Top Five Insights from Episode 1186

1. The future of venture capital (Link):

   • There are new disruptive entrants from both ends:
     • Low end: Rolling funds, equity crowdfunding, syndicates
     • High end: Hedge funds raising early-stage funds to invest in startups
   • Top tier firms will thrive due to brand recognition and an influx of startups
   • So, who gets burned?
     • Mid-to-lower tier traditional venture firms will be the big losers and see their deal flow dry up

2. Google's new career certifications and income-sharing agreements are changing education for the better (Link):

   "The academic industrial complex as it exists today is totally broken. It's just a disaster as far as anyone can tell. And it needs competition." - Zach Coelius

   • Jason believes employers will view Google's certifications as on par with an Ivy League degree in a couple of years

   • The courses range from free to low hundreds of dollars and require ~10 hours per week of learning

   • In a blog post from March 11th, 2021, CEO Sundar Pichai wrote:

     "53% of graduates of the IT Support Certificate in the U.S. have been female, Black, Latino or veterans. And 82% of graduates overall say the program helped them advance their career within six months, including getting a raise, finding a new job, or starting a new business."

   • Who are the losers? The bottom 1000 universities in the US

3. Zach's red flags for pitch decks (Link):

   • no research on how to make a great pitch decks
   • an idea is worthless, a validated idea is priceless
   • using too many words, lack of clarity
   • omitting important numbers

4. Jason's advice on nailing your pitch (Link):

   • be candid and upfront about important numbers
   • one point, one slide
   • keep good pace through deck
   • presenting an ugly deck is like having a stain on your shirt
     • use an online template if you're unsure where to start
   • focus on: customer, product, team, traction
   • leave out: TedX, TAM, startup awards, non-paid partnerships

5. How to pitch a pre-revenue startup (Link):

   "For a startup to succeed you need to either be 10X better than the existing solutions out there, or you need to solve a pain that's so painful that (customers) are desperate to have it solved." - Zach Coelius

   • Most importantly: have product validation
     • have customer testimonials about how they would pay for your product and how it would impact them greatly
   • Talk about the usage patterns of the top 20% of your users
     • understand what your company looks like if you can 100x your most engaged users

Top Five Insights from Episode 1189

1. To successfully grow a two-sided marketplace from nothing, focus on the "white-hot" groups on both sides that passionately need the transaction to occur (Link)

   • Use these groups to get the flywheel going
   • Don't try to boil the ocean on day one, it won't work
   • Zach's favorite marketplace thinker is Benchmark's Sarah Tavel

2. According to Zach, angel investors need around 100 investments to hit a true outlier (Uber, Zoom, Google, eBay, Snowflake, etc.) (Link)

   • "You're not necessarily spraying and praying, but it's pretty damn close to it." - Zach Coelius

3. Founders should reach out to investors as early as possible in their companies life cycle, even if they're only asking for feedback, to start building a relationship (Link)

   "'Ask for advice, get funding. Ask for funding, get advice.' is a saying we have out here, and it's largely true." - Jason Calacanis

   • Reach out early, but don't waste time
   • Investors are typically binary, either most/all of them want to invest or none of them do
     • If you start fundraising and don't get a good signal from investors quickly, then head back to the drawing board and change your approach

4. Equity crowdfunding regulation changes (Link):

   • As of March 2021, companies can now raise up to $5M in equity crowdfunding from non-accredited investors
     • For Startups: it is an amazing way for founders to raise capital from a non-traditional source
     • For Investors: it is crucial to diligence your deals as well as the platform. Unlike syndicates, there are no mandatory leads for these deals, and all selection/diligence is up to the platform, which makes it a riskier bet.

5. Should startups be worried about big tech companies copying their business? (Link)

   • Generally speaking, no. Big tech companies usually "treat little projects as little projects," so startups shouldn't be afraid to compete on the margins.

   • Jason gives a few case studies from 2020:

     • Twitter went after Clubhouse with Twitter Spaces, but all that did was reinforce Clubhouse's spot as the top pure play for social audio
     • Snap's business surged in 2020 despite their stories innovation being copied by every other social media company for years
     • Zoom dominated video calls despite going up against Skype, Cisco, etc. as a startup

   • One caveat: if you're building on top of someone else's platform, you are in big trouble.

     "If you're building on a platform, you will get totally copied and ripped off." - Zach Coelius

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