The Challenge in VC
Over four years ago I wrote this old post about the spawn of craigslist. It hit a nerve in the zeitgeist and tends to go re-viral about once a year. That happened again this morning as someone emailed me a usage of this image in a post calling for YouTube to be similarly fragmented.
Looking at the image this morning, I’m struck by the arc of the companies on this list. Some of them have IPO’d. Others are out of business. If you could have made investments in all of these companies back in 2010, you’d have a portfolio of 34 companies with roughly 6-8 billion dollar outcomes, which would likely be one of the best venture funds of the decade.
The lesson here is that venture capital is less about identifying great investment opportunities and is far more about getting access to those opportunities. Knowing that this handful of companies would become interesting in 2010 is not what makes a great VC. It’s convincing the entrepreneurs in all these companies to partner with you on their journey; that’s the battle.