Wesley Chan: How I Created Google Analytics; The Founding Story of Gmail & Canva | 20VC #919

Wesley Chan's Career Trajectory:

• Spent over a decade at Google building key products including Google Analytics, the ad system, Google Voice, and contributing to Android.
• Left Google in 2009 to pursue startup founding, but Larry Page advised him to pursue investing due to his track record of acquiring companies like Urchin and Android.
• Co-founded Google Ventures (GV), spending five years learning from legends like Mike Moritz and John Doerr before leaving.
• Joined Felicis Ventures as a partner, then founded FPV Ventures with Peg (his partner) and a small team of five people to return to a "Navy SEAL-sized" team dynamic.

FPV Ventures Strategy and Fund Structure:

• Fund Size: Raised a $450 million fund, with 80%+ of limited partners (LPs) being charities and foundations.
• Check Size: Targets checks between $10 million and $20 million, focusing on 20 core positions to maintain a high probability of returning the fund.
• Investment Philosophy: Prioritizes "market creation" over market expansion or theft, seeking founders with a "100-year plan" who can build a product, not just a feature.
• Capital Concentration: Prefers "more shots on goal" across many companies rather than concentrating capital on fewer deals, arguing that finding outlier companies like Canva requires a diversified approach.
• Terms and Flexibility: Non-dogmatic on ownership percentages (did not require 20% for Canva) or board seats; will only take a board seat if explicitly requested by the founder.
• Exclusions: Explicitly avoids crypto due to a perception of high fraud risk and lack of revenue focus.

Core Investment Criteria and "Product Visionary" Indexing:

• The "Two Gigabyte" Moment: Investors look for founders proposing features that are an order of magnitude better than incumbents (e.g., Gmail's 2GB storage vs. Hotmail's 20MB) rather than incremental improvements.
• 100-Year Vision: Requires founders to articulate a long-term vision for how the company will adapt the world in a century; rejects founders without this scope.
• Market Sizing Rejection: Disregards traditional TAM (Total Addressable Market) slides and Gartner reports, viewing them as fallacies used to conflate features with massive product markets.
• Bias Management: Actively avoids investing in sectors where he has deep expertise (e.g., telecom) to prevent the "non-Benedictine syndrome" where prior knowledge leads to over-skepticism and missed deals (e.g., passing on Twilio).
• Learning from Misses: Acknowledges Twilio, Descript, and Riverside as major misses, learning that deep domain expertise can blind investors to a founder's ability to morph the product.

Current Market Conditions and Advice:

• "Wait and Stay Put": Advises founders with ample cash runway to delay raising until the market resets, as many competitors are fundraising out of desperation with low runway.
• Investment Environment: Characterizes the current market as "treacherous" for late-stage checks due to credit market freezes, warning against being the "investor of last resort."
• FPV Activity: Aggressively deploying capital in the first two months of the fund into known, high-quality companies, but refusing to back those with only 2-3 months of runway.
• LP Sentiment: Found that the current environment favors traditional, revenue-generating businesses over crypto/Web3, making his "boring business" strategy a "safe harbor" for LPs.

Founder and Product Insights from Google Era:

• Larry Page's Insight: Page taught that "if you don't have the data, I'm right," but emphasized that without data, founders must convince with a vision of how a product can solve a massive problem (e.g., Gmail's storage strategy).
• Product vs. Feature: Emphasizes Bill Campbell's distinction: founders must build a product, not a feature; a feature is not worth time if it doesn't have a path to a massive product.
• Visionary Adaptability: Investors must believe a founder can morph their company over 5-10 years (e.g., Tesla from Roadster to Model 3), rather than judging solely on current product limitations.

Personal Attributes and Leadership Style:

• Learning Process: Applies a piano mastery framework to VC: learning mechanics (deal terms) via self-study, then mastering the "art" (timing, nuance, empathy) by listening to and emulating top performers.
• Self-Assessment: Identifies "empathy with founders" as a primary strength and "social awkwardness" as a weakness resulting from an engineering background.
• Core Values: Prioritizes team fulfillment and building a "family of founders" where the firm is the "first phone call" for advice, regardless of financial outcome.
• Five-Year Goal: Maintain a small team, cultivate a network of founders who advocate for FPV, and ensure team fulfillment continues.

Specific Investments and Portfolio Highlights:

• Canva: Described as the "lifetime achievement award" for his career; invested when it was a "head-scratcher" due to founder relationships, location (Sydney), and valuation, defying standard dogma.
• Other Backs: Invested in Plaid, Gusto, Flexport, Robinhood, and life science companies like Orca Bio and Zillis.
• Board Participation: Takes board seats only if founders request them; finds large boards (10+ people) unproductive compared to small, intimate teams.

Quickfire Responses:

• Favorite Book: Liar's Poker by Michael Lewis.
• Contrarian Opinion: Early rejection of crypto and Web3, citing widespread scams and lack of revenue.
• Mindset Shift: Willing to change investment theses based on data presented by partners, following Larry Page's philosophy on data-driven debate.