Breinlinger: Relying on early metrics like MRR leads VCs to bad decisions
Josh Breinlinger · 20VC: Why Spray & Pray Investing Is Wrong, Why Data-Informed VC Beats Data Driven VC & What To Look For When Investing In A Marketplace with Josh Breinlinger, Managing Director @ Jackson Square Ventures · Apr 5, 2017 · at 5:03
Josh Breinlinger, Managing Director at Jackson Square Ventures, explains why focusing purely on quantitative data early on can mislead investors.
0:00 / 0:26exact quote · 26.3s
720p mp4 · rendered on demand · StarZero watermark
“If you are so focused on just the data of user acquisitions, MRR growth, whatever, especially at the early stages where it's probably only a million or so in revenue, I think you can just buy into hype too easily and make bad decisions that ignore common sense and ignore what could happen with the competition or Don't really focus on, hey, is what they're doing today a scalable approach, and will it keep working?”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Josh Breinlinger
Breinlinger: On-demand 'Uber for locksmiths' models are terrible marketplace ideas
“Where people run into mistakes is where they might try to do the Uber for locksmiths. To me, that's just a terrible market because you just don't use locksmiths very often.”
Breinlinger: Three of four Jackson Square Ventures unicorns required bridge rounds
“At Jackson Square Ventures, the partners here, we've invested in four unicorn companies, and three of them, Equalogic, DocuSign, and Responsys, they all had bridge rounds.”
Breinlinger: Concentrated, high-conviction portfolios are best strategy to beat market
“I believe the best way to get returns is to have very high conviction investments, very concentrated investments, and I think that's the way to beat the market and stand out.”
Breinlinger: Marketplace platforms cannot successfully span both commodity and premium tiers
“I actually don't believe the same company can own both. Largely because the workflow is just completely different for commodity level and master level.”
Breinlinger: Horizontal marketplaces beat vertical models for low-frequency categories
“The frequency of any one of those Types of transactions might be fairly low, but when you span every single category and you can literally buy anything, the frequency is, is very high. And OfferUp has done that in peer-to-peer commerce. Thumbtack has done that…”