Interview, Fireside Chat
Wesley Chan: How I Created Google Analytics; The Founding Story of Gmail & Canva | 20VC #919
- The speaker anticipates spending approximately two years to achieve two gigabytes of email storage per user, attributing the feasibility to a predicted massive drop in storage costs driven by Moore's Law.
- Long-term transitions, such as moving from a $500,000 Roadster to a $30,000 Model 3, are predicted to require over 10 years, with specific investments limited to founders articulating a "hundred year plan."
- The speaker plans to deploy core positions of $10 million to $20 million within a $450 million fund, aiming for 20 portfolio companies with a 30% hit rate to generate six billion-dollar outcomes and a 5x fund return.
- Current market conditions are described as treacherous where venture capital investors risk becoming the "last check" into companies, potentially forcing shutdowns or continuous capital injections until capital markets stabilize.
- The fund targets closure in less than a couple of months and is projected to be nearly 2x to 3x oversubscribed, utilizing a quiet fundraising approach to avoid public market frenzies.
- Operational strategy involves maintaining a small, "Navy SEAL-sized" team for five years to enable decisions in under 12 hours, while building a network where founders view the firm as their "first phone call" for any issue.
- Investment criteria prioritize "product visionaries" capable of creating new markets over those sizing existing ones, explicitly rejecting companies with rigid dogmas regarding ownership percentages or board seats.
- The speaker excludes crypto investments entirely, labeling more than three-quarters of the sector as scams that target vulnerable individuals, and avoids sectors where personal expertise creates a natural bias against investment.
- Market dynamics are predicted to always prevail, with success dependent on founders who can adapt or create markets rather than those relying on traditional market sizing exercises which are deemed a fallacy.
- Specific investment misses are attributed to the speaker's inability to see evolution in companies like Twilio, Descript, and Riverside due to existing knowledge bias, contrasting with successful "market creation" examples like Google and Canva.
- Risks include the potential for brilliant founders to launch products prematurely when the market is not ready, causing them to "go to zero," and the possibility of founders having insufficient cash reserves (e.g., two months) leading to a seized market for follow-on funding.
- The speaker asserts that money is secondary to founder fulfillment and intends to remain a "romantic" investor focused on companies creating value without current revenue, such as Canva at a $100 million valuation, rather than those merely expanding or stealing market share.