and How VCs Deal with S*** Hit The Fan Moments with Jason Stoffer, Managing Partner @ Maveron
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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 Jason Stoffer, Managing Partner at Maveron, to discuss early-stage consumer investing, building structural business moats, and managing investor-founder relationships through market 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 30.5% of the talking time here. How this is scored →
Harry as informed peer 4.4 Guest teaching 4.1 Guest disagreement 2.1 Harry pushing back 2.9
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 7:41 Throwing out Series A decks focused on CAC/LTV
Jason directly rejects the thesis held by Harry's partner Fred regarding early-stage unit economics, bluntly stating he wants to throw out Series A decks focused on CAC and LTV metrics.
Hardest push from Harry ▶ 18:27 Pushing back on VC emotional restraintHarry challenges Jason's strategy of hiding stress from founders by contrasting it directly with Brad Feld's prominent model of radical VC transparency and emotional authenticity.
Biggest teaching moment ▶ 22:43 Venture as a game of extreme anomaliesWhen Harry questions whether median M&A exits generate true venture returns, Jason corrects the premise by explaining that venture capital is exclusively an outlier-driven game.
Harry holds his own ▶ 13:57 Citing Fenton and Bessemer on distribution bottlenecksHarry showcases deep industry domain expertise by synthesizing arguments from Peter Fenton, Eric Feng, and Jeremy Levine to press Jason on the viability of consumer investments.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Jason Stoffer's Career Journey and the Impact of the Dot-Com Crash | 2 | 2 | 0 | 0 | Jason outlines his career trajectory and key learnings from the dot-com crash regarding capital efficiency versus blunt-force capital deployment. Harry provides open-ended, supportive prompts without challenging the guest. | |
| Re-evaluating Moats, Brand Defensibility, and Early-Stage Metrics | 4 | 6 | 4 | 3 | Harry introduces his partner Fred's thesis on early unit economics as a moat. Jason directly disagrees, stating he wants to throw out Series A decks focused on CAC and LTV, emphasizing community and high repeat instead. | |
| Building Structural Defensibility: Lessons from Zulily and General Assembly | 3 | 5 | 1 | 1 | Jason educates the host on creating defensibility through supplier power dynamics using Zulily and enterprise shifts using General Assembly. Harry facilitates the discussion with targeted follow-ups on top-line growth. | |
| The Shift Towards Operationally Complex Consumer Businesses | 7 | 4 | 2 | 4 | Harry demonstrates strong industry knowledge by citing Peter Fenton, Eric Feng, and Jeremy Levine regarding the severe distribution challenges in consumer tech. Jason responds by detailing Maveron's pivot into operationally complex, offline-touching businesses. | |
| The Psychological Realities of VC and Managing Founder Relationships | 6 | 4 | 2 | 6 | Harry directly pushes back against Jason's philosophy of hiding anxiety from founders, contrasting it with Brad Feld's emphasis on radical transparency. Jason defends his deliberate approach to board-level communication. | |
| Macro Trends, Acquisition Dynamics, and Valuation Multiples | 6 | 5 | 5 | 5 | Harry offers specific financial pushback regarding fund returns on modest consumer M&A exits like Bonobos. Jason shuts down the premise, asserting that venture capital is entirely driven by extreme anomalies like Chewy. | |
| Quick Fire Round: Amazon Threats, Physical Stores, and Imperfect Foods | 3 | 3 | 1 | 1 | In a rapid-fire sequence, Jason offers sharp takes on Amazon's aggressive expansion, physical retail strategies, and Maveron's unannounced investments like Imperfect Foods. Harry keeps the pacing fast with minimal pushback. |
Statements from this episode (17)
Jason Stoffer prefers startups serving Middle America over the top 1%
“I also have a deep affinity for companies that target middle America versus companies that are focused on the one percent.”
More capital is usually not the solution to startup problems
“I think the dot-com crash in many ways informed my point of view that more capital is usually not the solution to problems.”
Series A pitch decks focusing on CAC and LTV should be rejected
“I actually disagree with Fred. I think if CAC and LTV is a focus on a series A deck, I essentially just want to throw the deck out.”
Millennial music festival attendance doubled between 2014 and 2018
“When we looked at it, we saw that almost 30% of millennials attended a music festival in the past 12 months compared to half of that in 2014.”
Maveron's best startups rely on repeat customers, not paid acquisition
“If there's a unique characteristic across the most successful portfolio companies we have, it's high repeat and a lack of dependence upon paid acquisition for a significant piece of your revenue.”
Coding bootcamps suffer from non-repeat purchases and high search acquisition costs
“The problem with coding bootcamps is it's a one-time purchase. It's not repeated. Customers often search for it in Google, and even if you have the best product, it's hard to make that readily apparent in the consumer's minds.”
Facebook ads easily scale brands to $50M, but rarely to $500M
“It's very easy these days to Scale a brand from zero to fifty million by using hyper-targeting on Facebook. It's very hard to take a brand from fifty million to five hundred million in an enduring way, and to create billions in equity value.”
Zulily grew from zero to $1B revenue in five years
“So I was lucky enough to be on the board of Zulily. It went zero to a billion in revenue in five years.”
VCs must not let personal stress affect founder communications
“Everything you say to an entrepreneur you work with has to have intent. You can't let your stress, what's in your head, or your mood impact them.”
Most VCs are mediocre and overall VC returns are poor
“The vast majority of VCs are mediocre. That's why the asset class generally is poor, and the top funds generally perform quite well.”
Sudden CAC spikes force online brands to sell to offline incumbents
“CAC doesn't gradually go from 20 to 25 to 30. It goes from 21 day to 80 the next, and I think in many cases where you've created a online category leader, the best solution really is to sell it to a offline previous category leader that's looking to maintain t…”
Chewy is the model consumer venture exit, not Bonobos
“I look at Chewy's as what Wright looks like, not Bonobo's, right?”
Physical product brands represent only 25% of Maveron's portfolio
“Physical product companies might be a quarter of what we do.”
Professional managers cannot execute strategic pivots; the CEO must lead
“You can't hire professional managers to really change the focus of a business. My biggest lesson was when you have an incredibly important strategic initiative, the CEO needs to clear everything off their plate and make it happen.”
Every Maveron portfolio Series B faces questions about Amazon
“Every single Series B that our portfolio companies raise, the question raised is, what's Amazon going to do?”