Aug 16, 2020 · 47m · neon-show
Ashmeet Sidana, Engineering Capital on Technical insights and building a fund for Engineers
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In this episode of the 100x Entrepreneur Podcast, Engineering Capital founder Ashmeet Sidana discusses his investment thesis centered on deep technical insights, the brutal power-law economics of venture capital, and the product discipline required to scale category-defining software enterprises.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
Siddhartha as informed peer 2.2 Guest teaching 4.2 Guest disagreement 0.5 Siddhartha pushing back 0.7
speaking balance: gold is Siddhartha, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 44:44 Dismantling the confusion between simple and easy
Ashmeet forcefully pushes back against the host's skeptical remark, citing mentor Catherine Gould to sharply delineate that entrepreneurship is simple (uncomplicated) but fundamentally hard (not easy).
Hardest push from Siddhartha ▶ 34:41 Host pushes back on zero-sum VC analogySiddharth directly challenges Ashmeet's Olympic analogy, arguing that venture capital and wealth creation are positive-sum rather than a winner-take-all zero-sum sport.
Biggest teaching moment ▶ 26:45 Masterclass on bottom-up vs top-down market sizingAshmeet provides a comprehensive lesson on why standard top-down market extrapolations are misleading for venture disruption, breaking down the exact bottom-up unit economic mechanics.
Siddhartha holds their own ▶ 20:22 Host cites Postman as an Indian deep tech exemplarSiddharth demonstrates sector knowledge by introducing Postman's $3.5B API platform valuation and go-to-market model as proof that India can originate top-tier technical insight companies.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Siddhartha as informed peer | Guest teaching | Guest disagreement | Siddhartha pushing back | Why |
|---|---|---|---|---|---|---|
| Ashmeet's Early Life and Journey to Silicon Valley | 1 | 3 | 0 | 0 | The host asks open-ended introductory questions about Ashmeet's journey and fund thesis. Ashmeet educates the audience on his specific definition of a technical insight. | |
| Comparing Technical, Consumer, and Market Insights | 2 | 4 | 0 | 0 | The host asks Ashmeet to clarify the taxonomy of startup insights. Ashmeet delivers a clear pedagogical breakdown using Google, Facebook, and Amazon as contrasting models. | |
| Portfolio Case Studies: SignalFx, Robust Intelligence, and VFunction | 1 | 4 | 0 | 0 | The host prompts portfolio examples, allowing Ashmeet to explain deep tech architectures like continuous monitoring and data contamination in AI. | |
| Evaluating Commercial Viability and Rejecting Technical Insights | 2 | 5 | 0 | 0 | The host asks how non-viable technical insights are filtered out. Ashmeet explains why technical insight is merely necessary but not sufficient, detailing the strict risk-reward profile of venture capital. | |
| Seed Investing in Azure Power and Cleantech Realities | 2 | 3 | 0 | 1 | The host inquires into the Azure Power investment and gently asks why Ashmeet did not continue investing in India. Ashmeet explains the unit economics of diesel generator competition and the localized nature of early-stage VC. | |
| The Rise of India's Tech Ecosystem and Postman's Impact | 3 | 4 | 0 | 0 | The host brings up Postman as a prime example of an Indian technical insight company. Ashmeet validates this and recounts the historical lineage of Silicon Valley originating from Shockley Semiconductor. | |
| Bottom-Up Market Sizing for Disruptive Technologies | 3 | 6 | 1 | 1 | The host asks why top-down market sizing is flawed. Ashmeet strongly denounces top-down extrapolation as dangerous for disruptive startups and teaches the fundamentals of bottom-up unit economics. | |
| Venture Capital Economics and the Olympic Gold Medal Analogy | 4 | 5 | 2 | 4 | The host challenges Ashmeet's framing of venture capital as zero-sum versus positive-sum wealth creation. Ashmeet clarifies empirical asset class data showing average VC returns net of fees are near zero. | |
| The Danger of Feature Gluttony in Early-Stage Startups | 2 | 4 | 0 | 0 | The host references Ashmeet's concept of gluttony in early startups. Ashmeet explains why startups must narrow their focus using Steve Jobs' iPhone and Mac launch strategies. | |
| Customer Discovery and the 'Simple but Not Easy' Principle | 3 | 6 | 2 | 2 | The host remarks on the apparent impossibility of building decacorns just by talking to customers. Ashmeet educates on the semantic and practical difference between simple and easy. | |
| Himalayan Lessons on Mountain Climbing and Startup Building | 1 | 2 | 0 | 0 | The host asks about Ashmeet climbing Everest. Ashmeet gently clarifies that he did not reach the summit but spent meaningful time in Nepal, sharing the one-step-at-a-time lesson. |
Statements from this episode (16)
Sidana: Most Silicon Valley VC Ignores Technical Roots for Market Insights
“I started engineering capital in 2015 because I noticed that even here in Silicon Valley, most of venture capital is actually focused on market insights or consumer insights. We had drifted away from our original roots, which of course was Silicon Valley.”
Sidana: True Technical Insights Are Non-Obvious to Competent Engineers
“A technical insight means if I tell a good engineer what I'm doing, they will not know how I'm doing it. It will not be obvious to them how to build it, and that means you have an interesting technical insight.”
Sidana: Splunk Acquired Cloud Monitoring Startup SignalFx for Over $1 Billion
“And that is the problem that SignalFX solved, and then of course, Phil Liu and Karthik, who were the founders of SignalFX, built a wonderful business on the back of that, that that Splunk was happy to acquire for over a billion dollars.”
Sidana: Data Is the New Asbestos That Can Destroy Your Company
“I like to say data is also the new asbestos. In other words, data is toxic, and data will kill your company if you're not careful how you manage the data in your organization.”
Sidana: Technical Insights Are Necessary But Insufficient For Venture Success
“Most technical insights are actually not good venture-backed opportunities. So it's really important to understand that a technical insight is a necessary, but not a sufficient condition to build an amazing technology company.”
Sidana: Successful Venture Investing Requires Being Physically Local With Founders
“Investing is a very local business. You really have to be local. You have to spend time in the market. You have to spend time with the entrepreneurs if you want to be a good investor.”
Ahluwalia: India Will Become a Top-Three Hub for Technical Startups
“So I think India will be, you know, second or the third home ground for the next set of companies built on technical insights.”
Sidana Predicts Postman Alumni Will Seed India's Next Technical Startup Ecosystem
“And now with the success of Postman in India, I predict that as Postman succeeds, it goes public, people will learn that playbook, more people will leave. And if those other factors can exist around it, then you will see a blossoming of true technology insight…”
Sidana: Faulty Market Estimation Kills More Startups Than Lack of Funding
“Many, many, many companies fail, not because the entrepreneurs don't work hard, or they don't have a good insight, or that they don't get financed, but because they have not estimated the market correctly.”
Sidana: Top-Down Market Sizing Is Incredibly Dangerous for Venture Capital Evaluation
“I think a top-down market size is an incredibly dangerous way to think about a market from a venture perspective.”
Sidana: Winning in Venture Capital Resembles Competing for an Olympic Gold
“The analogy that I would make if you think about venture capital is like winning a gold medal at the Olympics. Let's say you want to run a hundred meters, and you're really good, and you come first in your school, and then you come first in your city, and then…”
Sidana: The Average Venture Capital Firm Generates Flat or Negative Returns
“General belief is that the average venture capital firm has either zero or perhaps even negative returns net of fees. So as an asset class, venture capital on average Is not a profitable business.”
Sidana: Startups Should Solve Very Narrow Problems With Broad Market Applications
“A better approach is to identify a very small problem, a very narrow problem that has a broad application, and then you can build a very big company. That is the ideal way for an entrepreneur to do a startup, and so what I recommend to people is even at the ri…”
Sidana: The Hardest Challenge for a Product Manager Is Deleting Features
“He understood that the hardest thing for a product manager to do is to delete features, not add features. It is easy to add features. The hard thing is to remove the features and solve only a very narrow problem.”
Sidana: The Primary Risk for Startup Founders Is Feature Gluttony, Not Starvation
“The risk factor for you is not starvation. It is gluttony. You are aiming for too many features, aim for less, and you are more likely to be successful.”
Sidana Rejects Steve Jobs' Claim That Customers Don't Know What They Want
“Steve Jobs often said that the customer does not know what he wants, he or she wants. I don't believe that. I believe that if you spend time with customers and you really understand and really listen to what they are saying, you can identify the problem and yo…”