Oct 1, 2018 · 31m · 20vc
20VC: USV's Rebecca Kaden on Whether Venture Returns Can Be Made At Scale In Consumer Today & How To Navigate Consumer Investing In A World of Amazon
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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 Rebecca Kaden, General Partner at Union Square Ventures, about the evolving landscape of consumer investing, sustainable customer acquisition strategies, competing against Amazon, and her journey from journalism into thesis-driven 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 35.2% of the talking time here. How this is scored →
Harry as informed peer 4.1 Guest teaching 3.4 Guest disagreement 1.9 Harry pushing back 2.3
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 26:41 Rejection of NY VC conviction premise
When Harry asserts that New York lacks conviction-based early-stage investors, Rebecca immediately and flatly disagrees, citing her own firm's partners as direct counter-evidence.
Hardest push from Harry ▶ 14:44 Host proposing three-year buffer window against AmazonHarry pushes his own hypothesis that non-priority startups enjoy a several-year buffer window before facing Amazon competition, challenging Rebecca to validate his view.
Biggest teaching moment ▶ 14:58 Correcting time horizons in modern tech cyclesRebecca breaks down why Harry's three-year buffer assumption is flawed, explaining that three years represents infinity in current tech innovation cycles.
Harry holds his own ▶ 9:25 Challenging fintech CAC and distribution against incumbentsHarry demonstrates strong market understanding by pressing Rebecca on unfeasible customer acquisition costs in consumer fintech when competing against massive incumbents.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Rebecca Kaden's Path to Venture Capital | 2 | 1 | 0 | 0 | Harry asks a standard introductory biographical question regarding Rebecca's career path into venture capital. The exchange is warm and supportive, with Harry interjecting to praise Bill Campbell's talent-spotting abilities. | |
| Evaluating the State of Consumer Investing | 5 | 4 | 3 | 3 | Harry demonstrates industry expertise by quoting notable VCs Jeremy Levine and Peter Fenton regarding a potential consumer venture downturn. Rebecca responds by reframing the premise, distinguishing platform shifts from tech-enabled modernization of legacy consumer industries. | |
| Customer Acquisition, Unit Economics, and Moats | 6 | 3 | 1 | 5 | Harry pushes on unit economics and customer acquisition costs in fintech, citing Founders Fund partner Brian Singerman's views on regulatory moats. Rebecca agrees with the CAC risks and highlights USV's reliance on organic community-driven acquisition over paid channels. | |
| Common Drivers of Standout Consumer Brands | 3 | 3 | 0 | 0 | Harry asks about common traits among breakout consumer brands. Rebecca outlines how emotional connection and organic fan engagement differentiate successful startups like Everlane and Stash, with complete alignment between host and guest. | |
| Investing and Competing in an Amazon-Dominated Market | 5 | 5 | 4 | 4 | Harry suggests that startups have a multi-year window if they are not a top-three priority for Amazon. Rebecca directly refutes this timeline assumption, stating that three years is infinity in tech cycles and explaining where Amazon cannot replicate emotional shopping experiences. | |
| Consumer Venture Returns at Scale & Market Dynamics | 4 | 4 | 2 | 2 | Harry brings up high-profile direct-to-consumer acquisitions like Bonobos and Dollar Shave Club to question venture return potential at scale. Rebecca explains why outcomes diverged based on acquisition efficiency and outlines current market fragmentation dynamics. | |
| Transitioning to USV and Thesis-Driven Investing | 2 | 3 | 0 | 0 | Harry asks about operational and cultural differences between Maveron and Union Square Ventures. Rebecca details USV's thesis-driven investment framework in a collaborative tone. | |
| Consumer Participation in Blockchain and Crypto | 5 | 4 | 2 | 3 | Harry cites Electric Capital partner Avichal Garg to probe regulatory dynamics in crypto. Rebecca clarifies the distinction between investing in crypto tokens and backing early-stage blockchain companies, warning of regulatory risks. | |
| Quick Fire Round: Retail Trends, NY VC, and Modern Fertility | 5 | 4 | 5 | 4 | Harry poses rapid-fire prompts citing Lightspeed's Alex Taussig and provocatively claims that New York lacks early-stage conviction VCs. Rebecca flatly rejects the premise regarding NY VCs, highlighting her USV partners and other local firms. |
Statements from this episode (18)
Kaden: Peter Fenton and Jeremy Levine are top consumer investors
“Look, I think Peter Fenton and Jeremy Levine are probably two of the best consumer investors of all time, and I, you know, I take everything they say, I read up on and take to heart, and I don't think they're wrong.”
Kaden: Voice and VR remain far from consumer adoption tipping points
“There are new platforms if you think about something like voice or VR, but we're pretty far from those consumer adoption tipping points, or so it seems.”
Kaden: Paid ads on Google and Facebook enrich platforms, not startups
“I, you know, I think Peter Fenton's also making a comment on the acquisition landscape where most of paid acquisition is coming through these third party platforms like Facebook or Google, where you're actually largely boosting the equity value of the platform…”
Kaden: Massive new consumer brands will emerge in legacy industries
“They're super hard, but there's a lot to be done there, and I think we are seeing and will continue to see massive new consumer brands emerge.”
Kaden: Startups dependent on continuous paid acquisition are poor VC investments
“We don't believe that businesses that are going to pay to acquire customer after customer are great venture businesses. They require way too much capital, and you don't get enough leverage on those dollars.”
Kaden: Referral and retention are the earliest signs of customer love
“And often the earliest indication of that is referral and retention, because when we love something, what we do is we come back and we tell our friends”
Kaden: Everlane succeeds because shopping there functions as an identity statement
“One thing that I always say about Everlane is that it's become an identifier for a customer. A customer that says, I shop at Everlane, thinks that they're saying something about themselves, not only about what they wear, and I think that's really powerful.”
Kaden: USV will not invest in startups competing directly with Amazon
“So the short answer is I don't want to invest In companies that think they're going to take down Amazon right now, because I believe it's extremely difficult, particularly at the stage we're going at.”
Kaden: Amazon dominates functional shopping but leaves room for emotional discovery
“My view is that Amazon is dominating, but it's a specific tactical and emotional piece of the commerce puzzle, and it's largely functional. They're the best at logistics. They're the best at assortment. They're the best at speed. They're somewhat the best at v…”
Kaden: Dollar Shave Club yielded strong venture returns, Bonobos did not
“The examples you gave of Dollar Shave and Bonobos have wildly different outcomes. One of them was a huge win for their investors and their team and kind of showed that you can get the return on it that they wanted going in, which is Dollar Shave, and the other…”
Kaden: Maveron's Allbirds investment scaled with high capital efficiency
“There are companies that are scaling even in direct-to-consumer brands, and they're scaling with capital efficiency, you know, invested in Allbirds at Maveron. It's going really well, and they're extremely capital efficient, and customers love it, and they com…”
Kaden: Investing relying on incumbent acquirers is unpredictable and risky
“I do think there's a continued appetite among the incumbents to buy their way into innovation and the millennial mindset and these new brands, but I think it's very hard to set out as an investor or as an entrepreneur with that intent. I think it's unpredictab…”
Kaden: Direct-to-consumer brand fragmentation is temporary and will consolidate
“I actually think we're right now in a moment of fragmentation where it's just easier than ever to start standalone brands because the channels to speak directly to customers as well as to create a supply chain, manage logistics, build your platform are easier …”
Kaden: USV and Maveron intentionally resist the trend of fund size inflation
“So both Maveron and USV have similarly sized Funds by Design. Both firms believe in relatively small funds, a very focused approach to kind of series seed and series A investing, and resisting this macro environment of raising massive amounts of capital as oth…”
Kaden: USV Requires All Startup Investments to Align With Firm Thesis
“Obviously one thing that's different about USB is we have a real thesis driven approach. So we believe in a model of kind of collectively coming up with a sense of where we think the opportunity lies and where we think the shifts are happening and really placi…”
Kaden: Internet and blockchain investing require fundamentally different approaches
“You can't approach the internet investing landscape and the blockchain investing landscape in the same way because they're two extremely different profiles of markets and timelines, and we think that has a lot of risk involved.”