61–70 of 97 posts
Speaking as a practicing fruit fly geneticist, the metaphor of a "fruit fly experiment" is lost on me... anyone care to enlighten me?
I would think that a practicing fruit fly geneticist would get excited when fruit flies come up, not snarky :-).
I suspect this is more of a PR move about their focus than anything else. We'll have to see how it plays out, but as a16z grows, I'm sure a ton of Series A deals are trying to get an intro, this leads to overhead and a mass of companies that a16z doesn't feel are a good fit for the exponential returns they are looking to get. Get rid of those companies by saying we don't do series A. But they'll still get deal flow t…
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I would think that a practicing fruit fly geneticist would get excited when fruit flies come up, not snarky :-).
I didn't read that as snarky. I also don't understand the fruit fly analogy and I can understand why a fruit fly geneticist (who knows a few orders of magnitude more than me) isn't sure which aspect of fruit flies is the relevant one.
This shift is yesterday's news. Given their size, brand and PR, however, when Andreesen Horowitz does it, they get an article in the WSJ. The reality is that tons of VCs have already migrated away from consumer startups.[1][2] Data to support above [1] 84% of 2013's largest exits in tech have been to enterprise companies - http://www.cbinsights.com/blog/trends/enterprise-tech-consum... [2] 70% of 2013's largest tech…
Looking at 2013 exits (or financings) is missing the mark. VC is a game of 1000x returns. And those returns have come from companies like FB, Google, etc. Most of the value of YC's portfolio come from Dropbox and Airbnb. All of these companies are decidedly consumer companies.
That's not true. Today, a lot of funds, particularly larger ones, are placing bigger bets on companies in later rounds, which is arguably a smarter strategy than trying to place lots of small bets earlier in the hopes that you'll get lucky and discover the Facebook or Twitter and have put enough into it to make your big percentage return a big absolute dollar return.
Taking Twitter as an example, its last round of funding in 2011 reportedly entailed a $9.25 billion valuation according to PitchBook. If its valuation at IPO is north of $20 billion, as some expect, the investors who poured $400 million into the company in 2011 would more than double their investment. If you look at Twitter's S-1, a lot of the biggest stakeholders were investors in Series C and beyond.
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Looking at 2013 exits (or financings) is missing the mark. VC is a game of 1000x returns. And those returns have come from companies like FB, Google, etc. Most of the value of YC's portfolio come from Dropbox and Airbnb. All of these companies are decidedly consumer companies.
> VC is a game of 1000x returns. That's not true. Today, a lot of funds, particularly larger ones, are placing bigger bets on companies in later rounds, which is arguably a smarter strategy than trying to place lots of small bets earlier in the hopes that you'll get lucky and discover the Facebook or Twitter and have put enough into it to make your big percentage return a big absolute dollar return. Taking Twitter as…
Is it necessarily a smarter strategy? To me just seems this is the latest swing of the pendulum up and down the risk/reward curve. If factors change in 5 years, their "smart strategy" could begin to include more emphasis on consumer A's.
Earlier quoted context omitted.
Looking at 2013 exits (or financings) is missing the mark. VC is a game of 1000x returns. And those returns have come from companies like FB, Google, etc. Most of the value of YC's portfolio come from Dropbox and Airbnb. All of these companies are decidedly consumer companies.
It's likely that Dropbox probably makes way, way more money from enterprise than from it's consumer business.
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I didn't read that as snarky. I also don't understand the fruit fly analogy and I can understand why a fruit fly geneticist (who knows a few orders of magnitude more than me) isn't sure which aspect of fruit flies is the relevant one.
I'll go read several textbooks on fruit fly genetics and get right back on this.
In any case, I'd love to hear more about the enterprise space as it's something I'm interested in but have little visibility into. Elsewhere you mention 1200 execs (annually) tell you what they think of new ideas. Can you share any of the insights or problems?
I bet there are lots of nascent startups/ideas that may not realise they have an enterprise offering because they're not fully aware of the problems companies have. I'm working on turing some systems research work into a spinout and only recently have I begun to understand how valuable it could be to the enterprise [1]. This is partly because a lot of the tech stuff I see online is around consumer companies (my fault, I know - but I'm working on it).
To me this is essentially admitting that Andreesen Horowitz is loosing the ability to identify impactful startups. That is fine, its harder to do at scale, but nothing is different now than 5 years ago. We have lots of people doing experiments, some hit early success, some pivot. Once you get product market fit, you raise that B/C/IPO on the back of the growth you've been able to afford thanks to your raises and reve…
Maybe you're right, but that's not what Scott was saying and that's not what I think. In my own words: consumer startups more and more have this very interesting "lightning in a bottle" effect where sometimes they take off like crazy and sometimes they just don't. I give full credit to the teams that figure out how to get the flywheel spun up, but it is also important to realize just how many highly capable founders…
How about asking BigCos their top pain points once in a while? That would be a 1200x treasure for current/future entrepreneurs.