Nov 19, 2018 · 35m · 20vc
20VC: Investing Lessons From Observing Doug Leone and Bill Gurley, Why It Is Easier To Be Contrarian As A VC Than As An Angel & What It Takes To Run Tinder's Product and Revenue Alongside A Seed Fund with Jeff Morris Jr, Founder @ Chapter One
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In this episode of The 20 Minute VC, Harry Stebbings speaks with Jeff Morris Jr., Director of Product and Revenue at Tinder and founder of Chapter One, about combining product management with seed investing, evaluating crypto and mobile markets, and lessons learned from elite venture capitalists.
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 44% of the talking time here. How this is scored →
Harry as informed peer 3.0 Guest teaching 3.1 Guest disagreement 1.8 Harry pushing back 1.1
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 20:43 Jeff calls out VCs making uninformed decisions in hyper-fast rounds
Jeff forcefully criticizes VCs for failing to do diligence on 30-page whitepapers and rushing into fast crypto rounds purely due to FOMO.
Hardest push from Harry ▶ 8:09 Harry challenges the comparison of product portfolio loss ratios to seed venture fundsHarry pushes back on Jeff's product-as-portfolio thesis by questioning how corporate leadership would ever tolerate the high loss ratios expected in early-stage venture capital.
Biggest teaching moment ▶ 10:32 Jeff reframes investor product advice as merely another data pointJeff educates founders on why they should strictly filter investor product suggestions, urging them to check whether the investor has ever actually built products in the trenches.
Harry holds his own ▶ 14:12 Harry brings Peter Fenton's wisdom and questions the consensus on mobile investingHarry shows strong industry context by quoting Peter Fenton's advice on investing and directly challenging the prevailing VC consensus that the mobile platform shift is completely over.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Jeff Morris Jr.'s Journey into Tech and Angel Investing | 1 | 2 | 0 | 0 | Harry introduces Jeff with high praise and asks open-ended background questions about his transition from film school to tech and angel investing. Jeff warmly details his entry into tech via Twitter and his evolution into a prominent syndicate lead. | |
| Applying an Investor Mindset to Product Management | 4 | 3 | 1 | 2 | Jeff explains applying portfolio theory and investment risk-return analysis to product management. Harry pushes back with an astute question asking how corporate tolerance for high loss ratios in product compares to seed venture funds. | |
| Investor Product Advice, Co-Investors, and Tech History | 3 | 3 | 1 | 0 | Jeff warns founders to treat VC product advice as merely another data point rather than authoritative direction. Harry adds context by citing the Collison brothers at Stripe regarding historical industry perspective. | |
| Advice for Aspiring VCs and the Future of Mobile Opportunities | 4 | 4 | 2 | 2 | Harry quotes Peter Fenton's advice on becoming an investor and questions consensus by asking why Jeff still believes in mobile when most VCs consider it played out. Jeff counters that global user numbers and shifting consumer tastes create ongoing mobile opportunities. | |
| Crypto Realities, Valuations, and Round Dynamics | 4 | 4 | 4 | 2 | Jeff critiques the crypto hype cycle, arguing investors treat crypto teams like superhumans despite them facing standard operational hurdles. Harry brings up startup runway benchmarks like Jeff Clavier's 36-month recommendation versus his own 24-month view. | |
| Diligence Frameworks and Transparency in Fundraising | 2 | 3 | 2 | 1 | Jeff outlines his pragmatic diligence process, including leveraging internal data science teams at Tinder for technical evaluations. He also expresses frustration with founders who withhold details about co-investors during fundraising rounds. | |
| Observing Legendary VCs, Contrarianism, and Price Sensitivity | 4 | 4 | 2 | 2 | Jeff shares observations of VC legends like Doug Leone and Bill Gurley, highlighting their intense focus and note-taking. Harry cites Peter Fenton on price sensitivity, leading Jeff to discuss how angel incentives differ fundamentally from VC management fee structures. | |
| Quickfire Round: Books, Career Highlights, and Startup Advice | 2 | 2 | 2 | 0 | In the quickfire round, Jeff touches on his influential middle school coach Bill Campbell, the success of Tinder Gold, and refutes the common VC advice that startups must be located in Silicon Valley. |
Statements from this episode (18)
Tinder became the world's top-grossing app under Jeff Morris Jr.
“When asked to lead the revenue team, they were ranked number 17 in the App Store. Within a year, under Jeff's leadership, Tinder became the number one top-grossing app in the world.”
Jeff Morris Jr.: Startup investing is addictive like getting a tattoo
“I think investing is kind of like getting a tattoo. It's like you get one investment and you just want more.”
Jeff Morris Jr.: Product managers should apply portfolio theory to decisions
“And one piece that I'd like to add to that list is, is portfolio theory. So I think every product manager should have some sense of the portfolio of products they want to build and really apply an investor's mindset to making those decisions.”
Jeff Morris Jr.: Operator-investors can only compete with VCs through extreme focus
“So rather than being kind of a generalist, the only way I can have any edge in terms of competing with other venture capitalists is if I really go deep on one or two topics.”
Founders should treat investor product advice as just another data point
“The one thing founders must know is that investors advice is another data point. So you have all these data points to consider when you're building products and really you shouldn't give it any extra weight because it comes from an investor.”
Morris: Top product leaders and VCs possess deep software history knowledge
“The best product people I know have this really unique view on kind of Silicon Valley history, or more generally just software history.”
Today's dominant mobile apps will be replaced within 5 to 10 years
“So if you click your phone and assume the applications that we use today will be used in five years or 10 years, I would think that you're just wrong.”
Jeff Morris Jr.: Market timing in venture capital is a fool's game
“Anyone who claims to know how to time markets, I think is crazy or just a little bit too self-confident. So I don't try to time markets. I do try and just back the best possible entrepreneurs in a given space.”
Mobile apps with proprietary IP and subscriptions are tech's best business model
“So I'm always looking for mobile products where you own the IP and you can sell other subscriptions or an app purchases. I think it's just the best business model ever. Tough to find, but once you find it, it's kind of the gift that keeps on giving.”
$60M seed valuation caps put undue pressure on teams and degrade product
“When you see projects raising at 60 caps in seed rounds, it starts to make you question what's going on, and what it does in terms of the employees is it puts, I think, a lot of undue pressure on individual employees to ship products faster than they probably …”
Jeff Morris Jr.: First-time founders need 24+ months of runway
“But if it's a first-time entrepreneur, I do want to see 24 plus months just to give me the assurance that they have time to build their product before they start raising money again.”
Hyper-fast crypto fundraising rounds force VCs to skip technical due diligence
“Yeah, I think what it does is it forces venture capitalists to make decisions that aren't entirely informed. So if you actually read a white paper it's basically 30 pages of really technical information that requires diligence, which you couldn't possibly do i…”
Morris: Founders should be transparent about who else is investing in their round
“And so if you know an investor is actually interested in your company and is talking to you for the right reasons, being asked the question, who else is investing your round? I think it's a totally fair question. And on the investor side, like you really want …”
Jeff Morris Jr.: True contrarianism stems from deep expertise, not posturing
“Really what it means to me is you just wanted to become an expert, and you're so obsessed with some topic that you decided to learn more about it than everyone else, and that's really what it comes down to. I think everyone wants to claim they're contrarian, b…”
Angel investors require more conviction to be contrarian than institutional VCs
“As an angel investor, it's a lot more risky because it's your own money, and if you make a bad bet, that's money you'll never see again, and you know, most of us aren't making management fees, and we're kind of getting by the returns that we make for ourselves…”
Jeff Morris Jr.: Founders consistently underestimate customer willingness to pay
“You can always charge a little more than you think customers are willing to pay. And I saw Adam Draper mentioned, you can charge four X the amount that you think customers are willing to pay. I think that's probably a little bit high, but I do think we underes…”
Jeff Morris Jr.: Angels cannot afford to be overly price sensitive
“I think for an angel looking at companies, you can't be too price sensitive because really the opportunities are fewer and harder to find. So when I see a dealer company that I love, I'm normally not as price sensitive just because I want to get in business wi…”