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2020-10-09T17:20:57

2020-10-09T17:20:57

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2022-03-20T09:32:59

2022-03-20T09:32:59

episode-4-fj-labs-investment-thesis

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Episode 4: FJ Labs’ Investment Thesis

<p>In the <a href="https://fabricegrinda.com/playing-with-unicorns-episode-3-how-vcs-evaluate-startups/" target="_blank" rel="noreferrer noopener">third episode</a>, I described how VCs evaluate startups by using a combination of the team, business, deal terms and whether the idea fits with their thesis to decide whether to invest or not. In this episode, I present FJ Labs’ Investment thesis.</p> <p>I start by covering why we focus on marketplaces, then detail: &nbsp;</p> <ul><li>Our current marketplace theses:<ul><li>Verticalization of horizontals</li></ul><ul><li>Transition to supply pick marketplaces</li></ul><ul><li>B2B marketplaces</li></ul></li><li>The Future of Food</li><li>The Future of Work</li><li>The Future of Real Estate</li><li>The Future of Lending</li></ul> <figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper"> <iframe loading="lazy" title="Episode 4: FJ Labs Investment Thesis" width="840" height="473" src="https://www.youtube.com/embed/hoBRHBIAr14?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe> </div></figure> <p>For your reference I am including the slides I used during the episode.</p> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide1-4.jpg" alt="" class="wp-image-13120" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide1-4.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide1-4-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide1-4-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide1-4-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide1-4-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide2-2.jpg" alt="" class="wp-image-13127" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide2-2.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide2-2-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide2-2-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide2-2-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide2-2-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide3-1.jpg" alt="" class="wp-image-13128" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide3-1.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide3-1-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide3-1-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide3-1-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide3-1-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide4-1.jpg" alt="" class="wp-image-13129" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide4-1.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide4-1-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide4-1-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide4-1-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide4-1-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide5-1.jpg" alt="" class="wp-image-13130" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide5-1.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide5-1-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide5-1-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide5-1-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide5-1-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide6-1.jpg" alt="" class="wp-image-13131" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide6-1.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide6-1-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide6-1-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide6-1-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide6-1-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide7-1.jpg" alt="" class="wp-image-13132" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide7-1.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide7-1-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide7-1-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide7-1-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide7-1-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide8-1.jpg" alt="" class="wp-image-13134" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide8-1.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide8-1-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide8-1-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide8-1-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide8-1-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide9.jpg" alt="" class="wp-image-13135" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide9.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide9-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide9-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide9-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide9-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide10.jpg" alt="" class="wp-image-13136" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide10.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide10-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide10-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide10-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide10-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide11.jpg" alt="" class="wp-image-13137" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide11.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide11-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide11-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide11-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide11-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide12.jpg" alt="" class="wp-image-13138" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide12.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide12-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide12-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide12-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide12-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide13.jpg" alt="" class="wp-image-13139" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide13.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide13-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide13-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide13-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide13-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide14.jpg" alt="" class="wp-image-13140" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide14.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide14-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide14-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide14-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide14-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide15.jpg" alt="" class="wp-image-13142" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide15.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide15-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide15-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide15-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide15-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide16.jpg" alt="" class="wp-image-13143" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide16.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide16-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide16-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide16-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide16-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide17.jpg" alt="" class="wp-image-13144" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide17.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide17-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide17-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide17-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide17-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide18.jpg" alt="" class="wp-image-13145" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide18.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide18-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide18-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide18-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide18-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide19.jpg" alt="" class="wp-image-13146" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide19.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide19-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide19-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide19-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide19-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide20.jpg" alt="" class="wp-image-13147" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide20.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide20-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide20-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide20-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide20-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide21.jpg" alt="" class="wp-image-13148" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide21.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide21-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide21-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide21-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide21-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide22.jpg" alt="" class="wp-image-13150" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide22.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide22-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide22-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide22-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide22-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide23.jpg" alt="" class="wp-image-13151" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide23.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide23-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide23-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide23-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide23-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide24.jpg" alt="" class="wp-image-13152" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide24.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide24-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide24-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide24-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide24-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <p>If you prefer, you can listen to the episode in the embedded podcast player.</p> <figure><iframe loading="lazy" style="border: none" src="//html5-player.libsyn.com/embed/episode/id/16336718/height/90/theme/custom/thumbnail/yes/direction/forward/render-playlist/no/custom-color/000000/" height="90" width="100%" scrolling="no" allowfullscreen webkitallowfullscreen mozallowfullscreen oallowfullscreen msallowfullscreen></iframe><figure> <p>In addition to the above Youtube video and embedded podcast player, you can also listen to the podcast on:</p> <ul><li>iTunes:&nbsp;<a href="https://podcasts.apple.com/us/podcast/fj-labs-investment-thesis/id1532336635?i=1000494173661" target="_blank" rel="noreferrer noopener">https://podcasts.apple.com/us/podcast/fj-labs-investment-thesis/id1532336635?i=1000494173661</a></li><li>Spotify:&nbsp;<a href="https://open.spotify.com/episode/75MmR9hhExZ7Lf7VP1PQYx" target="_blank" rel="noreferrer noopener">https://open.spotify.com/episode/75MmR9hhExZ7Lf7VP1PQYx</a></li></ul> <p></p>

<p>In the third episode, I described how VCs evaluate startups by using a combination of the team, business, &hellip; <a href="https://fabricegrinda.com/episode-4-fj-labs-investment-thesis/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;Episode 4: FJ Labs’ Investment Thesis&#8221;</span></a></p>

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Episode 4: FJ Labs’ Investment Thesis. Categories - Playing with Unicorns. Date-Posted - 2020-10-09T17:20:57 . In the third episode, I described how VCs evaluate startups by using a combination of the team, business, deal terms and whether the idea fits with their thesis to decide whether to invest or not. In this episode, I present FJ Labs’ Investment thesis. I start by covering why we focus on marketplaces, then detail: &nbsp; Our current marketplace theses:Verticalization of horizontalsTransition to supply pick marketplacesB2B marketplacesThe Future of FoodThe Future of WorkThe Future of Real EstateThe Future of Lending For your reference I am including the slides I used during the episode. If you prefer, you can listen to the episode in the embedded podcast player. In addition to the above Youtube video and embedded podcast player, you can also listen to the podcast on: iTunes:&nbsp;https://podcasts.apple.com/us/podcast/fj-labs-investment-thesis/id1532336635?i=1000494173661Spotify:&nbsp;https://open.spotify.com/episode/75MmR9hhExZ7Lf7VP1PQYx

2020-10-02T18:23:06

2020-10-02T18:23:06

https://fabricegrinda.com/?p=12959

2022-03-20T07:25:43

2022-03-20T07:25:43

playing-with-unicorns-episode-3-how-vcs-evaluate-startups

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https://fabricegrinda.com/playing-with-unicorns-episode-3-how-vcs-evaluate-startups/

Episode 3: How VCs evaluate startups

<p>In the first episode I covered how and when to fundraise. In this episode, I describe how venture capitalists (VCs) evaluate you once you are in front of them to help you refine your approach and pitch.</p> <p>I explain how VCs use a combination of the team, business, deal terms and whether the idea fits with their thesis to decide whether to invest or not. I also detail:</p> <ul><li>What are unit economics</li><li>Expected traction and valuation at various stages</li><li>That venture capital follows a power law</li><li>How various VCs weigh the different investment criteria based on whether they are playing “Powerball” vs “Moneyball”</li></ul> <figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper"> <iframe loading="lazy" title="Episode 3: How VCs Evaluate Startups" width="840" height="473" src="https://www.youtube.com/embed/ZHUNyMiJhxs?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe> </div></figure> <p>For your reference I am including the slides I used during the episode.</p> <div class="wp-block-image is-style-default"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/FJ-Labs-Investment-Heuristics-2.jpg" alt="" class="wp-image-14571" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/FJ-Labs-Investment-Heuristics-2.jpg 2111w, https://fabricegrinda.com/wp-content/uploads/2020/10/FJ-Labs-Investment-Heuristics-2-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/FJ-Labs-Investment-Heuristics-2-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/FJ-Labs-Investment-Heuristics-2-2048x1152.jpg 2048w, https://fabricegrinda.com/wp-content/uploads/2020/10/FJ-Labs-Investment-Heuristics-2-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/FJ-Labs-Investment-Heuristics-2-1320x742.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide2.jpg" alt="" class="wp-image-12981" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide2.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide2-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide2-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide2-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide2-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide3.jpg" alt="" class="wp-image-12982" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide3.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide3-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide3-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide3-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide3-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide4.jpg" alt="" class="wp-image-12983" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide4.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide4-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide4-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide4-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide4-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide5.jpg" alt="" class="wp-image-12984" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide5.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide5-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide5-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide5-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide5-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide6.jpg" alt="" class="wp-image-12985" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide6.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide6-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide6-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide6-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide6-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide7.jpg" alt="" class="wp-image-12986" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide7.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide7-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide7-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide7-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide7-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/10/slide8.jpg" alt="" class="wp-image-12987" width="960" height="540" srcset="https://fabricegrinda.com/wp-content/uploads/2020/10/slide8.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide8-768x432.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide8-1536x864.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide8-1200x675.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/10/slide8-1320x743.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <p>If you prefer, you can listen to the episode in the embedded podcast player.</p> <figure><iframe loading="lazy" style="border: none" src="//html5-player.libsyn.com/embed/episode/id/16249001/height/90/theme/custom/thumbnail/yes/direction/forward/render-playlist/no/custom-color/000000/" height="90" width="100%" scrolling="no" allowfullscreen webkitallowfullscreen mozallowfullscreen oallowfullscreen msallowfullscreen></iframe><figure> <p>In addition to the above Youtube video and embedded podcast player, you can also listen to the podcast on:</p> <ul><li>iTunes:&nbsp;<a href="https://podcasts.apple.com/podcast/id1532336635?i=1000493372741" target="_blank" rel="noreferrer noopener">https://podcasts.apple.com/podcast/id1532336635?i=1000493372741</a></li><li>Spotify:&nbsp;<a rel="noreferrer noopener" href="https://open.spotify.com/episode/2utEWoTYn1k6VooKQmdj0M" target="_blank">https://open.spotify.com/episode/2utEWoTYn1k6VooKQmdj0M</a></li></ul>

<p>In the first episode I covered how and when to fundraise. In this episode, I describe how venture &hellip; <a href="https://fabricegrinda.com/playing-with-unicorns-episode-3-how-vcs-evaluate-startups/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;Episode 3: How VCs evaluate startups&#8221;</span></a></p>

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Episode 3: How VCs evaluate startups. Categories - Playing with Unicorns. Date-Posted - 2020-10-02T18:23:06 . In the first episode I covered how and when to fundraise. In this episode, I describe how venture capitalists (VCs) evaluate you once you are in front of them to help you refine your approach and pitch. I explain how VCs use a combination of the team, business, deal terms and whether the idea fits with their thesis to decide whether to invest or not. I also detail: What are unit economicsExpected traction and valuation at various stagesThat venture capital follows a power lawHow various VCs weigh the different investment criteria based on whether they are playing “Powerball” vs “Moneyball” For your reference I am including the slides I used during the episode. If you prefer, you can listen to the episode in the embedded podcast player. In addition to the above Youtube video and embedded podcast player, you can also listen to the podcast on: iTunes:&nbsp;https://podcasts.apple.com/podcast/id1532336635?i=1000493372741Spotify:&nbsp;https://open.spotify.com/episode/2utEWoTYn1k6VooKQmdj0M

2020-09-27T13:38:31

2020-09-27T13:38:31

https://fabricegrinda.com/?p=12672

2022-03-21T07:41:55

2022-03-21T07:41:55

playing-with-unicorns-episode-2-build-a-mvp-for-less-than-20k

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https://fabricegrinda.com/playing-with-unicorns-episode-2-build-a-mvp-for-less-than-20k/

Episode 2: Build a MVP for less than $20k

<p>I start by covering the theoretical do’s and don’ts of building a minimum viable product (MVP) before giving an in depth and specific example of how I would go about building a mobile golf application allowing golfers to find partners to play with at their handicap, in their region and/or club, with the same availability.</p> <p>I cover how to use various tools and services such as <a rel="noreferrer noopener" href="https://balsamiq.com/" target="_blank">Balsamiq</a>, <a rel="noreferrer noopener" href="https://www.awesomescreenshot.com/" target="_blank">Awesome Screenshot</a> and <a rel="noreferrer noopener" href="https://www.upwork.com/" target="_blank">Upwork</a>.</p> <figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper"> <iframe loading="lazy" title="Episode 2: Build a MVP for less than $20k" width="840" height="473" src="https://www.youtube.com/embed/2VXJNBt_grk?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe> </div></figure> <p>For your reference I am including the do’s and don’ts slide I used during the episode and embedding links to the PowerPoint presentation I used as well as the PDF output of the Balsamiq flow.</p> <center><figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/09/dosanddonts.png" alt="" class="wp-image-12673" width="977" height="555" srcset="https://fabricegrinda.com/wp-content/uploads/2020/09/dosanddonts.png 1953w, https://fabricegrinda.com/wp-content/uploads/2020/09/dosanddonts-768x436.png 768w, https://fabricegrinda.com/wp-content/uploads/2020/09/dosanddonts-1536x872.png 1536w, https://fabricegrinda.com/wp-content/uploads/2020/09/dosanddonts-1200x681.png 1200w, https://fabricegrinda.com/wp-content/uploads/2020/09/dosanddonts-1320x750.png 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></center> <div id="wppdfemb-frame-container-13695"><iframe id="wppdf-emb-iframe-13695" scrolling="no" data-pdf-index="2" class="pdfembed-iframe nonfullscreen" style="border: none; width:100%; max-width: 100%; min-height: 1000px;" src="https://fabricegrinda.com?pdfID=13695&#038;url=https%3A%2F%2Ffabricegrinda.com%2Fwp-content%2Fuploads%2F2020%2F09%2FBuild-a-MVP-for-less-than-20k.pdf&#038;index=2" ></iframe></div> <div id="wppdfemb-frame-container-13696"><iframe id="wppdf-emb-iframe-13696" scrolling="no" data-pdf-index="3" class="pdfembed-iframe nonfullscreen" style="border: none; width:100%; max-width: 100%; min-height: 1000px;" src="https://fabricegrinda.com?pdfID=13696&#038;url=https%3A%2F%2Ffabricegrinda.com%2Fwp-content%2Fuploads%2F2020%2F09%2FEpisode-2-Build-a-MVP-for-less-than-20k.pdf&#038;index=3" ></iframe></div> <p>If you prefer, you can listen to the episode in the embedded podcast player.</p> <figure><iframe loading="lazy" style="border: none" src="//html5-player.libsyn.com/embed/episode/id/16160669/height/90/theme/custom/thumbnail/yes/direction/forward/render-playlist/no/custom-color/000000/" height="90" width="100%" scrolling="no" allowfullscreen="" webkitallowfullscreen="" mozallowfullscreen="" oallowfullscreen="" msallowfullscreen=""></iframe></figure> <p>In addition to the above Youtube video and embedded podcast player, you can also listen to the podcast on:</p> <ul><li>iTunes: <a href="https://podcasts.apple.com/us/podcast/build-a-mvp-for-less-than-$20k/id1532336635?i=1000492558387" target="_blank" rel="noreferrer noopener">https://podcasts.apple.com/us/podcast/build-a-mvp-for-less-than-$20k/id1532336635?i=1000492558387</a></li><li>Spotify: <a href="https://open.spotify.com/show/1AlugHEyrxVPMm2wWN2UFJ" target="_blank" rel="noreferrer noopener">https://open.spotify.com/show/1AlugHEyrxVPMm2wWN2UFJ</a></li></ul> <p></p>

<p>I start by covering the theoretical do’s and don’ts of building a minimum viable product (MVP) before giving &hellip; <a href="https://fabricegrinda.com/playing-with-unicorns-episode-2-build-a-mvp-for-less-than-20k/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;Episode 2: Build a MVP for less than $20k&#8221;</span></a></p>

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Episode 2: Build a MVP for less than $20k. Categories - Playing with Unicorns. Date-Posted - 2020-09-27T13:38:31 . I start by covering the theoretical do’s and don’ts of building a minimum viable product (MVP) before giving an in depth and specific example of how I would go about building a mobile golf application allowing golfers to find partners to play with at their handicap, in their region and/or club, with the same availability. I cover how to use various tools and services such as Balsamiq, Awesome Screenshot and Upwork. For your reference I am including the do’s and don’ts slide I used during the episode and embedding links to the PowerPoint presentation I used as well as the PDF output of the Balsamiq flow. If you prefer, you can listen to the episode in the embedded podcast player. In addition to the above Youtube video and embedded podcast player, you can also listen to the podcast on: iTunes: https://podcasts.apple.com/us/podcast/build-a-mvp-for-less-than-$20k/id1532336635?i=1000492558387Spotify: https://open.spotify.com/show/1AlugHEyrxVPMm2wWN2UFJ

2020-09-19T15:03:52

2020-09-19T15:03:52

https://fabricegrinda.com/?p=12516

2022-04-20T17:49:14

2022-04-20T17:49:14

playing-with-unicorns-episode-1-fundraising

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https://fabricegrinda.com/playing-with-unicorns-episode-1-fundraising/

Episode 1: Fundraising

<p>Given that it&#8217;s episode 1, I start by explaining why I am creating this show before covering everything there is to know in terms of fundraising for venture backed startups: </p> <ul><li>Common mistakes when fundraising </li><li>The unwritten rules of venture capital</li><li>How and when to approach venture capitalists</li><li>Much more!</li></ul> <figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper"> <iframe loading="lazy" title="Episode 1: Fundraising - Everything there is to know in terms of fundraising for startups" width="840" height="473" src="https://www.youtube.com/embed/-U7srHwLAI8?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe> </div></figure> <p>For your reference I am including the two slides I used during the episode.</p> <center><figure class="wp-block-image is-resized size-large"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/09/VC-Risks-2.png" alt="" class="wp-image-12527" width="1406" height="799" srcset="https://fabricegrinda.com/wp-content/uploads/2020/09/VC-Risks-2.png 1875w, https://fabricegrinda.com/wp-content/uploads/2020/09/VC-Risks-2-768x436.png 768w, https://fabricegrinda.com/wp-content/uploads/2020/09/VC-Risks-2-1536x872.png 1536w, https://fabricegrinda.com/wp-content/uploads/2020/09/VC-Risks-2-1200x682.png 1200w, https://fabricegrinda.com/wp-content/uploads/2020/09/VC-Risks-2-1320x750.png 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></center> <center><figure class="wp-block-image is-resized size-large"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/09/Fundraising-1.png" alt="" class="wp-image-12535" width="1433" height="800" srcset="https://fabricegrinda.com/wp-content/uploads/2020/09/Fundraising-1.png 1911w, https://fabricegrinda.com/wp-content/uploads/2020/09/Fundraising-1-768x429.png 768w, https://fabricegrinda.com/wp-content/uploads/2020/09/Fundraising-1-1536x858.png 1536w, https://fabricegrinda.com/wp-content/uploads/2020/09/Fundraising-1-1200x670.png 1200w, https://fabricegrinda.com/wp-content/uploads/2020/09/Fundraising-1-1320x737.png 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></center> <p>If you prefer, you can listen to the episode in the embedded podcast player.</p> <figure><iframe loading="lazy" style="border: none" src="//html5-player.libsyn.com/embed/episode/id/16058120/height/90/theme/custom/thumbnail/yes/direction/backward/render-playlist/no/custom-color/000000/" height="90" width="100%" scrolling="no" allowfullscreen="" webkitallowfullscreen="" mozallowfullscreen="" oallowfullscreen="" msallowfullscreen=""></iframe></figure> <p>In addition to the above Youtube video and embedded podcast player, you can also listen to the podcast on:</p> <ul><li>iTunes:&nbsp;<a href="https://podcasts.apple.com/us/podcast/playing-with-unicorns/id1532336635" target="_blank" rel="noreferrer noopener">https://podcasts.apple.com/us/podcast/playing-with-unicorns/id1532336635</a></li><li>Spotify:&nbsp;<a rel="noreferrer noopener" href="https://open.spotify.com/episode/1wbcOc9P5SwWrOTcCRdkTg?si=vWrN9197Rv-ieK3H-COrBg" target="_blank">https://open.spotify.com/episode/1wbcOc9P5SwWrOTcCRdkTg?si=vWrN9197Rv-ieK3H-COrBg</a></li></ul> <p></p>

<p>Given that it&#8217;s episode 1, I start by explaining why I am creating this show before covering everything &hellip; <a href="https://fabricegrinda.com/playing-with-unicorns-episode-1-fundraising/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;Episode 1: Fundraising&#8221;</span></a></p>

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Episode 1: Fundraising. Categories - Playing with Unicorns. Date-Posted - 2020-09-19T15:03:52 . Given that it&#8217;s episode 1, I start by explaining why I am creating this show before covering everything there is to know in terms of fundraising for venture backed startups: Common mistakes when fundraising The unwritten rules of venture capitalHow and when to approach venture capitalistsMuch more! For your reference I am including the two slides I used during the episode. If you prefer, you can listen to the episode in the embedded podcast player. In addition to the above Youtube video and embedded podcast player, you can also listen to the podcast on: iTunes:&nbsp;https://podcasts.apple.com/us/podcast/playing-with-unicorns/id1532336635Spotify:&nbsp;https://open.spotify.com/episode/1wbcOc9P5SwWrOTcCRdkTg?si=vWrN9197Rv-ieK3H-COrBg

2020-09-16T03:04:39

2020-09-16T03:04:39

https://fabricegrinda.com/?p=12484

2023-09-08T05:11:14

2023-09-08T05:11:14

announcing-playing-with-unicorns

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https://fabricegrinda.com/announcing-playing-with-unicorns/

Announcing Playing With Unicorns

<p>Playing with unicorns is a new weekly live streaming show on startups, entrepreneurship, and venture capital. I will be streaming every Thursday at 12 pm EST on <a href="https://www.linkedin.com/in/fabricegrinda/" target="_blank" rel="noreferrer noopener">LinkedIn</a>, <a href="https://www.facebook.com/fabricegrinda" target="_blank" rel="noreferrer noopener">Facebook</a>, <a href="https://www.youtube.com/channel/UCsLbGXIKTv_RlpLHvhv2IFw" target="_blank" rel="noreferrer noopener">YouTube</a>, <a href="https://twitter.com/fabricegrinda" target="_blank" rel="noreferrer noopener">Twitter</a>, and <a href="https://www.twitch.tv/fabricegrinda" target="_blank" rel="noreferrer noopener">Twitch</a>. I will post the video to YouTube after each episode and the audio to the podcast section of Spotify and iTunes. I will also post every episode on my blog.</p> <p>I was asked to create a live streaming show and podcast many times over the last few years, but I was not inspired. Almost every show has a host interviewing amazing guests, with the same guests making the rounds on every show in their category. I did not want to be redundant with those efforts. On top of that, running FJ Labs is all encompassing. I did not feel I would have the time to put together an amazing roster and do a great job.</p> <p>Instead, as readers of my blog probably noticed, I became a guest on a wide range of podcasts and live streaming shows. It was fun and interesting, but with enough experience I realized that what was missing was a distilled version of the content. This was reinforced by the fact that most entrepreneurs and aspiring entrepreneurs I meet have a common set of questions that I find myself answering repeatedly: how to fundraise, how VCs evaluate startups, how to come up with a good startup idea etc.</p> <p>As a result, I thought it would be most valuable to cover a specific topic every week. I will share my perspective before opening it up to questions from the audience. This is not to say I will not have guests on the show, but when I do, it will mostly be for them to present something practical (e.g. how to test customer acquisition channels for a pre-launch idea to estimate customer acquisition cost), rather than a traditional interview where they share their story.</p> <p>The objective of this show is not to be mass market, but to help Internet entrepreneurs understand how to build scalable venture backed startups. I will try to be educational, even for those with limited experience in the startup world, when covering broader concepts like fundraising. However, I will also be more technical and detail oriented when doing deep dives on specific topics like “the future of food”, “how to match supply and demand in marketplaces” or “how to decide which business model to pick.”</p> <p>To have diversity in the content offering, I imagine that some weeks I will host “ask me anything” sessions, organize quick pitches that I react to, or just comment on happenings in the tech sector. I will also cover topics and ideas suggested by viewers. If some entrepreneurs are up for it, I would love to stream a company evaluation where I assess one of the startups pitching FJ Labs for funding.</p> <p>I expect the show duration to vary between 10 minutes and 1 hour. Note that this is unscripted, unedited, and self-produced, so do not expect high production values with jazzy effects. Instead, I will focus on providing valuable information to startup founders.</p> <p>I do not know how many episodes I will end up creating, but this should be a fun experiment and I cannot wait to see what comes of it. The first episode is Thursday, September 17 at 12 pm EST. I will cover fundraising.<br></p> <div class="wp-block-image"> <figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/09/image-promo-rec.png" alt="" class="wp-image-12492" width="540" height="360"/></figure></div> <p></p> <p>In the meantime, enjoy in introduction video for the show.</p> <p></p> <figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper"> <iframe loading="lazy" title="Playing WIth Unicorns" width="840" height="473" src="https://www.youtube.com/embed/-EJyuh5etmM?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe> </div></figure>

<p>Playing with unicorns is a new weekly live streaming show on startups, entrepreneurship, and venture capital. I will &hellip; <a href="https://fabricegrinda.com/announcing-playing-with-unicorns/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;Announcing Playing With Unicorns&#8221;</span></a></p>

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Announcing Playing With Unicorns. Categories - Playing with Unicorns. Date-Posted - 2020-09-16T03:04:39 . Playing with unicorns is a new weekly live streaming show on startups, entrepreneurship, and venture capital. I will be streaming every Thursday at 12 pm EST on LinkedIn, Facebook, YouTube, Twitter, and Twitch. I will post the video to YouTube after each episode and the audio to the podcast section of Spotify and iTunes. I will also post every episode on my blog. I was asked to create a live streaming show and podcast many times over the last few years, but I was not inspired. Almost every show has a host interviewing amazing guests, with the same guests making the rounds on every show in their category. I did not want to be redundant with those efforts. On top of that, running FJ Labs is all encompassing. I did not feel I would have the time to put together an amazing roster and do a great job. Instead, as readers of my blog probably noticed, I became a guest on a wide range of podcasts and live streaming shows. It was fun and interesting, but with enough experience I realized that what was missing was a distilled version of the content. This was reinforced by the fact that most entrepreneurs and aspiring entrepreneurs I meet have a common set of questions that I find myself answering repeatedly: how to fundraise, how VCs evaluate startups, how to come up with a good startup idea etc. As a result, I thought it would be most valuable to cover a specific topic every week. I will share my perspective before opening it up to questions from the audience. This is not to say I will not have guests on the show, but when I do, it will mostly be for them to present something practical (e.g. how to test customer acquisition channels for a pre-launch idea to estimate customer acquisition cost), rather than a traditional interview where they share their story. The objective of this show is not to be mass market, but to help Internet entrepreneurs understand how to build scalable venture backed startups. I will try to be educational, even for those with limited experience in the startup world, when covering broader concepts like fundraising. However, I will also be more technical and detail oriented when doing deep dives on specific topics like “the future of food”, “how to match supply and demand in marketplaces” or “how to decide which business model to pick.” To have diversity in the content offering, I imagine that some weeks I will host “ask me anything” sessions, organize quick pitches that I react to, or just comment on happenings in the tech sector. I will also cover topics and ideas suggested by viewers. If some entrepreneurs are up for it, I would love to stream a company evaluation where I assess one of the startups pitching FJ Labs for funding. I expect the show duration to vary between 10 minutes and 1 hour. Note that this is unscripted, unedited, and self-produced, so do not expect high production values with jazzy effects. Instead, I will focus on providing valuable information to startup founders. I do not know how many episodes I will end up creating, but this should be a fun experiment and I cannot wait to see what comes of it. The first episode is Thursday, September 17 at 12 pm EST. I will cover fundraising. In the meantime, enjoy in introduction video for the show.

2020-09-01T14:21:24

2020-09-01T14:21:24

https://fabricegrinda.com/?p=12421

2023-11-10T06:43:04

2023-11-10T06:43:04

my-friends-and-family-are-the-best

publish

post

https://fabricegrinda.com/my-friends-and-family-are-the-best/

My friends and family are the best!

<p>A few years ago, for my 40th birthday, they put this fantastic video together to celebrate our love and friendship. It was one of my favorite gifts ever. </p> <figure class="wp-block-embed-youtube wp-block-embed is-type-rich is-provider-embed-handler wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper"> <iframe loading="lazy" title="Fabrice&#039;s 40th Birthday Video" width="840" height="473" src="https://www.youtube.com/embed/bYUjFkRtikk?feature=oembed" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe> </div></figure> <p>This year, I thought no one could top the present I bought myself of a padel court in Turks given my love of padel.</p> <figure class="wp-block-image size-large is-style-default"><img loading="lazy" decoding="async" width="2548" height="1197" src="https://fabricegrinda.com/wp-content/uploads/2020/08/Group-2.jpg" alt="" class="wp-image-12446" srcset="https://fabricegrinda.com/wp-content/uploads/2020/08/Group-2.jpg 2548w, https://fabricegrinda.com/wp-content/uploads/2020/08/Group-2-768x361.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/08/Group-2-1536x722.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/08/Group-2-2048x962.jpg 2048w, https://fabricegrinda.com/wp-content/uploads/2020/08/Group-2-1200x564.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/08/Group-2-1320x620.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <p><br>But my friends are not to be underestimated. A few hours later they surprised me with this touching tribute video.</p> <p></p> <figure class="wp-block-embed-youtube wp-block-embed is-type-rich is-provider-embed-handler wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper"> <iframe loading="lazy" title="46th Birthday Tribute" width="840" height="473" src="https://www.youtube.com/embed/kINLiwige_c?feature=oembed" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe> </div></figure> <p>Then they presented me with this huge, loving birthday card.</p> <figure class="wp-block-image size-large is-style-default"><img loading="lazy" decoding="async" width="1920" height="2560" src="https://fabricegrinda.com/wp-content/uploads/2020/08/1-scaled.jpg" alt="" class="wp-image-12422" srcset="https://fabricegrinda.com/wp-content/uploads/2020/08/1-scaled.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/08/1-768x1024.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/08/1-1152x1536.jpg 1152w, https://fabricegrinda.com/wp-content/uploads/2020/08/1-1536x2048.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/08/1-1200x1600.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/08/1-1320x1760.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <figure class="wp-block-image size-large is-style-default"><img loading="lazy" decoding="async" width="1920" height="2560" src="https://fabricegrinda.com/wp-content/uploads/2020/08/2-scaled.jpg" alt="" class="wp-image-12423" srcset="https://fabricegrinda.com/wp-content/uploads/2020/08/2-scaled.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/08/2-768x1024.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/08/2-1152x1536.jpg 1152w, https://fabricegrinda.com/wp-content/uploads/2020/08/2-1536x2048.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/08/2-1200x1600.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/08/2-1320x1760.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <figure class="wp-block-image size-large is-style-default"><img loading="lazy" decoding="async" width="1920" height="2560" src="https://fabricegrinda.com/wp-content/uploads/2020/08/3-scaled.jpg" alt="" class="wp-image-12424" srcset="https://fabricegrinda.com/wp-content/uploads/2020/08/3-scaled.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/08/3-768x1024.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/08/3-1152x1536.jpg 1152w, https://fabricegrinda.com/wp-content/uploads/2020/08/3-1536x2048.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/08/3-1200x1600.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/08/3-1320x1760.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <figure class="wp-block-image size-large is-style-default"><img loading="lazy" decoding="async" width="1920" height="2560" src="https://fabricegrinda.com/wp-content/uploads/2020/08/4-scaled.jpg" alt="" class="wp-image-12425" srcset="https://fabricegrinda.com/wp-content/uploads/2020/08/4-scaled.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/08/4-768x1024.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/08/4-1152x1536.jpg 1152w, https://fabricegrinda.com/wp-content/uploads/2020/08/4-1536x2048.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/08/4-1200x1600.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/08/4-1320x1760.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <figure class="wp-block-image size-large is-style-default"><img loading="lazy" decoding="async" width="1920" height="2560" src="https://fabricegrinda.com/wp-content/uploads/2020/08/5-scaled.jpg" alt="" class="wp-image-12426" srcset="https://fabricegrinda.com/wp-content/uploads/2020/08/5-scaled.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/08/5-768x1024.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/08/5-1152x1536.jpg 1152w, https://fabricegrinda.com/wp-content/uploads/2020/08/5-1536x2048.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/08/5-1200x1600.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/08/5-1320x1760.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <figure class="wp-block-image size-large is-style-default"><img loading="lazy" decoding="async" width="1920" height="2560" src="https://fabricegrinda.com/wp-content/uploads/2020/08/6-scaled.jpg" alt="" class="wp-image-12427" srcset="https://fabricegrinda.com/wp-content/uploads/2020/08/6-scaled.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/08/6-768x1024.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/08/6-1152x1536.jpg 1152w, https://fabricegrinda.com/wp-content/uploads/2020/08/6-1536x2048.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/08/6-1200x1600.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/08/6-1320x1760.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <figure class="wp-block-image size-large is-style-default"><img loading="lazy" decoding="async" width="1920" height="2560" src="https://fabricegrinda.com/wp-content/uploads/2020/08/7-scaled.jpg" alt="" class="wp-image-12428" srcset="https://fabricegrinda.com/wp-content/uploads/2020/08/7-scaled.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/08/7-768x1024.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/08/7-1152x1536.jpg 1152w, https://fabricegrinda.com/wp-content/uploads/2020/08/7-1536x2048.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/08/7-1200x1600.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/08/7-1320x1760.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <figure class="wp-block-image size-large is-style-default"><img loading="lazy" decoding="async" width="1920" height="2560" src="https://fabricegrinda.com/wp-content/uploads/2020/08/8-scaled.jpg" alt="" class="wp-image-12429" srcset="https://fabricegrinda.com/wp-content/uploads/2020/08/8-scaled.jpg 1920w, https://fabricegrinda.com/wp-content/uploads/2020/08/8-768x1024.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/08/8-1152x1536.jpg 1152w, https://fabricegrinda.com/wp-content/uploads/2020/08/8-1536x2048.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/08/8-1200x1600.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/08/8-1320x1760.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <p><br>I was felt so loved I had tears of joy. Thank you I love you all!<br><br></p> <figure class="wp-block-image size-large is-style-default"><img loading="lazy" decoding="async" width="1491" height="637" src="https://fabricegrinda.com/wp-content/uploads/2020/08/Group23.jpg" alt="" class="wp-image-12475" srcset="https://fabricegrinda.com/wp-content/uploads/2020/08/Group23.jpg 1491w, https://fabricegrinda.com/wp-content/uploads/2020/08/Group23-768x328.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/08/Group23-1200x513.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/08/Group23-1320x564.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <p><br><br></p>

<p>A few years ago, for my 40th birthday, they put this fantastic video together to celebrate our love &hellip; <a href="https://fabricegrinda.com/my-friends-and-family-are-the-best/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;My friends and family are the best!&#8221;</span></a></p>

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My friends and family are the best!. Categories - Origin Story, Personal Musings. Date-Posted - 2020-09-01T14:21:24 . A few years ago, for my 40th birthday, they put this fantastic video together to celebrate our love and friendship. It was one of my favorite gifts ever. This year, I thought no one could top the present I bought myself of a padel court in Turks given my love of padel. But my friends are not to be underestimated. A few hours later they surprised me with this touching tribute video. Then they presented me with this huge, loving birthday card. I was felt so loved I had tears of joy. Thank you I love you all!

2020-08-24T14:26:27

2020-08-24T14:26:27

https://fabricegrinda.com/?p=12382

2023-11-17T13:48:02

2023-11-17T13:48:02

how-fj-labs-gets-its-deal-flow

publish

post

https://fabricegrinda.com/how-fj-labs-gets-its-deal-flow/

How FJ Labs gets its deal flow

<p class="has-text-align-left">FJ Labs gets deal flow from 4 sources:</p> <p>1. Other VCs<br>2. Entrepreneurs in our network<br>3. Cold inbound messages<br>4. Outbound outreach</p> <p>It is my understanding that many VCs, particularly junior ones, spend most of their time reaching out to startups they may want to invest in. They run scripts on LinkedIn to identify tech companies whose employee count is growing rapidly, have associates attend meetups and cold call startups that sound interesting.</p> <p>We are very privileged that we do not have to do this. We are once again helped by our focus on marketplaces. Given our domain expertise, most entrepreneurs who are building a marketplace want us involved in their startups. As a result, most of our work is reviewing inbound deal flow. Every week we receive around 100 deals and review around 50 of them. In 2019 for instance, we evaluated 2,542 companies which averages out to 49 per week. 32% of the deals we review come from other VCs, 32% comes from our entrepreneur network, 32% from cold inbound messages and only 4% from companies we reach out to directly.<br></p> <p class="has-text-align-center"></p> <div class="wp-block-image is-style-default"> <figure class="aligncenter size-large"><img loading="lazy" decoding="async" width="968" height="864" src="https://fabricegrinda.com/wp-content/uploads/2020/08/Group-11AAA.png" alt="" class="wp-image-12411" srcset="https://fabricegrinda.com/wp-content/uploads/2020/08/Group-11AAA.png 968w, https://fabricegrinda.com/wp-content/uploads/2020/08/Group-11AAA-768x685.png 768w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <p> <br></p> <div class="wp-block-image is-style-default"> <figure class="aligncenter size-large"><img loading="lazy" decoding="async" width="936" height="864" src="https://fabricegrinda.com/wp-content/uploads/2020/08/Group-45678.png" alt="" class="wp-image-12412" srcset="https://fabricegrinda.com/wp-content/uploads/2020/08/Group-45678.png 936w, https://fabricegrinda.com/wp-content/uploads/2020/08/Group-45678-768x709.png 768w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <p></p> <p class="has-text-align-center"></p> <p><strong>1. Deal Flow from other VCs</strong></p> <p>48% of the deals we invest in come from other VCs, highlighting the higher quality of this deal flow source in general. The reason we get so many deals from other VCs stems from <a href="https://fabricegrinda.com/fj-labs-investment-strategy/" target="_blank" rel="noreferrer noopener">FJ Labs’ investment strategy</a>. We do not lead or take board seats; we write small checks and have no minimum ownership requirement. As a result, we do not compete with VCs for allocation. Instead, they see us as friendly, value-added investors given our specificity and expertise when it comes to marketplaces.</p> <p>We do deal flow sharing calls with around 100 VCs every 8 weeks covering almost every stage and geography. We have a tailored approach where we present the right VCs to the right startups. The VCs love this because they get differentiated, tailored deal flow. The entrepreneurs love this because they get curated meetings with top VCs. We love this because the startups we care about get funded. Those VCs also invite us to co-invest with them in the marketplace deals they are evaluating, not only to get our perspective on the opportunity, but also to help the startup once the investment is made.</p> <p></p> <p><strong>2. Deal flow from entrepreneurs in our network</strong></p> <p>At this point we have invested in over 600 startups with 1,400 founders. These founders frequently come back to us when they raise money for their next startups (always a good sign that we are friendly, helpful investors), and introduce us to their friends and employees who become entrepreneurs.</p> <p>This is also part of the reason we offer FJ Labs founders the opportunity to co-invest alongside us in our <a href="https://angel.co/i/7TFhN" target="_blank" rel="noreferrer noopener">Entrepreneurs Fund</a>, a micro fund that we manage on AngelList. Our founders can diversify their exposure across the FJ Labs portfolio and are further incentivized to bring us their great deal flow in the process because they can share in the upside.</p> <p>This is the deal flow source that leads to most of our non-marketplace investments because if you were a successful entrepreneur for us in the past, we will back you regardless of what you build. For instance, this is how we ended up investing in <a href="http://www.flyarcher.com" target="_blank" rel="noreferrer noopener">Archer</a>, an electric VTOL aircraft startup. We previously backed Brett Adcock and Adam Goldstein in their labor marketplace startup <a href="http://www.vettery.com" target="_blank" rel="noreferrer noopener">Vettery</a> which was sold to Adecco. We were excited to back them in their new startup despite our lack of domain expertise in electric self-flying aircraft.</p> <p></p> <p><strong>3. Deal flow from cold inbound messages</strong></p> <p>I suspect that for most VCs, cold inbound emails are auto deleted or sent to a black hole where they are never reviewed. We take the time to review all messages sent to us and review deals that are appropriate.</p> <p>In full transparency, this is the typically our lowest quality deal flow channel, and accounts for most of the difference between the 100 deals we receive every week and the 50 that we review mostly because we are sent many deals that are potentially compelling but completely out of scope for us: biotech, hardware, even offline investment opportunities.</p> <p>The real number of “deals” we get is over 100, but unless you put enough information in your message to us to evaluate if we want to review the deal, we cannot even consider it as an opportunity. It is shocking the number of weekly messages we get that just say: “I have a great startup; do you want to review a deck?”</p> <p>But the reason we continue to keep this channel open is there have been diamonds in the rough that have led to some phenomenally successful investments. A surprisingly high 24% of our investments come from cold inbound outreach by the founders. Amazing companies such as <a href="https://smartasset.com/" target="_blank" rel="noreferrer noopener">SmartAsset </a>and <a href="https://www.meliuz.com.br/" target="_blank" rel="noreferrer noopener">Meliuz</a> (which seems to be <a href="https://finance.yahoo.com/news/brazilian-cash-back-provider-meliuz-193049378.html" target="_blank" rel="noreferrer noopener">considering an IPO</a>) came from cold inbound messages.&nbsp;&nbsp;</p> <p>Most cold inbound deals come to my Linkedin or email, but I also receive a fair amount on Facebook, Instagram, and Twitter. We used to have a startup submission form on my blog, but I pulled it down because the quality was too low.<br><br>We are not that hard to get an intro to, but if you want to reach out to us cold, the best way is to contact me on LinkedIn or by email. Make sure you tell us what you are building, how much traction you have and attach a deck.</p> <p></p> <p><strong>4. Outbound outreach</strong></p> <p>Because we are drinking at the firehose of our inbound deal flow, we do not spend much time reaching out to startups. Our outreach emanates from the brainstorms and deep dives that we do. Twice a year, I invite my FJ Labs colleagues to my house in Turks &amp; Caicos to think through ideas that do not exist that we should create or convince entrepreneurs to build. On average we come up with over 100 ideas each time (over 200 ideas per year!). Also, during the year different team members do sector analysis in line with their interests: logistics, proptech, etc. These exercises uncover a fair number of startups we were not aware of and reach out to. &nbsp;</p> <p></p> <p><strong>Conclusion</strong></p> <p>This post is more for your information to share how we operate rather than meant to have a specific so-what. However, it should be helpful for entrepreneurs thinking about how to reach out to us. Likewise, if you are a new venture capitalist, my recommendation would be for you to build a brand around a certain sector or category such that people want you in those deals so you can allocate less of your time to outbound outreach.</p>

<p>FJ Labs gets deal flow from 4 sources: 1. Other VCs2. Entrepreneurs in our network3. Cold inbound messages4. &hellip; <a href="https://fabricegrinda.com/how-fj-labs-gets-its-deal-flow/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;How FJ Labs gets its deal flow&#8221;</span></a></p>

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How FJ Labs gets its deal flow. Categories - Featured Posts, FJ Labs, FJ Labs. Date-Posted - 2020-08-24T14:26:27 . FJ Labs gets deal flow from 4 sources: 1. Other VCs2. Entrepreneurs in our network3. Cold inbound messages4. Outbound outreach It is my understanding that many VCs, particularly junior ones, spend most of their time reaching out to startups they may want to invest in. They run scripts on LinkedIn to identify tech companies whose employee count is growing rapidly, have associates attend meetups and cold call startups that sound interesting. We are very privileged that we do not have to do this. We are once again helped by our focus on marketplaces. Given our domain expertise, most entrepreneurs who are building a marketplace want us involved in their startups. As a result, most of our work is reviewing inbound deal flow. Every week we receive around 100 deals and review around 50 of them. In 2019 for instance, we evaluated 2,542 companies which averages out to 49 per week. 32% of the deals we review come from other VCs, 32% comes from our entrepreneur network, 32% from cold inbound messages and only 4% from companies we reach out to directly. 1. Deal Flow from other VCs 48% of the deals we invest in come from other VCs, highlighting the higher quality of this deal flow source in general. The reason we get so many deals from other VCs stems from FJ Labs’ investment strategy. We do not lead or take board seats; we write small checks and have no minimum ownership requirement. As a result, we do not compete with VCs for allocation. Instead, they see us as friendly, value-added investors given our specificity and expertise when it comes to marketplaces. We do deal flow sharing calls with around 100 VCs every 8 weeks covering almost every stage and geography. We have a tailored approach where we present the right VCs to the right startups. The VCs love this because they get differentiated, tailored deal flow. The entrepreneurs love this because they get curated meetings with top VCs. We love this because the startups we care about get funded. Those VCs also invite us to co-invest with them in the marketplace deals they are evaluating, not only to get our perspective on the opportunity, but also to help the startup once the investment is made. 2. Deal flow from entrepreneurs in our network At this point we have invested in over 600 startups with 1,400 founders. These founders frequently come back to us when they raise money for their next startups (always a good sign that we are friendly, helpful investors), and introduce us to their friends and employees who become entrepreneurs. This is also part of the reason we offer FJ Labs founders the opportunity to co-invest alongside us in our Entrepreneurs Fund, a micro fund that we manage on AngelList. Our founders can diversify their exposure across the FJ Labs portfolio and are further incentivized to bring us their great deal flow in the process because they can share in the upside. This is the deal flow source that leads to most of our non-marketplace investments because if you were a successful entrepreneur for us in the past, we will back you regardless of what you build. For instance, this is how we ended up investing in Archer, an electric VTOL aircraft startup. We previously backed Brett Adcock and Adam Goldstein in their labor marketplace startup Vettery which was sold to Adecco. We were excited to back them in their new startup despite our lack of domain expertise in electric self-flying aircraft. 3. Deal flow from cold inbound messages I suspect that for most VCs, cold inbound emails are auto deleted or sent to a black hole where they are never reviewed. We take the time to review all messages sent to us and review deals that are appropriate. In full transparency, this is the typically our lowest quality deal flow channel, and accounts for most of the difference between the 100 deals we receive every week and the 50 that we review mostly because we are sent many deals that are potentially compelling but completely out of scope for us: biotech, hardware, even offline investment opportunities. The real number of “deals” we get is over 100, but unless you put enough information in your message to us to evaluate if we want to review the deal, we cannot even consider it as an opportunity. It is shocking the number of weekly messages we get that just say: “I have a great startup; do you want to review a deck?” But the reason we continue to keep this channel open is there have been diamonds in the rough that have led to some phenomenally successful investments. A surprisingly high 24% of our investments come from cold inbound outreach by the founders. Amazing companies such as SmartAsset and Meliuz (which seems to be considering an IPO) came from cold inbound messages.&nbsp;&nbsp; Most cold inbound deals come to my Linkedin or email, but I also receive a fair amount on Facebook, Instagram, and Twitter. We used to have a startup submission form on my blog, but I pulled it down because the quality was too low.We are not that hard to get an intro to, but if you want to reach out to us cold, the best way is to contact me on LinkedIn or by email. Make sure you tell us what you are building, how much traction you have and attach a deck. 4. Outbound outreach Because we are drinking at the firehose of our inbound deal flow, we do not spend much time reaching out to startups. Our outreach emanates from the brainstorms and deep dives that we do. Twice a year, I invite my FJ Labs colleagues to my house in Turks &amp; Caicos to think through ideas that do not exist that we should create or convince entrepreneurs to build. On average we come up with over 100 ideas each time (over 200 ideas per year!). Also, during the year different team members do sector analysis in line with their interests: logistics, proptech, etc. These exercises uncover a fair number of startups we were not aware of and reach out to. &nbsp; Conclusion This post is more for your information to share how we operate rather than meant to have a specific so-what. However, it should be helpful for entrepreneurs thinking about how to reach out to us. Likewise, if you are a new venture capitalist, my recommendation would be for you to build a brand around a certain sector or category such that people want you in those deals so you can allocate less of your time to outbound outreach.

2020-07-10T15:40:09

2020-07-10T15:40:09

https://fabricegrinda.com/?p=12144

2021-05-28T05:56:34

2021-05-28T05:56:34

how-to-build-and-invest-in-marketplace-startups-with-grace-gong

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https://fabricegrinda.com/how-to-build-and-invest-in-marketplace-startups-with-grace-gong/

How to build and invest in marketplace startups with Grace Gong

<p>Grace Gong invited me to her podcast. We discuss: &nbsp;</p> <ul><li>Creating a better marketplace platform&nbsp;</li><li>Making better investments in marketplace platforms&nbsp;</li><li>Mastering your investment thesis as a VC, selling your company to (other) investors&nbsp;</li><li>Taking 1 action will make your life better&nbsp;</li></ul> <p></p> <figure><iframe loading="lazy" src="//html5-player.libsyn.com/embed/episode/id/14794151/height/90/theme/custom/thumbnail/yes/direction/forward/render-playlist/no/custom-color/000000/" allowfullscreen="" width="100%" height="90"></iframe></figure> <p>In addition to the embeded player, you can also listen to the podcast on:</p> <ul><li>iTunes: <a aria-label="undefined (opens in a new tab)" href="https://podcasts.apple.com/us/podcast/3-fabrice-grinda/id1518240964?i=1000477718723" target="_blank" rel="noreferrer noopener">https://podcasts.apple.com/us/podcast/3-fabrice-grinda/id1518240964?i=1000477718723</a></li></ul> <ul><li>Spotify: <a href="https://open.spotify.com/episode/0x7C57Xa25CKHqMtl1wZl6" target="_blank" rel="noreferrer noopener">https://open.spotify.com/episode/0x7C57Xa25CKHqMtl1wZl6</a></li></ul>

<p>Grace Gong invited me to her podcast. We discuss: &nbsp; Creating a better marketplace platform&nbsp; Making better investments &hellip; <a href="https://fabricegrinda.com/how-to-build-and-invest-in-marketplace-startups-with-grace-gong/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;How to build and invest in marketplace startups with Grace Gong&#8221;</span></a></p>

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How to build and invest in marketplace startups with Grace Gong. Categories - Entrepreneurship, Interviews &amp; Fireside Chats, Marketplaces. Date-Posted - 2020-07-10T15:40:09 . Grace Gong invited me to her podcast. We discuss: &nbsp; Creating a better marketplace platform&nbsp;Making better investments in marketplace platforms&nbsp;Mastering your investment thesis as a VC, selling your company to (other) investors&nbsp;Taking 1 action will make your life better&nbsp; In addition to the embeded player, you can also listen to the podcast on: iTunes: https://podcasts.apple.com/us/podcast/3-fabrice-grinda/id1518240964?i=1000477718723 Spotify: https://open.spotify.com/episode/0x7C57Xa25CKHqMtl1wZl6

2020-06-30T18:20:48

2020-06-30T18:20:48

https://fabricegrinda.com/?p=12061

2023-11-17T13:47:55

2023-11-17T13:47:55

fj-labs-investment-strategy

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https://fabricegrinda.com/fj-labs-investment-strategy/

FJ Labs’ Investment Strategy

<p>FJ Labs’ investment approach stems from its roots (read <a href="https://fabricegrinda.com/the-genesis-of-fj-labs/" target="_blank" rel="noreferrer noopener">The Genesis of FJ Labs</a>). FJ Labs is the extension of Jose’s and my angel investing activities. We scaled our activities and processes, but we did not change the strategy.</p> <p>Most venture capital funds have very well-defined portfolio construction. They invest the funds they raised over a specific period, in a specific type of company, in a specific number of companies, investing a specific investment amount, at a specific stage, in a specific geography. These funds lead rounds and the partners take board seats. They reserve a certain amount of capital for follow-ons and typically do follow-on. Fund rules are such that subsequent funds cannot invest in the companies from the prior fund. The fund does extensive due diligence and invests in less than 7 deals per year.</p> <p>A typical $175 million dollar VC fund may look like this:<br></p> <ul> <li>US only</li> <li>Series A focus</li> <li>B2B SAAS companies only</li> <li>Invests $5-7M Series A lead checks</li> <li>Targeting investing in 20 companies over a 3-year period</li> <li>40% of the capital reserved for follow-ons</li> <li>Follow-on in most of the portfolio companies</li> <li>Partners take board seats</li> <li>Investments take 2-4 months from first meeting</li> </ul> <p>FJ Labs does not operate this way. As we did when we were angels, we evaluate all the companies in our pipeline, and we invest in those we like. We decide whether we invest or not based on two 60-minute calls over the course of a week or two. We do not lead, and we do not take board seats. In other words, you could say <strong>we invest at any stage, in any geography, in any industry with extremely limited due diligence</strong>. Those are the very words that scared away institutional investors and made us think we would never raise a fund.</p> <p>Given this “strategy,” you might expect that our portfolio composition would vary dramatically over time. In fact, it has been very consistent over the years. There are several reasons for this.</p> <ol> <li><strong>The number of deals we evaluate weekly has been remarkably consistent over the years</strong></li> </ol> <p>I will detail how FJ Labs gets deal flow in a subsequent blog post. But to give you a sense of scale, we receive over 100 investment opportunities every week. However, we do not evaluate all of those. Many are clearly out of scope: hardware, AI, space tech, biotech, etc. without a marketplace component. Many others are too vague: “I have a great online investment opportunity; do you want to receive a deck?”</p> <p>If you do not make the effort to realize we focus on online marketplaces and include enough information for us to evaluate whether or not we want to dig further into the deal, we will not reply or follow-up. <br><br>On average, we evaluate 40-50 deals every week. In 2019 for instance, we evaluated 2,542 companies which averages out to 49 per week.</p> <p>2. <strong>The percentage of deals we invest in has been largely constant</strong></p> <p>There is a lot of specificity that goes into “we invest in companies we like.” We have extremely specific evaluation criteria and investment theses that we keep refining. I will detail those in subsequent blog posts. While we invest in every industry, in every geography and at every stage, we do have a specificity: we invest in marketplaces.</p> <p>Over the years we have been investing in around 3% of the deals we evaluate. In 2019 for instance we made 83 first time investments. In other words, we invested in 3.3% of the 2,542 deals we evaluated.</p> <p>3. <strong>The distribution of deals we receive is not random and consistent over time</strong></p> <p>In general, there are many more pre-seed and seed deals than Series A and Series B deals. In turn there are more Series A &amp; B deals than later stage deals. On top of that, because we are known as angel investors who write relatively small checks, we receive disproportionately earlier stage deals that later stage deals. As a result, most of our investments are seed stage or earlier though the number of Series A has been increasing in recent years. &nbsp;</p> <div class="wp-block-image"> <figure class="aligncenter size-full is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2022/09/A9DD9217-8532-4C59-90DB-32D6A1EEC419.png" alt="" class="wp-image-18900" width="534" height="388" srcset="https://fabricegrinda.com/wp-content/uploads/2022/09/A9DD9217-8532-4C59-90DB-32D6A1EEC419.png 907w, https://fabricegrinda.com/wp-content/uploads/2022/09/A9DD9217-8532-4C59-90DB-32D6A1EEC419-768x559.png 768w" sizes="(max-width: 534px) 85vw, 534px" /></figure></div> <p>4. <strong>While we evaluate deals from any country, we have specific preferences</strong></p> <p>While we are global investors, we are New York based and most of the marketplace innovation is coming out of the US. As a result, most of our deal flow comes from the US and most of our investments are in the US. At the same time, Jose lives in London and I am French, so we get a lot of European deal flow. Given OLX’s global footprint, I am also very visible in many emerging markets.</p> <p>While we evaluate deals in all countries, when we look at startups in emerging markets, we focus on large markets that have more robust venture ecosystems and financial markets. These days this mostly means Brazil and India. That is not to say we will never invest in smaller markets. We invested in Rappi in Columbia, Yassir in Algeria and Lori Systems in Kenya for instance, but the bar to us investing is a lot higher.</p> <p>The main issue in smaller emerging markets is the lack of Series A &amp; B capital and the lack of exits. There are rich locals that will angel invest in almost every country in the world. Also if you break out, which typically means over $100 million in revenues and $100 million in valuation, US global funds like Tiger Global will find you to invest (at what would typically be a Series C) wherever you are located.</p> <p>However, most smaller markets do not have Series A &amp; B investors making it ridiculously hard for companies to get from seed to breakout status, especially if the domestic market is small. Worse there are few exits for those companies, even the successful ones, because the countries they are in are not in the priority list for the large global acquirers.</p> <p>To date 58% of our investments have been in the US and Canada (mostly the US), 25% in Europe, 6% in Brazil, 2% in India and all other countries combine account for 9%.</p> <div class="wp-block-image"> <figure class="aligncenter size-full is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2022/09/B6225A08-5305-45FD-8A5B-9F3F101FD754_1_105_c.jpeg" alt="" class="wp-image-18894" width="551" height="400" srcset="https://fabricegrinda.com/wp-content/uploads/2022/09/B6225A08-5305-45FD-8A5B-9F3F101FD754_1_105_c.jpeg 1044w, https://fabricegrinda.com/wp-content/uploads/2022/09/B6225A08-5305-45FD-8A5B-9F3F101FD754_1_105_c-768x558.jpeg 768w" sizes="(max-width: 551px) 85vw, 551px" /></figure></div> <div class="wp-block-image"> <figure class="aligncenter size-full is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2022/09/86DFDF7B-C183-4043-95A8-5FBA050BC180_1_105_c.jpeg" alt="" class="wp-image-18895" width="555" height="403" srcset="https://fabricegrinda.com/wp-content/uploads/2022/09/86DFDF7B-C183-4043-95A8-5FBA050BC180_1_105_c.jpeg 1054w, https://fabricegrinda.com/wp-content/uploads/2022/09/86DFDF7B-C183-4043-95A8-5FBA050BC180_1_105_c-768x558.jpeg 768w" sizes="(max-width: 555px) 85vw, 555px" /></figure></div> <p>Beyond this, we have a few other guiding principles.<br><br><strong>A. We focus on marketplaces</strong></p> <p>My fascination with marketplaces stems from my early fascination with economics. I discovered Adam Smith and David Ricardo in my teens. Their work resonated with me because it explained how the world was structured better than anything else I encountered. This is why I studied economics at Princeton, which further grew my interest in market design and incentive systems.</p> <p>When I graduated in 1996, I did not think it would lead to anything practical. As a shy, introverted 21-year-old I went to work for McKinsey for two years. Even though I wanted to be an Internet entrepreneur, I felt McKinsey would be the equivalent of business school, except they paid me. Two years later I felt I had learned what I came to learn and was ready to venture into the world of entrepreneurship.</p> <p>As I started thinking through ideas of companies I could build, I realized many were not appropriate for an inexperienced 23-year-old. Building Amazon-type companies required managing complex supply chains. Etrade type companies required obtaining brokerage or banking licenses. Most ideas were also massively capital intensive. When I ran into the eBay website, it was love at first click. I immediately recognized the extraordinary amount of value that could be created by bringing transparency and liquidity to the previously opaque and fragmented markets for collectibles and used goods that were mostly traded in garage sales offline. I also realized how capital efficient the model would be as it unleashed powerful network effects with ever more buyers bringing every more sellers who in turn bring every more buyers. Moreover, I knew I could build it. Building a site like eBay has its own complexity in terms of solving the chicken and egg problem of figuring out what to start with and how to monetize, but it was the type of complexity that I felt perfectly suited to deal with.</p> <p>I founded Aucland, a European online auction site, in July 1998. I ended up building it into one of the largest online auction sites in Europe before it merged with a publicly traded competitor, QXL Ricardo. Funnily enough they were much later acquired by Naspers (as OLX would eventually also be). While running Aucland, I was introduced to a group of Harvard and Stanford grads by a McKinsey colleague. I confirmed their belief they should launch an eBay-like site in Latin America and agreed to provide them with the technology and business plan to do so. Deremate was born and became one of the leading auction sites in Latin America until it merged with MercadoLibre prior to its IPO.</p> <p>I loved building Aucland. I loved the nuance of matching supply and demand on a category by category basis and building a real community of users. After the Internet bubble popped, I built Zingy, a ringtone company, because I wanted to be an entrepreneur and felt I could build a profitable and successful startup in a world with no venture capital. However, it was not true love. It was a means to an end. I made it profitable, grew it to $200M in revenues before selling it for $80M. I could now return to marketplaces.</p> <p>In the intervening years I had seen both the rise of Craigslist and the first vertical marketplaces like Stubhub and Elance (now Upwork). I was excited to build OLX. It was the company I was meant to build. It’s what Craigslist would be if it was run well: mobile first with fully moderated content, no spam, scam, prostitution, personals and murders, catering to women, who are the primary decision makers in all household purchases. It now serves over 350 million users every month in 30 countries in mostly emerging markets where it is part of the fabric of society. It allows millions of people to make a living and improves daily lives while being free to use.</p> <p>OLX allowed me to further my craft and further fall in love with the beauty and elegance of marketplaces. As I was busy running OLX with its hundreds of employees around the world, I decided to focus on marketplaces as an angel investor as I felt uniquely positioned to make rapid investment decisions.</p> <p>This specialization created its own network effect. Becoming well known as a marketplace investor improved my deal flow in marketplaces, improved my pattern recognition and allowed me to develop more robust thesis and heuristics. As FJ Labs evolved from Jose and my angel investing activities, we simply kept going down the marketplace path we were already on.</p> <p>In 2020, marketplaces remain as relevant as ever. We are still at the beginning of the technology revolution and marketplaces will have a significant role to play in the decade to come and beyond.<br><br><strong>B. We decide quickly and transparently</strong></p> <p>As an entrepreneur I always hated how slow the fundraising process was and how time consuming it was. Weeks go by between meetings with venture capitalists if only because they use time as an element of due diligence. Entrepreneurs must be very thoughtful about running a tight process in order get term sheets at the same time to create the right amount of FOMO. Entrepreneurs rarely know where they stand. VCs who are not interested may just ghost them or be terribly slow rather than outright pass on the investment to preserve the optionality of changing their mind.</p> <p>It drove me nuts as an entrepreneur and I decided to do the opposite as an angel. I opted for radical transparency and honesty. Because I was so busy running the day to day operations of OLX, I devised a strategy to evaluate startups based on a 1-hour call. On the 1-hour call or meeting I would tell the entrepreneurs if I was investing and why. In 97% of the cases I passed on the opportunity and would tell them what would need to improve to change my mind.</p> <p>We did not change the process much for FJ Labs, though we refined it in a way that allows us to evaluate more deals and be more scalable. Most startups are first reviewed by a FJ team member who presents their recommendation on our Tuesday investment committee meeting. If warranted Jose or I take a second call after which we make our investment decision. In other words, entrepreneurs get an investment decision after at most 2 calls over 2 weeks. If we choose not to invest, we tell them why and what would need to change for us to change our mind.</p> <p>If I am on the first call, I still often make the investment decision at the end of the meeting to the shock of the entrepreneur. I find it normal. After all we have clear investment heuristics and strategy and stand by our beliefs. I love clarity of purpose and thought.<br><br><strong>C. We do not lead deals&nbsp;</strong></p> <p>As angels we did not lead deals. When we started FJ Labs it never occurred to us to become traditional venture capitalists and to lead deals. We prefer meeting entrepreneurs, hearing their crazy ideas, and helping them realize those dreams. This allows us to avoid the legal and administrative work that comes from leading deals.</p> <p>Moreover, as angels we always saw VCs as our friends. We established strong relationships with many of them and started organizing regular calls to share deal flow. Our approach was super successful, and it did not make sense to change it. Leading deals would mean competing with VCs for allocation. There are many amazing deals we would not be able to participate in or be invited to. No one in their right mind would pick us over Sequoia if we were the type of VC that led deals. The beauty is that with current approach entrepreneurs do not need to pick. They can get both the lead VC of their choice and us. Right now, we invest in almost every company we want to, and we love it!<br><br><strong>D. We do not take board seats</strong></p> <p>In a way not taking board seats is the natural consequence of not leading, but we have fundamental reasons for not wanting to sit on boards. Objectively an investor cannot be on more than 10 boards effectively which is not compatible with our highly diversified approach. Worse, I observed that the companies that are failing end up needing way more work and time. In other words, you end up allocating all your time to help the companies going from 1 to 0&nbsp; and almost none of your time on the companies that are doing the best and are going from 1 to 100. Instead you should be ignoring the companies going from 1 to 0 and spending your time thinking how to create the most value for your rocket ships.</p> <p>There is also a certain formality and rigidity to board meetings that prevent them from getting to the heart of the matter. Both as an entrepreneur and an investor the most meaningful strategic discussions I ever had were informal 1 on 1 coffee chats rather than formal board meetings. I have been told countless times that the conversation I had with an entrepreneur was the most meaningful they ever had.</p> <p>Note that not taking board seats does not mean we are merely passive investors. The value we provide takes a different form.<br><br><strong>E. Our main value add is to help with fundraising, with offline advertising and to think through marketplace dynamics</strong></p> <p>Many funds with billions of assets under management have fully fledged platform teams with lots of venture partners. They have headhunters and experts in various areas to help portfolio companies. We do not have the resources to do all those things. Instead we decided to focus on three differentiated ways of helping.</p> <p>First and foremost, we help startups raise. We either help them complete their existing round or raise future rounds. Ultimately, FJ Labs is not setting the terms of the round. We just want the companies we love to get funded. We do deal flow sharing calls with around 100 VCs every 8 weeks covering almost every stage and geography. We have a tailored approach where we present the right VCs to the right startups. The VCs love it because they get differentiated tailored deal flow. The entrepreneurs love it because they get meetings with top VCs. We love it because the startups we care about get funded.</p> <p>Prior to the entrepreneur going out to market, we try to do a catch-up call to give them feedback on where they stand and review their deck and pitch. When we feel they are ready, we make the relevant intros.</p> <p>We can also help think through marketplace dynamics. Should you start with the supply or demand side? How local should you be? Should the rake be 1%, 5%, 15% or 50%? Should the rake be taken on the supply side or the demand side? Should you provide extra services to one side of the market? We see so many marketplaces that we have developed a lot of pattern recognition and can help think through core strategic issues.</p> <p>Lastly, we can help portfolio companies with their offline advertising, especially TV advertising. William Guillouard, one of our Venture Partners was Chief Marketing Officer at OLX where we spent over $500 million in TV advertising. We developed methods to run TV campaigns the way we run online campaigns with attribution models and LTV to CAC analysis. In several cases, we successfully scaled companies rapidly though TV with better unit economics than through Google and Facebook. Obviously, this only applies to a small subset of portfolio companies which are mass market, have good unit economics and enough scale to justify trying TV, but for those companies it can be game changing.<br><br><strong>F. We have set check sizes by round</strong></p> <p>We do not want to be competing for allocation with traditional venture capitalists. We see ourselves as a value-added small co-investor alongside them and we want them to want to invite us to their best deals. This puts maximum check sizes we can deploy at every stage, especially seed stage. In a typical $3M seed round, the lead invests $1.5-2M. To be right-sized relative to the lead, we currently invest $390k at seed. We could probably deploy a bit more capital at each stage and might slightly increase our check sizes in the future if our fund gets a bit larger, but our investment size will always be small relative to that of the lead.</p> <p>In pre-seed there are often no funds investing. Rounds are often made up of a group of angels. In this case, we may very well be the largest investor with our $220k investment, but we just consider ourselves to be one of the angels rather than a real lead.</p> <p>We also invest $220 “fliers” in companies we find compelling but are not comfortable investing our standard allocation. We do this for a variety of reasons. Perhaps the valuation is a bit high, the unit economics not quite proven or the startup is in a business we find interesting but do not know much about.</p> <p>You can find our current standard allocations below.</p> <div class="wp-block-image is-style-default"> <figure class="aligncenter size-large"><img loading="lazy" decoding="async" width="736" height="534" src="https://fabricegrinda.com/wp-content/uploads/2020/06/image3.png" alt="" class="wp-image-12080"/></figure></div> <p><strong>G. We evaluate follow-ons on a standalone basis</strong></p> <p>The clear Silicon Valley motto is you double down on your winners regardless of price. We take objection to the second part of that statement. We have always been thoughtful about valuation and it has served us well. As I will&nbsp; detail in a subsequent blog post on FJ Labs’ evaluation criteria if we feel a startup’s valuation is too high relative to traction we do not invest even if we love the entrepreneur and business they are in.</p> <p>We evaluate follow-ons as though it was the first time we were investing in the business. To keep the evaluation objective, a different team member from the one who made the original investment recommendation does the analysis. The question we try to answer is the following: knowing what we now know about the team and business, would we invest in the company at this valuation?</p> <p>Depending on how strongly we feel about the answer to that question we try to do super pro-rata, pro-rata or merely pass on the investment. In the last few years, as more funds moved to later stages, we often felt our best companies became overvalued and we did not follow on at those later stages. To date, we followed on in 24% of our investments.</p> <p>Also, given our fund size, we often cannot afford to do our pro-ratas as they would represent most of the capital deployed. Worse given our small ownership percentage as the companies become later stage, we start losing information rights and no longer have visibility into how well the company is doing. As a result, when we feel the price is right, we sometimes sell 50% of our position in secondary transactions, typically selling to the lead VCs when a round is happening.</p> <p>In a way we are doing the exact opposite strategy of Silicon Valley: we sell our winners rather than double down on them. This explains why our realized IRR is so high. Part of the reason we seek secondaries is driven by our business model. Contrarily to large funds, we do not live from fees. We just reached our break-even point with FJ Labs. After years of having to subsidize our cost structure with millions of out of pocket investment, the management fees we collect now cover our expenses. However, we still have a way to go. Jose and I are not paying ourselves or reimbursing our expenses.</p> <p>Our business model is different. We make money from exits. We need the capital from successful exits to keep investing in new startups because we represent such a large percentage of the capital deployed. To date we represent $114 million of the $284 million deployed. We cannot afford to wait a decade for the final exit because we want to continue investing at the rate we have been investing.</p> <p>As you can imagine such secondary exits are only available in the absolute best companies. No one is interested in buying out positions in companies that are not doing well. Even in the best companies, we can only sell because we own small positions and are not on the board. There is no real signal coming from our willingness to sell other than our need for liquidity. In fact, we are often asked to sell as a favor rather than us seeking to sell. For instance, Andreesen, Greylock and Sequoia may all want to invest in a company at the Series B. The entrepreneur loves all 3 and does not want them to fund a competitor. The funds want at least 15% ownership each. The entrepreneur does not want 45% dilution. They do a primary round for 30% and organize a secondary for the rest. They ask us if we would mind selling part of our position in the secondary as a favor to get the round done.</p> <p>We thought long and hard about how much we should sell in these situations. In the end we opted for selling 50%. It provides us with liquidity and a great exit, while preserving lots of upside if the company does amazingly well. Our fund multiple would be higher if we held until the end, though our IRR would be lower. However, considering we essentially redeploy all the capital that we obtain from the exit into earlier stage companies where we feel there is more upside, our real multiple and IRR is higher when we pursue the secondary when you consider the return we get from the redeployment of the capital.</p> <p><strong>H.</strong> <strong>When the fund runs out of money, we just raise the next fund and follow-ons happen from the next fund</strong></p> <p>We do not follow traditional portfolio construction. The portfolio is just the sum of the individual investments and follow-on investments we make. The construct is completely bottoms-up. We just deploy the capital we have and when we run out of capital, we raise the next fund. We do modulate the investment sizes to make sure each fund is deployed over 2 to 3 years, but that is the extent of it.</p> <p>Given that we do not know whether we are going to follow-on, and we only follow-on in 24% of the cases, it does not make sense to reserve capital for follow-ons. Also, many of the follow-ons fall outside the 2 to 3-year capital deployment range of a fund. As a result, we told our LPs we would do follow-ons from whatever fund happens to be investing when we make the follow-on investment decision. We also tell them to invest in every fund to have the exact same exposure we do.</p> <p>Note that we would not sell the position from one fund to another. There is only one investment decision: we are investing, holding, or selling.</p> <p><strong>I. If you were successful for us in the past, we will back you in your new startup even if It is not a marketplace</strong></p> <p>We stick by the founders who do right by us. At this point we backed around 1,400 founders in 600 companies. 200 of them had exits and half of them were successful. Many of the successful founders went on to build new companies. For instance, this is how we ended up investing an Archer (<a href="http://www.flyarcher.com" target="_blank" rel="noreferrer noopener">www.flyarcher.com</a>), an electric VTOL aircraft startup. We backed Brett Adcock and Adam Goldstein in their labor marketplace startup Vettery which was sold to Adecco. We were excited to back them in their new startup despite our lack of domain expertise in electric self-flying aircrafts.</p> <p>In summary, while we do not have a set number of deals, stage or geography we intend to invest in every year, things play out such that we end up having an investment strategy that can be summarized as follows:</p> <ul> <li>Pre-Seed / Seed / Series A focus</li> <li>Set investments sizes per round that average to $400k</li> <li>Marketplace focus (70% of the deals)</li> <li>Global investors but with most of the deals in the US, followed by Western Europe, Brazil and India respectively</li> <li>100+ investments per year</li> <li>Investment decision 1-2 weeks after the first meeting</li> <li>We evaluate follow-ons on a standalone basis and follow-on on average in 24% of investments</li> <li>We do not reserve funds for follow-ons. We invest from whatever fund we happen to be deploying at the time of the investment</li> <li>We do not lead rounds</li> <li>We do not join boards</li> <li>We help portfolio companies fundraise</li> </ul> <p>To give you a sense of scale, our latest $175M fund will probably have over 500 investments. What is interesting is that while we did not do any modeling or portfolio construction, this highly diversified strategy seems to be by far the most effective. There is a very thoughtful <a href="https://angel.co/pdf/growth.pdf" target="_blank" rel="noreferrer noopener">paper by Abe Othman</a>, head of Data Science at AngelList that suggests that at seed the best strategy is to invest in every “credible” deal. It’s born out by <a href="https://angel.co/pdf/lp-performance.pdf" target="_blank" rel="noreferrer noopener">Angelist’s performance analysis for LPs</a> that clearly finds that “having investments in more companies tends to generate higher investment returns. On average, median returns per year increase 9.0 basis points and mean returns per year increase 6.9 basis points for each additional company that an LP is exposed to.”</p> <p>Our returns lead credence to the theory. As of April 30th, 2020, we invested $284 million in 571 startups. We had 193 exits with a 62% realized IRR. I suspect that diversification works well for several reasons:</p> <ul> <li>Venture returns follow a power law rather than a normal Gaussian distribution curve. It is essential to be in the companies that generate all the returns. Investing in more companies increases the probability that you hit the winners.</li> <li>Investing in more companies increases your profile as an investor, which in turn improves your deal flow. This is further strengthened if you establish a brand as the must have investor for a given category as we have in marketplaces.</li> <li>Evaluating more companies gives you more data to build pattern recognition to improve your investment criteria and thesis.</li> </ul> <p>The beauty of our strategy is that it is organic and bottom’s up. We evolve it over time as we observe conditions evolving whether they at the macro level, the venture capital industry or in technology specifically. For instance, a decade ago, we used to invest a lot in Turkey and Russia. After Putin invaded Georgia and annexed Crimea, and after Erdogan was elected in Turkey, we stopped investing in both countries as we correctly surmised that venture capital and exits would dry up. Likewise, before February 2018, we did not invest in pre-seed, often pre-launch companies. However, venture capital firms kept increasing their fund sizes. To deploy larger amounts of capital, those funds moved to later stages pushing up valuations at those stages as more capital was chasing the same number of deals. We felt it made sense to be contrarian and to move to earlier stages where capital was drying up. After seeing an increasing number of B2B marketplaces where the marketplace picked the supplier for the demand side, we evolved our marketplace investment thesis.</p> <p>It is going to be interesting how our strategy is going to evolve in the coming years. For instance, I can imagine a future where we differentiate our early stage strategy from our later stage strategy and create separate funds for those opportunities. Time will tell, all I know is that it is going to be fun!</p>

<p>FJ Labs’ investment approach stems from its roots (read The Genesis of FJ Labs). FJ Labs is the &hellip; <a href="https://fabricegrinda.com/fj-labs-investment-strategy/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;FJ Labs’ Investment Strategy&#8221;</span></a></p>

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FJ Labs’ Investment Strategy. Categories - Featured Posts, FJ Labs, FJ Labs. Date-Posted - 2020-06-30T18:20:48 . FJ Labs’ investment approach stems from its roots (read The Genesis of FJ Labs). FJ Labs is the extension of Jose’s and my angel investing activities. We scaled our activities and processes, but we did not change the strategy. Most venture capital funds have very well-defined portfolio construction. They invest the funds they raised over a specific period, in a specific type of company, in a specific number of companies, investing a specific investment amount, at a specific stage, in a specific geography. These funds lead rounds and the partners take board seats. They reserve a certain amount of capital for follow-ons and typically do follow-on. Fund rules are such that subsequent funds cannot invest in the companies from the prior fund. The fund does extensive due diligence and invests in less than 7 deals per year. A typical $175 million dollar VC fund may look like this: US only Series A focus B2B SAAS companies only Invests $5-7M Series A lead checks Targeting investing in 20 companies over a 3-year period 40% of the capital reserved for follow-ons Follow-on in most of the portfolio companies Partners take board seats Investments take 2-4 months from first meeting FJ Labs does not operate this way. As we did when we were angels, we evaluate all the companies in our pipeline, and we invest in those we like. We decide whether we invest or not based on two 60-minute calls over the course of a week or two. We do not lead, and we do not take board seats. In other words, you could say we invest at any stage, in any geography, in any industry with extremely limited due diligence. Those are the very words that scared away institutional investors and made us think we would never raise a fund. Given this “strategy,” you might expect that our portfolio composition would vary dramatically over time. In fact, it has been very consistent over the years. There are several reasons for this. The number of deals we evaluate weekly has been remarkably consistent over the years I will detail how FJ Labs gets deal flow in a subsequent blog post. But to give you a sense of scale, we receive over 100 investment opportunities every week. However, we do not evaluate all of those. Many are clearly out of scope: hardware, AI, space tech, biotech, etc. without a marketplace component. Many others are too vague: “I have a great online investment opportunity; do you want to receive a deck?” If you do not make the effort to realize we focus on online marketplaces and include enough information for us to evaluate whether or not we want to dig further into the deal, we will not reply or follow-up. On average, we evaluate 40-50 deals every week. In 2019 for instance, we evaluated 2,542 companies which averages out to 49 per week. 2. The percentage of deals we invest in has been largely constant There is a lot of specificity that goes into “we invest in companies we like.” We have extremely specific evaluation criteria and investment theses that we keep refining. I will detail those in subsequent blog posts. While we invest in every industry, in every geography and at every stage, we do have a specificity: we invest in marketplaces. Over the years we have been investing in around 3% of the deals we evaluate. In 2019 for instance we made 83 first time investments. In other words, we invested in 3.3% of the 2,542 deals we evaluated. 3. The distribution of deals we receive is not random and consistent over time In general, there are many more pre-seed and seed deals than Series A and Series B deals. In turn there are more Series A &amp; B deals than later stage deals. On top of that, because we are known as angel investors who write relatively small checks, we receive disproportionately earlier stage deals that later stage deals. As a result, most of our investments are seed stage or earlier though the number of Series A has been increasing in recent years. &nbsp; 4. While we evaluate deals from any country, we have specific preferences While we are global investors, we are New York based and most of the marketplace innovation is coming out of the US. As a result, most of our deal flow comes from the US and most of our investments are in the US. At the same time, Jose lives in London and I am French, so we get a lot of European deal flow. Given OLX’s global footprint, I am also very visible in many emerging markets. While we evaluate deals in all countries, when we look at startups in emerging markets, we focus on large markets that have more robust venture ecosystems and financial markets. These days this mostly means Brazil and India. That is not to say we will never invest in smaller markets. We invested in Rappi in Columbia, Yassir in Algeria and Lori Systems in Kenya for instance, but the bar to us investing is a lot higher. The main issue in smaller emerging markets is the lack of Series A &amp; B capital and the lack of exits. There are rich locals that will angel invest in almost every country in the world. Also if you break out, which typically means over $100 million in revenues and $100 million in valuation, US global funds like Tiger Global will find you to invest (at what would typically be a Series C) wherever you are located. However, most smaller markets do not have Series A &amp; B investors making it ridiculously hard for companies to get from seed to breakout status, especially if the domestic market is small. Worse there are few exits for those companies, even the successful ones, because the countries they are in are not in the priority list for the large global acquirers. To date 58% of our investments have been in the US and Canada (mostly the US), 25% in Europe, 6% in Brazil, 2% in India and all other countries combine account for 9%. Beyond this, we have a few other guiding principles.A. We focus on marketplaces My fascination with marketplaces stems from my early fascination with economics. I discovered Adam Smith and David Ricardo in my teens. Their work resonated with me because it explained how the world was structured better than anything else I encountered. This is why I studied economics at Princeton, which further grew my interest in market design and incentive systems. When I graduated in 1996, I did not think it would lead to anything practical. As a shy, introverted 21-year-old I went to work for McKinsey for two years. Even though I wanted to be an Internet entrepreneur, I felt McKinsey would be the equivalent of business school, except they paid me. Two years later I felt I had learned what I came to learn and was ready to venture into the world of entrepreneurship. As I started thinking through ideas of companies I could build, I realized many were not appropriate for an inexperienced 23-year-old. Building Amazon-type companies required managing complex supply chains. Etrade type companies required obtaining brokerage or banking licenses. Most ideas were also massively capital intensive. When I ran into the eBay website, it was love at first click. I immediately recognized the extraordinary amount of value that could be created by bringing transparency and liquidity to the previously opaque and fragmented markets for collectibles and used goods that were mostly traded in garage sales offline. I also realized how capital efficient the model would be as it unleashed powerful network effects with ever more buyers bringing every more sellers who in turn bring every more buyers. Moreover, I knew I could build it. Building a site like eBay has its own complexity in terms of solving the chicken and egg problem of figuring out what to start with and how to monetize, but it was the type of complexity that I felt perfectly suited to deal with. I founded Aucland, a European online auction site, in July 1998. I ended up building it into one of the largest online auction sites in Europe before it merged with a publicly traded competitor, QXL Ricardo. Funnily enough they were much later acquired by Naspers (as OLX would eventually also be). While running Aucland, I was introduced to a group of Harvard and Stanford grads by a McKinsey colleague. I confirmed their belief they should launch an eBay-like site in Latin America and agreed to provide them with the technology and business plan to do so. Deremate was born and became one of the leading auction sites in Latin America until it merged with MercadoLibre prior to its IPO. I loved building Aucland. I loved the nuance of matching supply and demand on a category by category basis and building a real community of users. After the Internet bubble popped, I built Zingy, a ringtone company, because I wanted to be an entrepreneur and felt I could build a profitable and successful startup in a world with no venture capital. However, it was not true love. It was a means to an end. I made it profitable, grew it to $200M in revenues before selling it for $80M. I could now return to marketplaces. In the intervening years I had seen both the rise of Craigslist and the first vertical marketplaces like Stubhub and Elance (now Upwork). I was excited to build OLX. It was the company I was meant to build. It’s what Craigslist would be if it was run well: mobile first with fully moderated content, no spam, scam, prostitution, personals and murders, catering to women, who are the primary decision makers in all household purchases. It now serves over 350 million users every month in 30 countries in mostly emerging markets where it is part of the fabric of society. It allows millions of people to make a living and improves daily lives while being free to use. OLX allowed me to further my craft and further fall in love with the beauty and elegance of marketplaces. As I was busy running OLX with its hundreds of employees around the world, I decided to focus on marketplaces as an angel investor as I felt uniquely positioned to make rapid investment decisions. This specialization created its own network effect. Becoming well known as a marketplace investor improved my deal flow in marketplaces, improved my pattern recognition and allowed me to develop more robust thesis and heuristics. As FJ Labs evolved from Jose and my angel investing activities, we simply kept going down the marketplace path we were already on. In 2020, marketplaces remain as relevant as ever. We are still at the beginning of the technology revolution and marketplaces will have a significant role to play in the decade to come and beyond.B. We decide quickly and transparently As an entrepreneur I always hated how slow the fundraising process was and how time consuming it was. Weeks go by between meetings with venture capitalists if only because they use time as an element of due diligence. Entrepreneurs must be very thoughtful about running a tight process in order get term sheets at the same time to create the right amount of FOMO. Entrepreneurs rarely know where they stand. VCs who are not interested may just ghost them or be terribly slow rather than outright pass on the investment to preserve the optionality of changing their mind. It drove me nuts as an entrepreneur and I decided to do the opposite as an angel. I opted for radical transparency and honesty. Because I was so busy running the day to day operations of OLX, I devised a strategy to evaluate startups based on a 1-hour call. On the 1-hour call or meeting I would tell the entrepreneurs if I was investing and why. In 97% of the cases I passed on the opportunity and would tell them what would need to improve to change my mind. We did not change the process much for FJ Labs, though we refined it in a way that allows us to evaluate more deals and be more scalable. Most startups are first reviewed by a FJ team member who presents their recommendation on our Tuesday investment committee meeting. If warranted Jose or I take a second call after which we make our investment decision. In other words, entrepreneurs get an investment decision after at most 2 calls over 2 weeks. If we choose not to invest, we tell them why and what would need to change for us to change our mind. If I am on the first call, I still often make the investment decision at the end of the meeting to the shock of the entrepreneur. I find it normal. After all we have clear investment heuristics and strategy and stand by our beliefs. I love clarity of purpose and thought.C. We do not lead deals&nbsp; As angels we did not lead deals. When we started FJ Labs it never occurred to us to become traditional venture capitalists and to lead deals. We prefer meeting entrepreneurs, hearing their crazy ideas, and helping them realize those dreams. This allows us to avoid the legal and administrative work that comes from leading deals. Moreover, as angels we always saw VCs as our friends. We established strong relationships with many of them and started organizing regular calls to share deal flow. Our approach was super successful, and it did not make sense to change it. Leading deals would mean competing with VCs for allocation. There are many amazing deals we would not be able to participate in or be invited to. No one in their right mind would pick us over Sequoia if we were the type of VC that led deals. The beauty is that with current approach entrepreneurs do not need to pick. They can get both the lead VC of their choice and us. Right now, we invest in almost every company we want to, and we love it!D. We do not take board seats In a way not taking board seats is the natural consequence of not leading, but we have fundamental reasons for not wanting to sit on boards. Objectively an investor cannot be on more than 10 boards effectively which is not compatible with our highly diversified approach. Worse, I observed that the companies that are failing end up needing way more work and time. In other words, you end up allocating all your time to help the companies going from 1 to 0&nbsp; and almost none of your time on the companies that are doing the best and are going from 1 to 100. Instead you should be ignoring the companies going from 1 to 0 and spending your time thinking how to create the most value for your rocket ships. There is also a certain formality and rigidity to board meetings that prevent them from getting to the heart of the matter. Both as an entrepreneur and an investor the most meaningful strategic discussions I ever had were informal 1 on 1 coffee chats rather than formal board meetings. I have been told countless times that the conversation I had with an entrepreneur was the most meaningful they ever had. Note that not taking board seats does not mean we are merely passive investors. The value we provide takes a different form.E. Our main value add is to help with fundraising, with offline advertising and to think through marketplace dynamics Many funds with billions of assets under management have fully fledged platform teams with lots of venture partners. They have headhunters and experts in various areas to help portfolio companies. We do not have the resources to do all those things. Instead we decided to focus on three differentiated ways of helping. First and foremost, we help startups raise. We either help them complete their existing round or raise future rounds. Ultimately, FJ Labs is not setting the terms of the round. We just want the companies we love to get funded. We do deal flow sharing calls with around 100 VCs every 8 weeks covering almost every stage and geography. We have a tailored approach where we present the right VCs to the right startups. The VCs love it because they get differentiated tailored deal flow. The entrepreneurs love it because they get meetings with top VCs. We love it because the startups we care about get funded. Prior to the entrepreneur going out to market, we try to do a catch-up call to give them feedback on where they stand and review their deck and pitch. When we feel they are ready, we make the relevant intros. We can also help think through marketplace dynamics. Should you start with the supply or demand side? How local should you be? Should the rake be 1%, 5%, 15% or 50%? Should the rake be taken on the supply side or the demand side? Should you provide extra services to one side of the market? We see so many marketplaces that we have developed a lot of pattern recognition and can help think through core strategic issues. Lastly, we can help portfolio companies with their offline advertising, especially TV advertising. William Guillouard, one of our Venture Partners was Chief Marketing Officer at OLX where we spent over $500 million in TV advertising. We developed methods to run TV campaigns the way we run online campaigns with attribution models and LTV to CAC analysis. In several cases, we successfully scaled companies rapidly though TV with better unit economics than through Google and Facebook. Obviously, this only applies to a small subset of portfolio companies which are mass market, have good unit economics and enough scale to justify trying TV, but for those companies it can be game changing.F. We have set check sizes by round We do not want to be competing for allocation with traditional venture capitalists. We see ourselves as a value-added small co-investor alongside them and we want them to want to invite us to their best deals. This puts maximum check sizes we can deploy at every stage, especially seed stage. In a typical $3M seed round, the lead invests $1.5-2M. To be right-sized relative to the lead, we currently invest $390k at seed. We could probably deploy a bit more capital at each stage and might slightly increase our check sizes in the future if our fund gets a bit larger, but our investment size will always be small relative to that of the lead. In pre-seed there are often no funds investing. Rounds are often made up of a group of angels. In this case, we may very well be the largest investor with our $220k investment, but we just consider ourselves to be one of the angels rather than a real lead. We also invest $220 “fliers” in companies we find compelling but are not comfortable investing our standard allocation. We do this for a variety of reasons. Perhaps the valuation is a bit high, the unit economics not quite proven or the startup is in a business we find interesting but do not know much about. You can find our current standard allocations below. G. We evaluate follow-ons on a standalone basis The clear Silicon Valley motto is you double down on your winners regardless of price. We take objection to the second part of that statement. We have always been thoughtful about valuation and it has served us well. As I will&nbsp; detail in a subsequent blog post on FJ Labs’ evaluation criteria if we feel a startup’s valuation is too high relative to traction we do not invest even if we love the entrepreneur and business they are in. We evaluate follow-ons as though it was the first time we were investing in the business. To keep the evaluation objective, a different team member from the one who made the original investment recommendation does the analysis. The question we try to answer is the following: knowing what we now know about the team and business, would we invest in the company at this valuation? Depending on how strongly we feel about the answer to that question we try to do super pro-rata, pro-rata or merely pass on the investment. In the last few years, as more funds moved to later stages, we often felt our best companies became overvalued and we did not follow on at those later stages. To date, we followed on in 24% of our investments. Also, given our fund size, we often cannot afford to do our pro-ratas as they would represent most of the capital deployed. Worse given our small ownership percentage as the companies become later stage, we start losing information rights and no longer have visibility into how well the company is doing. As a result, when we feel the price is right, we sometimes sell 50% of our position in secondary transactions, typically selling to the lead VCs when a round is happening. In a way we are doing the exact opposite strategy of Silicon Valley: we sell our winners rather than double down on them. This explains why our realized IRR is so high. Part of the reason we seek secondaries is driven by our business model. Contrarily to large funds, we do not live from fees. We just reached our break-even point with FJ Labs. After years of having to subsidize our cost structure with millions of out of pocket investment, the management fees we collect now cover our expenses. However, we still have a way to go. Jose and I are not paying ourselves or reimbursing our expenses. Our business model is different. We make money from exits. We need the capital from successful exits to keep investing in new startups because we represent such a large percentage of the capital deployed. To date we represent $114 million of the $284 million deployed. We cannot afford to wait a decade for the final exit because we want to continue investing at the rate we have been investing. As you can imagine such secondary exits are only available in the absolute best companies. No one is interested in buying out positions in companies that are not doing well. Even in the best companies, we can only sell because we own small positions and are not on the board. There is no real signal coming from our willingness to sell other than our need for liquidity. In fact, we are often asked to sell as a favor rather than us seeking to sell. For instance, Andreesen, Greylock and Sequoia may all want to invest in a company at the Series B. The entrepreneur loves all 3 and does not want them to fund a competitor. The funds want at least 15% ownership each. The entrepreneur does not want 45% dilution. They do a primary round for 30% and organize a secondary for the rest. They ask us if we would mind selling part of our position in the secondary as a favor to get the round done. We thought long and hard about how much we should sell in these situations. In the end we opted for selling 50%. It provides us with liquidity and a great exit, while preserving lots of upside if the company does amazingly well. Our fund multiple would be higher if we held until the end, though our IRR would be lower. However, considering we essentially redeploy all the capital that we obtain from the exit into earlier stage companies where we feel there is more upside, our real multiple and IRR is higher when we pursue the secondary when you consider the return we get from the redeployment of the capital. H. When the fund runs out of money, we just raise the next fund and follow-ons happen from the next fund We do not follow traditional portfolio construction. The portfolio is just the sum of the individual investments and follow-on investments we make. The construct is completely bottoms-up. We just deploy the capital we have and when we run out of capital, we raise the next fund. We do modulate the investment sizes to make sure each fund is deployed over 2 to 3 years, but that is the extent of it. Given that we do not know whether we are going to follow-on, and we only follow-on in 24% of the cases, it does not make sense to reserve capital for follow-ons. Also, many of the follow-ons fall outside the 2 to 3-year capital deployment range of a fund. As a result, we told our LPs we would do follow-ons from whatever fund happens to be investing when we make the follow-on investment decision. We also tell them to invest in every fund to have the exact same exposure we do. Note that we would not sell the position from one fund to another. There is only one investment decision: we are investing, holding, or selling. I. If you were successful for us in the past, we will back you in your new startup even if It is not a marketplace We stick by the founders who do right by us. At this point we backed around 1,400 founders in 600 companies. 200 of them had exits and half of them were successful. Many of the successful founders went on to build new companies. For instance, this is how we ended up investing an Archer (www.flyarcher.com), an electric VTOL aircraft startup. We backed Brett Adcock and Adam Goldstein in their labor marketplace startup Vettery which was sold to Adecco. We were excited to back them in their new startup despite our lack of domain expertise in electric self-flying aircrafts. In summary, while we do not have a set number of deals, stage or geography we intend to invest in every year, things play out such that we end up having an investment strategy that can be summarized as follows: Pre-Seed / Seed / Series A focus Set investments sizes per round that average to $400k Marketplace focus (70% of the deals) Global investors but with most of the deals in the US, followed by Western Europe, Brazil and India respectively 100+ investments per year Investment decision 1-2 weeks after the first meeting We evaluate follow-ons on a standalone basis and follow-on on average in 24% of investments We do not reserve funds for follow-ons. We invest from whatever fund we happen to be deploying at the time of the investment We do not lead rounds We do not join boards We help portfolio companies fundraise To give you a sense of scale, our latest $175M fund will probably have over 500 investments. What is interesting is that while we did not do any modeling or portfolio construction, this highly diversified strategy seems to be by far the most effective. There is a very thoughtful paper by Abe Othman, head of Data Science at AngelList that suggests that at seed the best strategy is to invest in every “credible” deal. It’s born out by Angelist’s performance analysis for LPs that clearly finds that “having investments in more companies tends to generate higher investment returns. On average, median returns per year increase 9.0 basis points and mean returns per year increase 6.9 basis points for each additional company that an LP is exposed to.” Our returns lead credence to the theory. As of April 30th, 2020, we invested $284 million in 571 startups. We had 193 exits with a 62% realized IRR. I suspect that diversification works well for several reasons: Venture returns follow a power law rather than a normal Gaussian distribution curve. It is essential to be in the companies that generate all the returns. Investing in more companies increases the probability that you hit the winners. Investing in more companies increases your profile as an investor, which in turn improves your deal flow. This is further strengthened if you establish a brand as the must have investor for a given category as we have in marketplaces. Evaluating more companies gives you more data to build pattern recognition to improve your investment criteria and thesis. The beauty of our strategy is that it is organic and bottom’s up. We evolve it over time as we observe conditions evolving whether they at the macro level, the venture capital industry or in technology specifically. For instance, a decade ago, we used to invest a lot in Turkey and Russia. After Putin invaded Georgia and annexed Crimea, and after Erdogan was elected in Turkey, we stopped investing in both countries as we correctly surmised that venture capital and exits would dry up. Likewise, before February 2018, we did not invest in pre-seed, often pre-launch companies. However, venture capital firms kept increasing their fund sizes. To deploy larger amounts of capital, those funds moved to later stages pushing up valuations at those stages as more capital was chasing the same number of deals. We felt it made sense to be contrarian and to move to earlier stages where capital was drying up. After seeing an increasing number of B2B marketplaces where the marketplace picked the supplier for the demand side, we evolved our marketplace investment thesis. It is going to be interesting how our strategy is going to evolve in the coming years. For instance, I can imagine a future where we differentiate our early stage strategy from our later stage strategy and create separate funds for those opportunities. Time will tell, all I know is that it is going to be fun!

2020-06-25T14:03:32

2020-06-25T14:03:32

https://fabricegrinda.com/?p=11942

2023-10-09T14:55:10

2023-10-09T14:55:10

bold-series-the-future-of-marketplaces-2

publish

post

https://fabricegrinda.com/bold-series-the-future-of-marketplaces-2/

BOLD Series: The Future of Marketplaces

<p>I was invited to share my vision on the future of marketplaces for the BOLD Awards.</p> <p>I cover:</p> <ul> <li>Why we are still at the beginning of the technology revolution</li> <li>Why marketplaces are amazing</li> <li>Why we are still at the beginning of the marketplace revolution</li> <li>Our 3 online marketplace theses</li> <li>Trends in food</li> <li>Trends in real estate</li> <li>Trends in cars</li> <li>Trends in labor marketplaces</li> <li>Trends in construction and home services</li> <li>Trends in online lending</li> <li>Q&amp;A</li> </ul> <figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper"> <iframe loading="lazy" title="BOLD Series: The Future of Marketplaces with Fabrice Grinda" width="840" height="473" src="https://www.youtube.com/embed/XknkYAjfyL8?feature=oembed" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe> </div></figure>

<p>I was invited to share my vision on the future of marketplaces for the BOLD Awards. I cover:</p>

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BOLD Series: The Future of Marketplaces. Categories - Marketplaces, Speeches. Date-Posted - 2020-06-25T14:03:32 . I was invited to share my vision on the future of marketplaces for the BOLD Awards. I cover: Why we are still at the beginning of the technology revolution Why marketplaces are amazing Why we are still at the beginning of the marketplace revolution Our 3 online marketplace theses Trends in food Trends in real estate Trends in cars Trends in labor marketplaces Trends in construction and home services Trends in online lending Q&amp;A

2020-06-15T14:44:43

2020-06-15T14:44:43

https://fabricegrinda.com/?p=11933

2021-05-28T06:40:31

2021-05-28T06:40:31

20-minutes-from-the-future

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post

https://fabricegrinda.com/20-minutes-from-the-future/

20 Minutes from the Future

<p>I had an interesting conversation with Andrea Dusi. We discussed:<br>• The role of startups during the pandemic.<br>• Why don’t we invest much in Italy and in general in smaller markets?<br>• What can governments do to foster a successful startup ecosystem?<br>• Why now is an amazing time to start a startup?<br>• What are the most promising sectors to create a startup now?<br>• The future of food<br>• Why FJ Labs’ IRR is so high?<br>• Prospects for climate tech<br>• How to reform education to foster entrepreneurship?</p> <figure class="wp-block-embed aligncenter is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper"> <iframe loading="lazy" title="20 minutes from the future with Fabrice Grinda" width="840" height="473" src="https://www.youtube.com/embed/4wQSg2x_hro?feature=oembed" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe> </div></figure>

<p>I had an interesting conversation with Andrea Dusi. We discussed:• The role of startups during the pandemic.• Why &hellip; <a href="https://fabricegrinda.com/20-minutes-from-the-future/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;20 Minutes from the Future&#8221;</span></a></p>

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20 Minutes from the Future. Categories - Entrepreneurship, Interviews &amp; Fireside Chats, Personal Musings. Date-Posted - 2020-06-15T14:44:43 . I had an interesting conversation with Andrea Dusi. We discussed:• The role of startups during the pandemic.• Why don’t we invest much in Italy and in general in smaller markets?• What can governments do to foster a successful startup ecosystem?• Why now is an amazing time to start a startup?• What are the most promising sectors to create a startup now?• The future of food• Why FJ Labs’ IRR is so high?• Prospects for climate tech• How to reform education to foster entrepreneurship?

2020-06-03T15:39:15

2020-06-03T15:39:15

https://fabricegrinda.com/?p=11865

2023-11-17T13:47:45

2023-11-17T13:47:45

the-genesis-of-fj-labs

publish

post

https://fabricegrinda.com/the-genesis-of-fj-labs/

The Genesis of FJ Labs

<p>I was about to start a series of posts on marketplaces covering how FJ Labs gets its deal flow, how we evaluate startups and our current investment thesis when I realized I had to start with the genesis of FJ Labs and our investment philosophy as they are intricately related. </p> <p><strong>I have always been both an entrepreneur and an angel investor.</strong></p> <p>FJ Labs is a hybrid venture fund and startup studio that allows me to scratch both my entrepreneurial and investing itches. It is not a given that entrepreneurs should also be investors, especially at the same time. Somehow that has always been true for me. It started back in 1998 when I built my first venture backed startup. By virtue of being a visible consumer Internet CEO, other entrepreneurs started approaching me for advice and investment. </p> <p>I wondered if it would be distracting from my core mission to be investing in other startups, but I realized I was meeting many entrepreneurs to try to help them anyway and this only aligned me with them. I was literally putting my money were my mouth was. Besides, I loved hearing their ideas and struggles while trying to be helpful. If anything, I felt it made me a better entrepreneur as I kept my fingers on the pulse of the market and understood the latest trends and approaches.</p> <p>Given that I was pressed for time and had little capital and experience, I used the same selection criteria I used at that time for myself to evaluate their businesses simply layering on my perspective on the entrepreneur and the deal terms. </p> <p><strong>Early angel investing</strong></p> <p>In the 1998-2000 period, I invested in 7 startups. One failed after a few months. In 2001, if you asked me how the portfolio was doing, I would have told you all were bound to fail. I was shocked years later to be contacted by an investment banker asking me for my banking information because one of them was going public. Eventually I had successful exits on 6 out of the original 7! I had gotten lucky thanks to the grit, tenacity and staying power of this original batch of founders. </p> <p>I did not invest again until 2004. My original startup had not been the success I expected it to be and tech entered a nuclear winter where no capital was available. I had to reserve what little capital I had for my second startup, Zingy. I started investing again after I successfully sold Zingy in 2004, especially as I was itching to get back to marketplaces. </p> <p><strong>Unique angel investing approach</strong></p> <p>As OLX started growing in traction and visibility, other entrepreneurs started once again reaching out for investment. Given how busy I was running OLX, which at that time had hundreds of employees, and hundreds of millions of unique visitors a month in 30 countries, I decided to focus on marketplaces as I felt I could evaluate them rapidly. I came up with a strategy to evaluate startups based on a one-hour call and started investing. </p> <p>I opted for radical transparency. On the 1-hour call or meeting I would tell the entrepreneurs if I was investing and why. In 97% of the cases I passed on the opportunity and would tell them what would need to improve to change my mind.</p> <p>As an entrepreneur I hated that VCs never told me where I stood. Many times, they knew they did not want to invest, but did not want to say so to preserve optionality. I also hated how they dragged out the investment decision process both to see how we performed during that time and to get consensus within their firm. I also abhorred how they would take weeks to reply to emails if they deigned replying.</p> <p>I am sure this frustration is related to my personality type. I hate indecisiveness. It drives me crazy when people hedge when they talk. I love clarity of purpose and thought. If an entrepreneur and idea resonate, I owe it to them to invest and not drag the process.&nbsp;&nbsp; </p> <p>In that period, 2004-2012, I did not have an investment thesis. I did no outbound. I did not have a specific number of investments I wanted to make. I merely reviewed all the inbound deals and invested in whatever struck my fancy. On average I tried to invest $100k in each startup, but I did not have a minimum ownership threshold. If less was available, I invested less. It led to a large variation in the number of investments as some years I was more inspired than others, but in general I was investing in 10-25 startups per year so rapidly became known as a “super-angel.”</p> <p>It is funny that most people saw me as an investor rather than an entrepreneur because my name would more often be associated in the press and Techcrunch with investments I made rather than the company I was running. </p> <p><strong>My hatred of administrative work</strong></p> <p>In the process of making the investments I came to realize I loved talking to the entrepreneurs and talking through their startups but hated all the administrative work around it. From lack of interest and time, I decided not to review any of the legal docs ever sent to me. I had my assistant auto-sign everything automatically for my first 100 investments. This includes auto signing all subsequent docs entrepreneurs wanted signed without ever reading any of them. It goes to show that the vast majority of people are honest as it worked out great in the end.</p> <p>As you can imagine I also did no real due diligence beyond my evaluation of the entrepreneur and their business during the 1-hour conversation. To be honest I never really understood why due diligence took so long. Most of the companies were so young there was not much to diligence and I was not about to ask for bank records or access to their Stripe account to verify that the gross sales numbers they were telling me were real and not fabricated. I took the entrepreneurs’ word for it. </p> <p>Likewise, I realized that reference checks on founders often gave the wrong signal. Some of the absolute best entrepreneurs had horrible references from their former employers because they were bad employees. They were independent thinkers who talked back and often were working on heir future startups on the job. I stopped doing reference checks. I am not sure doing them would have allowed me to catch the one case of misuse of funds we had in the 600 investments we made to date, but it would certainly have slowed down our investment process and led to worse investment decisions. </p> <p><strong>Getting a partner</strong></p> <p>As you can imagine my hatred for all thing administrative and bureaucratic extend to every element of my life including my entrepreneurship side. It would have served me well to have a partner during my first startup. I hated dealing with lawyers, stock purchase agreements, legal agreements, formal employee reviews and the like. When I decided to start OLX, I partnered with Alec Oxenford. I met Alec in 1999, while I was running my first venture backed startup. He was introduced to me by a former McKinsey colleague who told me of this amazing team of entrepreneurs from Harvard and Stanford who were thinking of launching a startup in Latin America. </p> <p>I met Alec and his many cofounders in June, confirmed their belief they should launch an eBay-like site in Latin America and agreed to provide them with the technology and business plan to do so. On a handshake deal we launched them out of our servers in Paris before helping them transition to their own platform.</p> <p>I reconnected with him after he sold Deremate. On paper Alec and I looked similar as we were both ivy-educated former management consultants who had been CEO of online auction sites. We never discussed responsibility splits but found a balanced partnership. We both had an equal say in strategic decisions. I ran product while he ran operations. It just worked. </p> <p>While I was working with Alec on OLX, he re-introduced me to one of his Deremate co-founders, Jose Marin. I must admit I did not really remember Jose. He had been one of many co-founders at Deremate. We only interacted a few times in the decade since the original 1999 meeting. Given his look and accent, I just had the impression he was a Latin playboy without much substance. </p> <p>On the behest of Alec, I started spending more time with Jose and realized I was unfairly prejudiced. There was depth and substance behind the look. It turns out Jose was a successful angel investor and entrepreneur in his own right. He had specific expertise in real estate and travel was building a successful startup studio in Brazil. </p> <p>As he was busy building his startup studio, he was happy to partner on angel investing. For the sake of scale and efficiency, we decided to pool our activities starting in 2009. It helped me significantly improve my deal flow while adding expertise in key verticals. As an added bonus, it turns out he was a super detail oriented master negotiator who took real pleasure in making sure all the i’s were dotted and the t’s crossed and that we had important investor rights: preemptive rights, information rights, tag along etc.&nbsp; </p> <p><strong>The genesis of FJ Labs</strong></p> <p>After <a href="https://fabricegrinda.com/why-i-am-leaving-olx/">I left OLX </a> in December 2012, it was not obvious we were going to create FJ Labs. As you can read in <a rel="noreferrer noopener" aria-label="framework for making important decisions (opens in a new tab)" href="https://fabricegrinda.com/a-framework-for-making-important-decisions-step-3-4/" target="_blank">step 3 of my framework for making important decisions</a>, I tried many things. I aspired to run Craigslist. I tried to buy eBay Classifieds. I applied to run a special economic zone in Cuba. I tried many other ideas. They all failed, mostly because they required other people’s approval. By contrast it took no one’s permission to invest or start new startups. We kept doing it while I was pursuing other ideas and it just kept scaling.</p> <p>As our profile as investors grew, our deal flow kept increasing and the number of investments we made kept increasing. As we yearned to remain entrepreneurs, we also started building 1 or 2 new startups every year. While we scaled both our startup studio operations and our angel investing activities, it was still not a given that it required the creation of a venture fund. We do not lead rounds as we do not want to compete with traditional VCs. Instead we want them to see us as valuable thought partners and a source of differentiated deal flow. This puts a rather low maximum check size we can invest in any given round.&nbsp; </p> <p>After back testing our model, it looked like we could deploy $100M per year without changing our strategy. Given that we were not successful enough to deploy anywhere near that amount of money, we considered raising external capital. Despite the performance we had to date with 62% realized IRR on our exited investments, we failed to raise capital from traditional institutional investors who were horrified by our investing approach. I must admit I hated the process of trying to fund raise for FJ Labs. It was slow, repetitive, and boring. It also made me realize I would hate the reporting and bureaucratic processes that would come along with having traditional external investors.</p> <p><strong>Our first fund with external capital</strong></p> <p>We considered dropping the idea of having external investors altogether when we were approached by&nbsp;<a href="http://www.telenor.com/" target="_blank" rel="noreferrer noopener">Telenor</a>, a Norwegian telecom operator with a large presence in South East Asia and 174 million subscribers. To my great chagrin, Telenor had funded Schibsted in its war with OLX which is ultimately what led me to sell OLX to Naspers. That said, OLX’s merger with Schibsted in Brazil and other markets was very profitable for Telenor and gave them direct ownership of several classified assets in South East Asia. Given Telenor’s digital and marketplace ambitions, they reached out to us to see if they could invest in us in order to have a looking glass into the future by having exposure to US tech trends to either defend against them or bring them to their markets.</p> <p>It was a win-win partnership. They got visibility into marketplace trends while making attractive returns, and we got more investing firepower and a small fee base to start building a real team. FJ Labs was formally born in January 2016 with a $50M investment from Telenor complementing our personal capital and the small entrepreneur&#8217;s fund we run on Angelist.</p> <p>As the relationship proved successful all around, we agreed to scale up the partnership and open it to other strategic investors and family offices. Our second institutional fund should close in the coming months with $175M of external capital.</p> <p>Interestingly having external investors strengthened my relationship with Jose as I realized I would not have a fund without him. Auto-signing legal docs without reading them is fine when you are managing your own money but is not appropriate when you are the custodian of other people’s capital. He has worked hard to make sure we are both professional and reactive. Likewise, he enjoys the type of interpersonal relationships and socializing that I see as a burden. </p> <p>This has allowed us to get FJ to where it is today. As of April 30^th, 2020, we invested $284 million, of which $114 million was provided by Jose and I, in 571 startups. We had 193 exits with a 62% realized IRR. We started 13 companies and we are a team of 32. </p> <p>We are still at the beginning of this journey and I cannot wait to see what comes next!&nbsp; </p> <p></p>

<p>I was about to start a series of posts on marketplaces covering how FJ Labs gets its deal &hellip; <a href="https://fabricegrinda.com/the-genesis-of-fj-labs/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;The Genesis of FJ Labs&#8221;</span></a></p>

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The Genesis of FJ Labs. Categories - Featured Posts, FJ Labs, FJ Labs. Date-Posted - 2020-06-03T15:39:15 . I was about to start a series of posts on marketplaces covering how FJ Labs gets its deal flow, how we evaluate startups and our current investment thesis when I realized I had to start with the genesis of FJ Labs and our investment philosophy as they are intricately related. I have always been both an entrepreneur and an angel investor. FJ Labs is a hybrid venture fund and startup studio that allows me to scratch both my entrepreneurial and investing itches. It is not a given that entrepreneurs should also be investors, especially at the same time. Somehow that has always been true for me. It started back in 1998 when I built my first venture backed startup. By virtue of being a visible consumer Internet CEO, other entrepreneurs started approaching me for advice and investment. I wondered if it would be distracting from my core mission to be investing in other startups, but I realized I was meeting many entrepreneurs to try to help them anyway and this only aligned me with them. I was literally putting my money were my mouth was. Besides, I loved hearing their ideas and struggles while trying to be helpful. If anything, I felt it made me a better entrepreneur as I kept my fingers on the pulse of the market and understood the latest trends and approaches. Given that I was pressed for time and had little capital and experience, I used the same selection criteria I used at that time for myself to evaluate their businesses simply layering on my perspective on the entrepreneur and the deal terms. Early angel investing In the 1998-2000 period, I invested in 7 startups. One failed after a few months. In 2001, if you asked me how the portfolio was doing, I would have told you all were bound to fail. I was shocked years later to be contacted by an investment banker asking me for my banking information because one of them was going public. Eventually I had successful exits on 6 out of the original 7! I had gotten lucky thanks to the grit, tenacity and staying power of this original batch of founders. I did not invest again until 2004. My original startup had not been the success I expected it to be and tech entered a nuclear winter where no capital was available. I had to reserve what little capital I had for my second startup, Zingy. I started investing again after I successfully sold Zingy in 2004, especially as I was itching to get back to marketplaces. Unique angel investing approach As OLX started growing in traction and visibility, other entrepreneurs started once again reaching out for investment. Given how busy I was running OLX, which at that time had hundreds of employees, and hundreds of millions of unique visitors a month in 30 countries, I decided to focus on marketplaces as I felt I could evaluate them rapidly. I came up with a strategy to evaluate startups based on a one-hour call and started investing. I opted for radical transparency. On the 1-hour call or meeting I would tell the entrepreneurs if I was investing and why. In 97% of the cases I passed on the opportunity and would tell them what would need to improve to change my mind. As an entrepreneur I hated that VCs never told me where I stood. Many times, they knew they did not want to invest, but did not want to say so to preserve optionality. I also hated how they dragged out the investment decision process both to see how we performed during that time and to get consensus within their firm. I also abhorred how they would take weeks to reply to emails if they deigned replying. I am sure this frustration is related to my personality type. I hate indecisiveness. It drives me crazy when people hedge when they talk. I love clarity of purpose and thought. If an entrepreneur and idea resonate, I owe it to them to invest and not drag the process.&nbsp;&nbsp; In that period, 2004-2012, I did not have an investment thesis. I did no outbound. I did not have a specific number of investments I wanted to make. I merely reviewed all the inbound deals and invested in whatever struck my fancy. On average I tried to invest $100k in each startup, but I did not have a minimum ownership threshold. If less was available, I invested less. It led to a large variation in the number of investments as some years I was more inspired than others, but in general I was investing in 10-25 startups per year so rapidly became known as a “super-angel.” It is funny that most people saw me as an investor rather than an entrepreneur because my name would more often be associated in the press and Techcrunch with investments I made rather than the company I was running. My hatred of administrative work In the process of making the investments I came to realize I loved talking to the entrepreneurs and talking through their startups but hated all the administrative work around it. From lack of interest and time, I decided not to review any of the legal docs ever sent to me. I had my assistant auto-sign everything automatically for my first 100 investments. This includes auto signing all subsequent docs entrepreneurs wanted signed without ever reading any of them. It goes to show that the vast majority of people are honest as it worked out great in the end. As you can imagine I also did no real due diligence beyond my evaluation of the entrepreneur and their business during the 1-hour conversation. To be honest I never really understood why due diligence took so long. Most of the companies were so young there was not much to diligence and I was not about to ask for bank records or access to their Stripe account to verify that the gross sales numbers they were telling me were real and not fabricated. I took the entrepreneurs’ word for it. Likewise, I realized that reference checks on founders often gave the wrong signal. Some of the absolute best entrepreneurs had horrible references from their former employers because they were bad employees. They were independent thinkers who talked back and often were working on heir future startups on the job. I stopped doing reference checks. I am not sure doing them would have allowed me to catch the one case of misuse of funds we had in the 600 investments we made to date, but it would certainly have slowed down our investment process and led to worse investment decisions. Getting a partner As you can imagine my hatred for all thing administrative and bureaucratic extend to every element of my life including my entrepreneurship side. It would have served me well to have a partner during my first startup. I hated dealing with lawyers, stock purchase agreements, legal agreements, formal employee reviews and the like. When I decided to start OLX, I partnered with Alec Oxenford. I met Alec in 1999, while I was running my first venture backed startup. He was introduced to me by a former McKinsey colleague who told me of this amazing team of entrepreneurs from Harvard and Stanford who were thinking of launching a startup in Latin America. I met Alec and his many cofounders in June, confirmed their belief they should launch an eBay-like site in Latin America and agreed to provide them with the technology and business plan to do so. On a handshake deal we launched them out of our servers in Paris before helping them transition to their own platform. I reconnected with him after he sold Deremate. On paper Alec and I looked similar as we were both ivy-educated former management consultants who had been CEO of online auction sites. We never discussed responsibility splits but found a balanced partnership. We both had an equal say in strategic decisions. I ran product while he ran operations. It just worked. While I was working with Alec on OLX, he re-introduced me to one of his Deremate co-founders, Jose Marin. I must admit I did not really remember Jose. He had been one of many co-founders at Deremate. We only interacted a few times in the decade since the original 1999 meeting. Given his look and accent, I just had the impression he was a Latin playboy without much substance. On the behest of Alec, I started spending more time with Jose and realized I was unfairly prejudiced. There was depth and substance behind the look. It turns out Jose was a successful angel investor and entrepreneur in his own right. He had specific expertise in real estate and travel was building a successful startup studio in Brazil. As he was busy building his startup studio, he was happy to partner on angel investing. For the sake of scale and efficiency, we decided to pool our activities starting in 2009. It helped me significantly improve my deal flow while adding expertise in key verticals. As an added bonus, it turns out he was a super detail oriented master negotiator who took real pleasure in making sure all the i’s were dotted and the t’s crossed and that we had important investor rights: preemptive rights, information rights, tag along etc.&nbsp; The genesis of FJ Labs After I left OLX in December 2012, it was not obvious we were going to create FJ Labs. As you can read in step 3 of my framework for making important decisions, I tried many things. I aspired to run Craigslist. I tried to buy eBay Classifieds. I applied to run a special economic zone in Cuba. I tried many other ideas. They all failed, mostly because they required other people’s approval. By contrast it took no one’s permission to invest or start new startups. We kept doing it while I was pursuing other ideas and it just kept scaling. As our profile as investors grew, our deal flow kept increasing and the number of investments we made kept increasing. As we yearned to remain entrepreneurs, we also started building 1 or 2 new startups every year. While we scaled both our startup studio operations and our angel investing activities, it was still not a given that it required the creation of a venture fund. We do not lead rounds as we do not want to compete with traditional VCs. Instead we want them to see us as valuable thought partners and a source of differentiated deal flow. This puts a rather low maximum check size we can invest in any given round.&nbsp; After back testing our model, it looked like we could deploy $100M per year without changing our strategy. Given that we were not successful enough to deploy anywhere near that amount of money, we considered raising external capital. Despite the performance we had to date with 62% realized IRR on our exited investments, we failed to raise capital from traditional institutional investors who were horrified by our investing approach. I must admit I hated the process of trying to fund raise for FJ Labs. It was slow, repetitive, and boring. It also made me realize I would hate the reporting and bureaucratic processes that would come along with having traditional external investors. Our first fund with external capital We considered dropping the idea of having external investors altogether when we were approached by&nbsp;Telenor, a Norwegian telecom operator with a large presence in South East Asia and 174 million subscribers. To my great chagrin, Telenor had funded Schibsted in its war with OLX which is ultimately what led me to sell OLX to Naspers. That said, OLX’s merger with Schibsted in Brazil and other markets was very profitable for Telenor and gave them direct ownership of several classified assets in South East Asia. Given Telenor’s digital and marketplace ambitions, they reached out to us to see if they could invest in us in order to have a looking glass into the future by having exposure to US tech trends to either defend against them or bring them to their markets. It was a win-win partnership. They got visibility into marketplace trends while making attractive returns, and we got more investing firepower and a small fee base to start building a real team. FJ Labs was formally born in January 2016 with a $50M investment from Telenor complementing our personal capital and the small entrepreneur&#8217;s fund we run on Angelist. As the relationship proved successful all around, we agreed to scale up the partnership and open it to other strategic investors and family offices. Our second institutional fund should close in the coming months with $175M of external capital. Interestingly having external investors strengthened my relationship with Jose as I realized I would not have a fund without him. Auto-signing legal docs without reading them is fine when you are managing your own money but is not appropriate when you are the custodian of other people’s capital. He has worked hard to make sure we are both professional and reactive. Likewise, he enjoys the type of interpersonal relationships and socializing that I see as a burden. This has allowed us to get FJ to where it is today. As of April 30th, 2020, we invested $284 million, of which $114 million was provided by Jose and I, in 571 startups. We had 193 exits with a 62% realized IRR. We started 13 companies and we are a team of 32. We are still at the beginning of this journey and I cannot wait to see what comes next!&nbsp;

2020-05-06T14:26:52

2020-05-06T14:26:52

https://fabricegrinda.com/?p=11807

2021-05-28T06:47:19

2021-05-28T06:47:19

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The Impact of COVID19 on startups and the economy

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The Impact of COVID19 on startups and the economy. Categories - Entrepreneurship, Interviews &amp; Fireside Chats, Political Economy. Date-Posted - 2020-05-06T14:26:52 .

2020-04-28T17:20:49

2020-04-28T17:20:49

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2021-05-28T06:47:47

2021-05-28T06:47:47

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Transcript of All Things Marketplaces

<p>My <a rel="noreferrer noopener" aria-label="conversation with Erik Torenberg (opens in a new tab)" href="https://fabricegrinda.com/all-things-marketplaces/" target="_blank">conversation with Erik Torenberg</a> was so rich that I decided to transcribe it for those who did not want to listen to a 75 minute long podcast. I will use this transcription as the starting point on a series of posts on marketplaces covering: </p> <ul><li>How FJ Labs gets its deal flow</li><li>How FJ Labs evaluates startups</li><li>FJ Labs&#8217; current investment thesis</li></ul> <p>In the meantime here is the transcription.</p> <p>Erik Torenberg:</p> <p>Hey everybody. It&#8217;s Erik Torenberg, co-founder of Village Global, a network-driven venture firm. And this is Venture Stories, a podcast covering topics relating to tech and business with world leading experts. I&#8217;m here today with a very special guest and friend of the firm, Fabrice Grinda. Fabrice, welcome to the podcast.</p> <p>Fabrice Grinda:</p> <p>Thank you for having me.</p> <p>Erik Torenberg:</p> <p>Okay, Fabrice, you&#8217;re here to talk about marketplaces. You&#8217;ve been building and investing in marketplaces for over two decades now. Why don&#8217;t we start with sort of a backdrop and introduction? And I&#8217;ll start by asking you to sort of chronicle the evolution of marketplaces as you&#8217;ve seen it over the last couple decades. I know it&#8217;s a big question. You wrote a post about this in 2014. And, of course, even since then a lot has changed. But how has building and investing in marketplaces changed since you started doing it two decades ago?</p> <p>Fabrice Grinda:</p> <p>The first marketplace I came across was eBay and that was in the mid to late &#8217;90s. It was love at first sight. As an economist by formation (it’s what I studied at Princeton), I loved the idea that you could use marketplaces to bring transparency and liquidity to fragmented and opaque markets. If you go to the garage sale across the street, you&#8217;re not going to find what you&#8217;re looking for. If you&#8217;re trying to sell something, it&#8217;s not likely you&#8217;re going to find a buyer. But if you create a national or international marketplace, transactions are way more likely to be successful. The marketplace unlocks a massive amount of liquidity.</p> <p>That was the original marketplace, alongside Craigslist, but things have evolved dramatically. Especially in the last decade, there have been three major evolutions. The first evolutions that happened, which I described in the 2014 post, is the verticalization of marketplaces. People started realizing that on Craigslist or eBay, you could find a little bit of everything, but if you create a vertical-specific site that does the job better for that category, you&#8217;re going to have a much better experience.</p> <p>The original example of that was StubHub. You could buy and sell tickets on eBay and Craigslist, but on StubHub you had the seating chart for the venues, integration with the e-ticket providers and verification of the authenticity of the tickets. It was a significantly better experience. The same was true for Airbnb. Subletting existed on Craigslist before Airbnb existed, but they didn&#8217;t have a calendar. They didn&#8217;t have payments. They didn&#8217;t have reviews. As a result, the user experience was really broken. It was full of fraud. Airbnb really expanded the category. On Craigslist it was sub $1 billion a year and now it&#8217;s tens of billions a year.</p> <p>That verticalization has continued and it&#8217;s happened not just for products, but also for services. As mentioned eBay is being verticalized. You have a company like Reverb, a musical instrument marketplace, doing almost $1 billion a year in GMV (gross merchandise volume). They were acquired by Etsy last year. In services you have Thumbtack, Angies List or Home Advisor. They are being verticalized by companies like <a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://www.blockrenovation.com/" target="_blank">Block Renovation</a> which created a much better experience for renovating your bathroom. You have companies like Upwork in the remote work category that allow you to hire remote workers for almost everything and anything that are being verticalized by companies like <a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://www.toptal.com/" target="_blank">TopTal</a> for programmers.</p> <p>The definition I use for a horizontal marketplace is a multi-category marketplace that covers many different things. In the job space for instance Indeed or Linkedin would be horizontal sites. In products it would be eBay or Craigslist. In food, Uber Eats would be a horizontal player, given that they offer multiple types of cuisine. But even that is being verticalized. You have companies like <a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://slicelife.com/" target="_blank">Slice</a>, a pizza food ordering app or <a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://www.chowbus.com/" target="_blank">Chowbus</a>, in the Chinese food space that are doing very well.</p> <p>What&#8217;s interesting is, if you ask me what is it that I believe today in 2020 that most VCs don&#8217;t believe, is that verticalization is only beginning. It&#8217;s in its infancy and it&#8217;s going to continue and the players in it are going to do well. Most investors think that these verticals are very niche. They can&#8217;t be very large from a market perspective but they are wrong. Pizza is a $43 billion a year market in the US, that’s more than enough. &nbsp;Now, what else do VCs believe? Most of them are going to tell you, you have Uber Eats, Seamless, GrubHub, and DoorDash. It&#8217;s incredibly competitive. It doesn&#8217;t make sense to have a vertical. All of them are losing money, it&#8217;s a bloodbath; but that&#8217;s because they put themselves in the shoes of a consumer. If you put yourselves in the shoes of a Luigi, the pizzeria owner, you realize that his needs are not being met by the existing incumbents.</p> <p>The way the pizza market is structured in the US, you have about a third that&#8217;s controlled by Domino&#8217;s, Pizza Hut, and Papa John&#8217;s. For them 85% of their orders come from online and they have big R&amp;D budgets. But the 50 thousand independent pizzerias that are owned by the Luigis of the world, half of them don&#8217;t have a website. The vast majority don&#8217;t allow online ordering. So Slice creates their website, can pick up the phone, answer questions on Yelp and do all the support functions such that Luigi can focus on cooking pizzas. The future of work is one where people will do the job that are meant to be doing and everything else will be outsourced and done for them. Slice is a great illustration of both a vertical marketplace and the future of work. By doing so, they&#8217;ve created a business that now does hundreds of millions in sales. </p> <p>In the same vein, we&#8217;re investors in a company called <a href="https://www.tcgplayer.com/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">TCGplayer</a>. It&#8217;s a Magic: The Gathering marketplace. When we invested many questioned how this could make sense. They felt the market was tiny. First of all, Magic: The Gathering is a lot bigger than you might think it is. What happened is that the founder owned a comic book store. And as an owner of a comic book store, he realized that the point of sales (POS) systems that were available didn&#8217;t manage all the different SKUs required for Magic as there are millions of SKUs.</p> <p>He built his own and he uploaded all of his inventory. He considered building a SaaS business but charging $100 / month to all the comic book stores would have only been a small business. Instead he gave the software away for free and all the comic book stores started uploading their inventory. All of a sudden, he had all the inventory of all the comic book stores and he offered them to sell some of it on his marketplace in exchange for 10% if it sells. Low and behold, it’s nearing $100 million in sales.</p> <p>These businesses may seem small. but If you provide an extraordinary user experience to at least one side of the marketplace – and ideally both – you can have much better economics and very low customer acquisition costs and end up dominating the category as you face little to no competition. </p> <p>Slice doesn&#8217;t pay for the end-users who buy the pizza. They&#8217;re just existing customers who start &nbsp;ordering online. You could be a large and massively profitable business this way. You are probably not going to build a $100-billion company, but you&#8217;re going to build extraordinary products with loyal, dedicated fan bases and amazing economics and you can usually expand from this dominant position into conjoint verticals addressing a larger TAM (total addressable market). That&#8217;s one big trend. Marketplaces have been verticalizing. They&#8217;re becoming ever more sophisticated and the user experience is ever-improving, which leads to the second big trend.</p> <p>Managed marketplaces are all the rage. The issue is that the term has come to mean everything and anything. The type of managed marketplace place we love to invest in is one where the the marketplace picks the supplier for you. We call them marketplace pick models. </p> <p>Imagine an old-school marketplace. I need a plumber. I go to Thumbtack and 300 of them apply. You need to sort through the plumbers. Or if I want to hire a PHP developer, I go to UpWork. Hundreds of them apply. I need to sort, review and select. From a marketplace design perspective, that methodology is called double commit. Both the supply side and the demand side need to interact with each other, pick one another, and agree on a transaction. It&#8217;s easy to have listing, but there&#8217;s a lot of friction in getting a transaction to happen. On Craigslist, you list an item. A hundred people contact you and then you need to meet in person, etc.</p> <p>The marketplaces I love best these days are “marketplace pick” models, meaning the marketplace picks the supplier. The marketplace knows who has availability in your neighborhood, who would be the best match for you. Think of Uber: when you say you want to go from point A to point B, you don&#8217;t pick your driver. Uber picks the driver for you. It&#8217;s not the drivers who pick themselves. Uber sends a notification to a driver indicating this ride is available for them if they want it. It&#8217;s the marketplace that picks.</p> <p>What do I believe that most VCs don&#8217;t believe? Most VCs believe the “marketplace pick” model is great for commodity-type jobs, like an Uber driver, but that this cannot work for high-skilled labor, like programmers. </p> <p>I posit that this is not true. If a company has a selection process they use to select people, we can replicate it. In fact because we have more data and are doing a lot more recruiting in this specific vertical, we can do a much better job at it. For instance if a medium sized company needs to hire a SEO expert. It’s the type of hire they will only do once. However a company like <a aria-label=" (opens in a new tab)" href="https://advisable.com/" target="_blank" rel="noreferrer noopener">Advisable</a> will place many of them and will be in a better position to pick the right person for your needs than you are. </p> <p>We&#8217;ve invested in many of these “marketplace pick” models. We&#8217;re investors in a company called Meero. It&#8217;s a photographer marketplace. Airbnb says, &#8220;I need a photographer at Erik&#8217;s place next Tuesday at 2 p.m. because he wants to list his place.&#8221; Meero picks the photographer. </p> <p>Again, thinking about the future of work: what does a photographer want to do? He wants to take photos. What does he <em>not</em> want to do? Create a website, do marketing, find clients, do invoicing, do post-processing, editing, retouching, and sending the images. Meero will do all that for the photographer. Even though they have a 50% take rate, the photographer is happy as he makes more money than he would otherwise doing only the part he loves doing, Airbnb is happy, and Meero is, of course, very happy.</p> <p>The same is true of a company like <a href="https://www.rev.com/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Rev.com</a>. Rev.com is a transcription marketplace. To transcribe our conversation today, you send the recording via their app and pay $1.25 per minute. You don&#8217;t pick the transcriber, Rev.com picks the transcriber, then sends you the text. They take a high take rate, but because they provide tools to the transcribers, everyone&#8217;s happy. It also allows the transcribers to do their job better.</p> <p>In this “marketplace pick” model, the marketplace picks everything. They pick your general contractor, your plumber, your Uber driver. This is a massive trend that we&#8217;re following and investing in. We&#8217;re still at the very beginning of it. </p> <p>What people objected to in marketplaces was the amount of work it took. If you go on Amazon and you&#8217;re buying a product, everything works very beautifully, seamlessly in one click. Though, in many cases, Amazon is also a marketplace. So, if you do enough of the work and you can hide it effectively, you can create experiences for end users where it <em>looks</em> as though the marketplace is the provider of the service, even though it actually is a marketplace model. This way, you can build a company a lot faster.</p> <p>The key success factor of these marketplaces is rather different than the key success factor in normal marketplaces: you need to highly curate your supply because you are picking the supply on behalf of the demand. You need to pick the very best providers and match effectively. That&#8217;s key. If you do it well, you&#8217;re doing a good job. </p> <p>The third big trend, which is only emerging over the last four to five years, is B2B marketplaces. The internet took the consumer world by storm and we ended up having these extraordinary experiences and extraordinary sites, like Instagram, Google, Airbnb or Uber. When you look at the way most companies still transact, especially the large-scale companies, it&#8217;s still a lot of Rolodex and Excel spreadsheets and relationships. There&#8217;s no online pricing or online ordering. Nothing&#8217;s been automated. </p> <p>We&#8217;ve been investing in B2B marketplaces that are either in the industry itself, for instance <a href="https://www.knowde.com/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Knowde</a> – a petrochemicals marketplace – or we&#8217;re investing in the supply chain of an industry. For instance, we&#8217;re investors in <a href="https://www.rigup.com/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">RigUp</a> &#8211; an oil labor and worker marketplace where oil services companies and oil companies can hire contract laborers, like welders. In a way RigUp is the trifecta: it&#8217;s a vertical job marketplace that is marketplace pick and B2B. It’s all three of our current theses. </p> <p>We&#8217;re still at the very beginning of these three trends. Last year, we invested in 124 startups and the vast majority of them were marketplaces. Many people thought, “marketplaces are all done”. It&#8217;s completely wrong. We are at the very beginning of the internet revolution. Only 15% of the commerce is online, the largest components of GDP have not been digitized at all: healthcare, education, public services, construction. In all of these marketplaces have a primordial role to play. &nbsp;</p> <p>I published on my blog an article in 2019 on the latest trends in marketplaces. You can <a rel="noreferrer noopener" aria-label="watch the keynote (opens in a new tab)" href="https://fabricegrinda.com/noah-keynote-marketplaces-the-party-is-not-over/" target="_blank">watch the keynote</a> or <a rel="noreferrer noopener" aria-label="check out the slides (opens in a new tab)" href="//fabricegrinda.com/the-latest-trend-in-marketplaces/" target="_blank">check out the slides</a> there. Not only do I present these three theses, I also go through what&#8217;s going on in food, cars, real estate, labor, services and lending marketplaces.</p> <p>Erik Torenberg:</p> <p>Totally. It&#8217;s fantastic post. I will link that talk in the show notes. </p> <p>There&#8217;s a lot to get into. To zoom out on and close the loop on&nbsp; the historical perspective, you had a post where you said the different phases were: horizontal, then we went to vertical, then vertical transactions, then end-to-end vertical transactional. </p> <p>Andressen Horowitz has a post where it says it went from listing era, to the unbundled Craigslist era, to the Uber for X era, to the managed marketplace era, to whatever&#8217;s next. Do you have commentary on either of those or how that&#8217;s evolved?</p> <p>Fabrice Grinda:</p> <p>Yes, the horizontals went from listing-based, where you put a listing on Monster.com or Craigslist. Then transactional, where you can buy online – that would&#8217;ve been StubHub, eBay, Airbnb, to the verticals of those, then to the managed marketplaces, which meant they intermediated the transaction in some way, shape, or form. </p> <p>But to me, they&#8217;re subcategories of the three theses that I&#8217;m investing in. It&#8217;s a correct historical analysis of how marketplaces evolved. Today, you have elements of all of these in the three theses that I&#8217;m following. When I&#8217;m describing marketplaces becoming marketplace pick, it means they&#8217;re mostly going listing-based to ones where the marketplace is picking the supply.</p> <p>In fact, I could argue that there was an intermediate step between listing-based to demand pick. From the buyer picking his supplier to, now, the marketplace picking the supplier for you. I think all of these are correct but where are we today? </p> <p>I think the verticalization is continuing and accelerating, including things that are considered niche, a la the Magic: The Gathering. The listing-based ones will have to evolve if they&#8217;re going to survive in a world of higher-quality experience marketplace pick verticals, but they are not going to disappear.</p> <p>The reason they&#8217;re not going to disappear completely is they have a CAC (customer acquisition cost) of zero. Craigslist does not pay to acquire new customers, they come organically. For your marketplace to work, you need your unit economics to work. This means you need to recoup your fully-loaded CAC on a net contribution margin basis after 6 months and ideally triple your CAC after 18 months. </p> <p>There are some categories where the average order value is so low and where the recurrence of transactions is so low that it probably does not make sense to have these beautiful, extraordinary, vertical marketplaces because you cannot make the economics work. It’s why Shyp didn&#8217;t do well. </p> <p>For instance, a fire alarm system installation marketplace doesn&#8217;t make sense because the average order is low. It&#8217;s pretty expensive to acquire this supply and the demand, and you only need the installation once.</p> <p>Horizontals are not going to disappear, but the highest-value categories where great experiences can be created will be verticalized. The market is evolving. If you look at Craigslist traffic, their traffic is down 30 &#8211; 40% over the last four to five years, though it’s partly because they&#8217;ve had to close down a number of their Personals categories.</p> <p>Erik Torenberg:</p> <p>You&#8217;re big on verticalization. Does that mean you&#8217;re dubious on building horizontal marketplaces today? Is it a matter of timing or are you just, in general, more excited about verticalization? Would you have passed on Thumbtack? Are you dubious on these types of horizontal businesses? Is it a timing thing or is it a structure thing?</p> <p>Fabrice Grinda:</p> <p>It&#8217;s more a timing thing. When Thumbtack was created, there was no horizontal to do this. It made sense. If you can win the horizontal, you create more value than if you win the vertical. So if you have to choose, you want to build the general horizontal marketplace. You get more users, you have ultimately a lower CAC. That&#8217;s a total natural monopoly, but once you have an incumbent that has liquidity and they have scale and network effects, it&#8217;s hard to break in. OfferUp and LetGo have been trying to break in the Craigslist business with that much success as might&#8217;ve been expected, partly because they&#8217;re competing against each other instead of being one company, but also because, despite its horrible user experience, Craigslist works. They have liquidity. At the end of the day, in these businesses, user experience is less important than liquidity. Because Craigslist has liquidity, people still use them despite the fact they don&#8217;t moderate content.</p> <p>If the option is there, I want to build, own, or invest in a horizontal marketplace. That&#8217;s the biggest outcome. Also, if you&#8217;re a really smart player as a horizontal, you then verticalize. </p> <p>OLX, which was the company I built, has five thousand employees and 350 million unique visitors a month in 30 countries. It’s really Craigslist 3.0 for the rest of the world. It&#8217;s what Craigslist would be if they were mobile, moderated all their content, didn&#8217;t have any personals, murderers, prostitution, spam, and scam, and actually cared about the outcomes for the users. </p> <p>OLX has 350 million uniques a month and that&#8217;s extraordinary. The strategy there was: win the horizontal C2C (consumer to consumer) used goods transactions because people transact regularly and keep coming back to the site. Once we won that, we then launched C2C cars, which allowed us to launch B2C cars and win that category. Then we launched C2C real estate, then we launched B2C&nbsp; real estate. Often we also launched either services or jobs.</p> <p>Now, we didn&#8217;t win everywhere in every country. In countries like Russia, we ended up winning every vertical in addition to the horizontal. You start by horizontal then you use it as a launching pad because your cost structure or customer acquisition cost is much lower than any else’s. Since you&#8217;re in a category where people are using you every month, you can launch the verticals if you do a really good job. </p> <p>In the US specifically, we&#8217;ve had two players that have been largely incompetent. You&#8217;ve got Craigslist, which has not improved their UX UI, has not verticalized, has not created better experiences. And eBay, which has been ineffectively managed because they&#8217;ve been trying to be an Amazon competitor even though everyone in the world knows they&#8217;re not going to beat Amazon. And yet they&#8217;re investing all this money in selling you goods. 80% of goods on eBay these days are new. That makes no sense. Sure, they offer long-tail, Chinese goods, that are somewhat differentiated from Amazon. But they strayed away from their original core and never verticalized properly. </p> <p>In other countries around the world, the horizontals have totally gone vertical. The verticals are easier to build, but the network effects are not as strong, especially in the marketplace pick model, you have logarithmic network effects. </p> <p>Let&#8217;s say you are calling an Uber in a given city and your wait time is 10 minutes. If you increase the supply enough that your wait time is four minutes, that&#8217;s a massive increase in value. But increasing supply more to go from a four-minute wait time to a three-minute wait time is not that much more valuable. And because you don&#8217;t need that many suppliers to cover any given market, the barrier to entry is somewhat lower.</p> <p>Whereas in classifieds or auctions, it&#8217;s a total natural monopoly. You have one player that wins and has all the liquidity. It&#8217;s also relatively true in the verticals that are not marketplace pick, but it&#8217;s less true in these marketplace pick models. </p> <p>To summarize: if I could own the horizontal, I would own the horizontal and then I would verticalize. I would rather be HomeAdvisor than Block Renovation. I would rather be eBay than Reverb. But, then you should be doing a good job at verticalizing, which these incumbents have not done. That said, I don&#8217;t see any obvious horizontals that I would launch now. </p> <p>I was involved with a company that ultimately became LetGo. We tried to attack Craigslist with a lot of money and a much better product at every level. It has done well, but it&#8217;s not disrupting Craigslist. It has not had the outcome that we had expected when we launched.</p> <p>Erik Torenberg:</p> <p>Yeah. Do you see LinkedIn similar to Craigslist? I guess it just has such a first mover advantage.</p> <p>Fabrice Grinda:</p> <p>Absolutely. LinkedIn is a marketplace for jobs, essentially, and it&#8217;s horizontal. It&#8217;s interesting because it got there indirectly. It built a social network for business, that then became a job site. And being the repository of people’s profiles actually allowed them to become that. </p> <p>Clearly, there&#8217;s a trend for job sites to verticalize. We&#8217;re seeing a lot of sites going after hiring developers, like Hired and Vettery. We&#8217;re seeing a lot of sites, especially in the staffing categories, that are going after the verticals. We’re in <a href="https://www.trustedhealth.com/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Trusted Health</a>, a nursing marketplace. Of course, we&#8217;re in RigUp, the oil worker marketplace.</p> <p>Staffing is unique for a variety of reasons, but it&#8217;s only a small percentage of overall employment in the US, at around 6%. Outside of staffing, job sites have not been great businesses. And obviously, you&#8217;re going to tell me, &#8220;Wait a minute, I&#8217;ve looked at the Indeed.com or Zip Recruiter’s P&amp;L, and they&#8217;re doing really well.” The thing is, they don&#8217;t seem to have network effects because a business that has network effects is one where, over time, the more users you have, the more it attracts other users and your customer acquisition costs go down. But the problem with job sites is that, if they do their job well, they find you a job. And so you lose you as a customer and you need to reacquire you next time you are looking for a job.</p> <p>Often, job sites look like outsourced marketing companies, meaning the large employer like Walmart or a small employer like Luigi’s Pizzeria could put their own ads on Google, Facebook, etc to attract candidates. However, they are no very good at doing this. The job sites do this better for them, but end up merely being arbitrage business. They are simply buying ads more effectively than their clients would and are reselling them the candidates at slightly higher prices. These businesses are good, but they&#8217;re not great. They don&#8217;t have amazing networks effects.</p> <p>So, most of them have not built a LinkedIn. LinkedIn is great because they have true network effects. The only job site that really has network effects and is disproving my assertion that most job sites are actually outsourced marketing companies is RigUp. RigUp has become the defacto standard in oil. If you are in that industry, this is where your profile lives. It’s not on LinkedIn. This is where people look at your reviews, your experience, etc. It is doable, but it requires real deep sector expertise and in a category that&#8217;s large enough where it makes sense. Rigup is a great exemple of how to successfully attack and verticalize Linkedin. </p> <p>Erik Torenberg:</p> <p>If the idea is that every horizontal company should also then verticalize once they dominate, is it similar that every vertical company, once they own the verticals, should try to horizontalize?</p> <p>Fabrice Grinda:</p> <p>No, but they should go to adjacent verticals. TCGplayer – the Magic: The Gathering marketplace – is now in Pokemon. Pokemon, is now 30% of their GMV. Reverb started with guitars and later became music instruments writ large. In fact, Etsy bought Reverb, to enter another vertical. So I would say, go into adjacent verticals to increase TAM, but don&#8217;t go horizontal. That&#8217;s a recipe for disaster and losing your identity.</p> <p>Erik Torenberg:</p> <p>Totally. And so if the “why now?” for going vertical is that there are already a bunch of big horizontal incumbents, what&#8217;s the “why now?” for the marketplace pick strategy or the B2b approach? Why wasn&#8217;t the “why now?” in 2014 or in 2024 or 2025?</p> <p>Fabrice Grinda:</p> <p>In order to do marketplace pick, you need to have a matching algorithm that&#8217;s really good. You need AI to be at a point where you can actually replicate the recruiting methods of different verticals. </p> <p>B2B should have happened 10 years ago, it&#8217;s just that businesses are conservative and move extremely slowly. But the “why now?” is, it&#8217;s a massive comparative advantage if you‘ve digitized procurement. If you digitize your online sales, your supply chain and your competitors have not, you can extract efficiency. You can source lower costs, and you now have the examples of it having happened in the consumer world.</p> <p>Of course, it&#8217;s harder because you need to create a behavior change. And so the people, the type of entrepreneurs that succeed in these B2B marketplaces are people that come from the industry, but want to change it. They can get buy-in if they are connected well. </p> <p>It&#8217;s less likely to be the 25-year-old Stanford grad who decides he wants to build a dump truck driver marketplace. It&#8217;s more likely someone who actually came from that industry. &nbsp;And, we are, believe it or not, investors in a dump truck driver marketplace.&nbsp; Until I spoke to the founder, I didn&#8217;t even know this market existed. It&#8217;s a $37 billion a year market!</p> <p>The next “why now” is that many are mom-and-pop, family-owned businesses. They used to be owned by boomers, who are not very tech literate. But as these companies are now being handed over to the next generation – the millennials – they are completely tech-savvy. The idea that they&#8217;re going to be running a construction firm without having online ordering of underlying items, without having online visibility into project management, etc, is nonsencical. They&#8217;re tech-savvy and digital natives and they want to bring that digitalization to their companies.</p> <p>This is true, whether you&#8217;re a millennial inheriting or coming into the family business, or whether you&#8217;re the next generation of leaders in the corporate world coming in. The number of CEOs in their 60’s, 70’s, and 80’s, who are still not dealing with email and who have a secretary bring their email to them and are not super tech-savvy is mind-bogglingly large. But as the leaders who are in their 30’s, 40’s or 50s are coming into leadership positions of larger companies, I think they&#8217;re absolutely going to start digitizing their companies. It’s astound how little has happened to date.</p> <p>Erik Torenberg:</p> <p>Totally. You&#8217;re a thesis-driven investor. And so what types of marketplace businesses are you not interested in looking at or not interested in investing in, even within your thesis? Even within the ones that are B2B marketplace vertical and ones outside that. I presume you&#8217;re doing some consumer marketplaces still, correct?</p> <p>Fabrice Grinda:</p> <p>Absolutely, we didn&#8217;t do TCGplayer that long ago. Three years ago, I talked to them for the first time and they were vertical, but they had no real tech. I said “great, but I don’t see a moat.” And to his credit, that founder went in, spent all his money, built an amazing product, and basically locked up the supply. Then he convinced me to invest. We still do a fair amount of consumer because I still think we can create amazing consumer experiences. For instance, in the vertical food space, we&#8217;re in Chowbus, a Chinese food ordering app and they&#8217;re doing really well.</p> <p>Erik Torenberg:</p> <p>What makes something that you would not invest in?</p> <p>Fabrice Grinda:</p> <p>To evaluate companies, we have four criteria.&nbsp; </p> <p>These four criteria are: </p> <ul><li>Do we like the team? </li><li>Do we like the business? </li><li>Do we like the deal terms? </li><li>Does it meet our investment thesis?</li></ul> <p>The first three need to be collectively true. If any of them is not true, we&#8217;re not going to do it. If you have an amazing business and amazing team, but the valuation is too high, we&#8217;re not going to do it. And if the team is amazing, the valuation is reasonable, but we don&#8217;t like the business, we&#8217;re not going to do it. </p> <p>We are a bit less strict with the fourth criteria of meeting our thesis. 70% of what we do is thesis-driven, 30% is other things that we think are cool. That obviously evolves, over time. For instance there was a period where we were doing D2C brands. Also, if you are a founder who has been successful for us in the past, we will back you no matter what you do. Given that we invested in almost 600 companies and had 200 exits, many of these founders are at it again. We back them no matter what, and that leads to a number of investments outside of our thesis.</p> <p>Now, the three evaluation criteria. </p> <p>So one, do we like the team? Now, every VC in the world will tell you, &#8220;I invest in extraordinary talent and amazing teams.&#8221; The thing is, what does that mean? What&#8217;s an amazing founder? For us, it&#8217;s really someone who exhibits three traits. One, someone who&#8217;s an amazing storyteller. Storytelling skills are absolutely key because if you can actually weave a super compelling story, you&#8217;re going to attract more capital at a higher valuation. You&#8217;re going to get more PR and more business partnerships and you&#8217;re going to attract better talent to your company. But, that&#8217;s not enough because if that&#8217;s all you have, you may raise a lot of capital, but you many not build a very profitable, successful business.</p> <p>Number two, we want people that are numbers-driven and who are quantitative. You&#8217;d be surprised that the Venn diagram of people that are numbers-driven and also great storytellers is actually rather small. There are amazing, numbers-driven people who understand their unit economics extremely well, but can&#8217;t tell a story, so they can&#8217;t raise money. And we really want both of those to be true. </p> <p>And then three, we want to back people who have demonstrated grit and tenacity in their background. In the course of my one-hour conversation with a founder, I&#8217;m pushing really hard to see that they can actually hold their own and are willing to say that they don&#8217;t know as opposed to crumble. If you crumble, you&#8217;re not ready for the difficulties you&#8217;re going to face as a founder. Me questioning your assumptions is nothing relative to the difficulties you&#8217;re going to face.</p> <p>So that&#8217;s one. Number two, do we like the business? Now, do we like the business has a number of variables. What is your total addressable market size? What is the business model? But there is one thing we care above all else: what are your unit economics? </p> <p>For us, good unit economics are a business where you (a) recoup your fully-loaded CAC on a net contribution margin basis in the first six months of the business and (b) 3x your CAC after 18 months. Ideally, you don&#8217;t know what your LTV:CAC ratio is because you have negative churn. So maybe after 18 months, you&#8217;ve lost 50% of the customers, but the remaining 50% are buying more, and more, such that maybe your LTV:CAC is 10:1 or 20:1 .</p> <p>We&#8217;re seed and pre-seed investors for the most part. We do every stage, but we&#8217;re 65% seed/pre-seed, 25% A/B, and 10% late stage. As a result, most of our companies have not been live for that long and some are pre-launch. So if you&#8217;re pre-launch, I want you to be able to articulate what your theoretical unit economics are going to be, but not just based on putting your finger in the air and guessing. Instead, you’ve done unit testing on a limited marketing budget and the CPC was $1 and 10% of the people who came to the site signed up saying they were interested. That&#8217;s a $10 CAC and we think 10% of those will buy. It&#8217;ll be $100 customer acquisition cost.</p> <p>On the flip side, we know that the industry average order value is $300 and, we&#8217;re taking 20% and on that 20% we have a 66% margin. So 20% of $300, is $60, and you have a 66% margin, so you&#8217;re making $40. And we know from the industry average that people are buying this four times a year. So you&#8217;re recouping the CAC after nine months. And again, you better be telling me industry averages. If you&#8217;re trying to pitch me that you&#8217;re going to be way above the average for whatever reason, I&#8217;m less likely to believe you.</p> <p>Now, there&#8217;s another case where I&#8217;m willing to back you, even if the unit economics are not there, if you have a compelling reason as to why, with scale, you&#8217;re going to get there. So maybe you&#8217;re telling me, &#8220;Hey, I&#8217;m currently doing one delivery per hour and my delivery guy is costing me $15 bucks an hour. That said, with scale, I&#8217;m going to be able to deliver three times an hour and that&#8217;s very reasonable because of XYZ which shows that this is something I&#8217;m going to reach very easily with a little bit more scale. Then my delivery cost is $5 bucks per hour, at which point my unit economics work.&#8221; </p> <p>So either unit economics are there already, unit economics are going to get there with scale, or they&#8217;re theoretical, but they theoretically make sense and you could argue them very well.</p> <p>I&#8217;m very unit-economic driven. If you launch and you don&#8217;t have a business model, you don&#8217;t know how you&#8217;re going to monetize, I&#8217;m not going to fund you. If you launch and you may have massive GMV, massive traction, etc, but if you don&#8217;t know your unit economics and you don&#8217;t know when you&#8217;re going to monetize, I&#8217;m going to pass. I passed on many companies that ended up doing really, really well. It&#8217;s just that, when they came to see me, they didn&#8217;t have that figured out.</p> <p>If you invest in things that don&#8217;t have business models, most of them will fail and it&#8217;s not the way I operate. To date, we made money in around half of our investments because we&#8217;ve been very disciplined both on that and on valuation, which brings me to point number three: we want the valuation to be reasonable.</p> <p>Obviously, “reasonable” means I have a model in the back of my head of what is an appropriate level of valuation from an appropriate level of traction. Now, there&#8217;s massive variation in the numbers I&#8217;m about to give you because if you&#8217;re a second-time founder and you&#8217;ve done really well the first time, you&#8217;re going to command a higher valuation. If you are growing faster than average, you&#8217;re going to command a higher valuation. </p> <p>These days, for the most part, we&#8217;re seeing if you&#8217;re pre-launch and you&#8217;re raising a $1 million pre-seed round, the average pre-launch valuation is going to be $4-5 million for a first-time founder. </p> <p>If you&#8217;re post-launch and you&#8217;re raising your seed round, you are typically doing $150K a month in GMV, for a business with a 15% take rate, and you raise $3M at a $8M pre money valuation. And with that, I expect you to get to $650k GMV in the next 18 months. </p> <p>Then you&#8217;re going to raise your Series A and you&#8217;re going to raise $7M at $25M post. And with that, you get to $2.5M a month in GMV and you can raise your Series B at $20M on $50m, pre or $70M post.</p> <p>This is the median. The standard deviation is really wide because for the best companies that grow faster than that, their A looks like a B. In that case, at your A you may raise at $30M. </p> <p>There&#8217;s so much capital available in the later stages that if you are growing really quickly and have a compelling story, you might bypass some of these stages. However, this is the median for most deals, especially in the vertical marketplaces because many of the VCs don&#8217;t believe they can necessarily be big enough to warrant putting much capital into them. But all of these three things need to be true. You need to have a reasonable valuation, good unit economics, and an amazing team. And if that&#8217;s the case and you meet our thesis, we will invest.</p> <p>We decide in, maximum, two one-hour meetings over the course of a week. If I am on the call, very often, after a one-hour meeting I will tell you on that very call whether we are investing and why. </p> <p>Erik Torenberg:</p> <p>And on the deal terms, is there any science behind those numbers? Or is it, “hey, that&#8217;s what market is and that&#8217;s what we think is fair?”</p> <p>Fabrice Grinda:</p> <p>We don&#8217;t lead deals. We just join other people&#8217;s term sheets. As a result we invest relatively small amounts to make sure other VCs don’t see us as competition. We want to be friendly with all VCs and share our deal flow with them at every stage. We make sure not to compete with them for allocation. As a result we have no minimum ownership requirements. We try to invest $250K at pre-seed, $500K at Seed, $800K at the Series A, $1M at the Series B, and $1.5 million at Series C. The deal terms I gave you are not our justification of why they should be that. It&#8217;s where the market is today in the categories that I&#8217;m investing in.</p> <p>Erik Torenberg:</p> <p>Yeah. And you mentioned the unit economics and you think a lot about that. How did you come to those sort of specific numbers in terms of your framework? And what mistakes do marketplace founders typically make, as it relates to unit economics?</p> <p>Fabrice Grinda:</p> <p>The mistake is easy. The mistake people make is they overvalue GMV growth, but they undervalue net revenue and unit economic growth. There are periods of time where there&#8217;s a lot of capital available and people value GMV growth. Uber would not have been funded had that not been true when they were fundraising and their unit economics were underwater for a long time. </p> <p>But the problem is, if you&#8217;re growing negative unit economics, frankly, it&#8217;s easy. If I create a business where every time you give me a dollar, I give you two dollars, I can create a very big business very rapidly. But that&#8217;s never going to be profitable. So you need to really make sure that you have customer acquisition channels that are effective, scalable and profitable. Then you can, ultimately, at scale, turn this into a very profitable business.</p> <p>Many of the companies we pass on, it&#8217;s a unit economic problem. The unit economics are too marginal and I don&#8217;t see how they get there, even at scale. Scale just makes the problem bigger. So the mistakes people make, they try to grow with bad unit economics too quickly. I&#8217;m a very big believer in nail it before you scale it. Launch a city, nail the city. Once the unit economics work for the city, you&#8217;ve created a playbook for owning a city, launch the second city. Make sure that your playbook works there, too, and keep going. Often, people think that it&#8217;s a land grab so they launch very quickly in many different places, but if you&#8217;re growing really quickly without a playbook, with negative unit economics, the only thing you&#8217;re doing is increasing burn. It doesn&#8217;t make sense.</p> <p>Now, once you have a playbook that works, actually go for it. Put the pedal to the metal and go crush it, but I wouldn&#8217;t recommend doing that before you are ready otherwise you increase the risk of blowing up mid-air. If you have underwater unit economics, at some point, if market sentiment turns, you&#8217;re not going to be able to raise, especially if you raised too much money at too high a price. You’ve basically dug a grave for yourself. So that&#8217;s the big mistake that most people make that I would recommend avoiding.</p> <p>Erik Torenberg:</p> <p>And some people say it&#8217;s okay to have low margins, but what really is important is to focus on the payback period because you could make it up in different ways. Is that accurate?</p> <p>Fabrice Grinda:</p> <p>Well, your effective take rate and your effective margin are not that necessarily important. I do want you to be able to 3x your CAC in the future. But, yes. Payback matters a lot because I&#8217;m way more likely to believe that you&#8217;re going to have an LTV:CAC of 4:1 or 5:1 if you&#8217;re paying back in six months and then you&#8217;re doing 2x on your CAC in 12 months than if you tell me, &#8220;Well, I&#8217;m going to recoup my CAC in three years, but don&#8217;t worry. After that, it&#8217;s going to be a straight line to the moon and it&#8217;s going to be 100:1.&#8221; My belief of that is very low, but if you actually can recoup your CAC quickly and the channel you&#8217;re using is scalable, I definitely want to fund that. Then, I think there&#8217;s something there and we can grow.</p> <p>As a VC, I like to fund growth. If you have a channel that works, with good economics, you nailed what you need to do operationally, and all you need is more gasoline to pour on the fire, that&#8217;s exactly what I want to invest in, regardless of stage. If you&#8217;re at seed, all you need to do is get to the numbers that get you to an A. So I want to fund you to go from that $150k to $650k / month in GMV. If you&#8217;re at A, I want to get you to your B. You need to get from $650k to $2.5M a month. And if you&#8217;re at B, then it&#8217;s different because you can create optionality. You can go for profitability or you can do a C to keep growing quickly depending on how big the market is and what makes the most sense for you.</p> <p>Erik Torenberg:</p> <p>Why is the six-month number important?</p> <p>Fabrice Grinda:</p> <p>The what number?</p> <p>Erik Torenberg:</p> <p>You said 3x CAC within six months. Is that what you said?</p> <p>Fabrice Grinda:</p> <p>No, no, no, no. That would be amazing, but that&#8217;s almost never the case. No, no. Recouping CAC in six months.</p> <p>Erik Torenberg:</p> <p>Oh, my mistake. My mistake.</p> <p>Fabrice Grinda:</p> <p>You recoup the CAC in six months, then you 3x the CAC in 18 months. In the B2B businesses, by the way, it&#8217;s a little bit different because sometimes they have a pretty long sales cycle and your salespeople cost a fair amount of money, but they churn very little. There, it&#8217;s okay if your time to recoup your CAC is longer, as long as your churn is low. If you can prove to me these people are almost never going to churn and, in fact, you have negative churn because you not only you lose almost no logos, your existing customers buy more and more, then I&#8217;m happy to have somewhat different numbers. So in the B2B businesses, I use slightly different metrics.</p> <p>Erik Torenberg:</p> <p>What did you believe that you no longer believe about D2C brands, in terms of when you were investing in it versus not anymore?</p> <p>Fabrice Grinda:</p> <p>Well, even in D2C brand investing, I was always numbers-driven. I always liked the subscription businesses better than the unique product sales. So I prefer a, say, contact lens subscription to buying a mattress. Mattresses have a high AOV (average order value) but you&#8217;re buying it once and it&#8217;s harder to make the economics work with a one-time purchase. That said, there are some things that are better suited for subscription than others. So if you&#8217;re telling me birth control, sure. Erectile dysfunction, not so sure. I mean, do you really need to take Viagra every day? I&#8217;m not so sure. Hair loss, absolutely as you need to use the product daily.</p> <p>The problem is that the costs and complexity of launching D2C brands has gone down so much. In the grand scheme of things, that&#8217;s an amazing thing for consumers as you have more products available at a higher quality and lower price than ever before.</p> <p>As an investor, though, often it becomes a race to the bottom on price and a race to the top of increasing CPCs on Google and Facebook and Instagram. Also there&#8217;s an amount of serendipity and luck in which brands hit. So it&#8217;s hard to make the economics work. And as a numbers-driven investor, there&#8217;s very few D2C brands that I think are compelling enough that they make sense to invest in because it&#8217;s just too easy to launch a competitor and too many of them get funded and the economics are not great.</p> <p>Erik Torenberg:</p> <p>Is it fair to say you only want to invest in businesses that have a high frequency or a high AOV?</p> <p>Fabrice Grinda:</p> <p>Absolutely. You need one of those two things otherwise the economics don&#8217;t work. If you have low frequency and low AOV, you&#8217;re just not going to be able to recoup your CAC and very few businesses can actually grow without paid acquisition.</p> <p>Erik Torenberg:</p> <p>Is this why a model like Homejoy didn&#8217;t work? </p> <p>Fabrice Grinda:</p> <p>Absolutely. Homejoy didn&#8217;t have enough recurrence and had a low AOV. There&#8217;s also another problem with Homejoy. So the ideal marketplace design is one where the demand side has a non-monogamous relationship with a supplier, meaning you have different suppliers every time you use them. For instance you have a different Uber driver every time you ride. Maybe the Uber driver would like to drive you everywhere, but the problem is that&#8217;s not what you want because he&#8217;s not going to be available when you want, at all times. However, if you have someone cleaning your house, it&#8217;s actually different because you need to trust them. If they do a good job, and it&#8217;s the same person coming over and over again, you&#8217;re more likely to disintermediate the marketplace and have a direct relationship, especially if the marketplace is taking 15% or 20%.</p> <p>In the case of monogamous supplier relationships, the marketplaces need to have very specific and explicit value to avoid this disintermediation. In the end Homejoy didn&#8217;t provide enough value to either sides of their marketplace and had low AOV and too low recurrence.</p> <p>Erik Torenberg:</p> <p>How about when you look at Beepi and Sprig? Are there other companies who do those same things that will be successful, at some point? Or are those markets just too hard?</p> <p>Fabrice Grinda:</p> <p>Those are two different problems. Beepi was a prototypical example of founders thinking it was a land grab when it wasn&#8217;t. So they were like, &#8220;Oh, my god. There&#8217;s Carvana, Shift and Vroom. We need to go to all these different markets as soon as possible.&#8221; </p> <p>Beepi was actually a really good business in the first three cities they were in; in LA and SF and Tucson or Houston. They were doing really well. They had good economics, but then they exploded their burn and grew too quickly out of control. </p> <p>People loved the experience. There are a number of ways that the marketplace was designed that could have been better and more capital efficient, but it was a great product. The problem was a misreading of the tea leaves. I think they should have burnt a lot less money, grown slower, but kept nailing it and scaling it.</p> <p>Also, they raised too much money at too high a price. They were priced for perfection. If you are an entrepreneur, especially a first-time entrepreneur, there&#8217;s a temptation to just raise the most money at the highest price possible. Let&#8217;s say a VC tells you, &#8220;Okay, I&#8217;ll give you $10M at $40M pre, $50M post,&#8221; and the other one will tell you, &#8220;I&#8217;ll give you $20M at $80M pre, $100M post.&#8221; And in both cases, it&#8217;s the same dilution. It&#8217;s 20% dilution. So you&#8217;re going to be like, &#8220;Wait a minute. I should always take the $20M at $80M pre, $100M post.&#8221; The thing is, if your intrensic value is a lot lower than that, you need to grow into the valuation. If for whatever reason, you do well, but you don&#8217;t actually grow into it, then you screw yourself. There are anti-dillution provisions in down rounds and most people prefer to avoid them so instead of a down round the company does not get funded and dies. </p> <p>So Beepi was a combination of expanding too quickly with bad unit economics in many different cities, burning too much capital, and raising too much money at too high a price. </p> <p>Sprig had a different problem. They created their own kitchens to deliver to you in 15 minutes, low-cost meals, which turns out to be an extremely expensive value prop. It’s capital intensive to build, you need quality control, you need your delivery infrastructure. At the same time Uber Eats started coming up and offering all these discounts in order to take share away from Seamless GrubHub and became a viable alternative even though the food was not delivered as quickly or as good. </p> <p>Sprig, with that approach, was way too capital inefficient. And it&#8217;s not just Sprig that died. Maple died. But are there Sprig-like products that are going to exist in the future? Absolutely, with different startups taking care of different parts of the value chain. For instance, Travis&#8217; <a href="https://www.cloudkitchens.com/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">CloudKitchens</a> is creating dark kitchens on behalf of other companies. They aspire to become the Amazon Web Services (AWS) of the food space. Other companies are building brands on top of that infrastructure. We’re investors in a company called <a href="https://www.mealco.co/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Mealco</a>, which builds brands on top of dark kitchens. Because they use infrastructure built by third parties, they don’t need to spend hundreds of thousands of dollars per location to be able to launch, nor do you need to build their delivery network. They use Uber Eats, Doordash, Seamless Grubhub and the like. </p> <p>In other words there will be brands created on dark kitchens in the future. It will be way more capital efficient and with better economics than existed or were possible in the Sprig days. Those brands will differentiate and compete on food quality, menu composition, etc. It’s going to accelerate the trend towards online food ordering. </p> <p>The same thing is happening in the &nbsp;catering space. We&#8217;re investors in a Canadian company called <a href="https://www.platterz.ca/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Platterz</a>, which is absolutely crushing it. They&#8217;re an asset-light caterer. In food, we&#8217;ve probably made over 50 investments. </p> <p>What I like about Platterz is that they select caterers in every major city and then provide a curated experience to their large corporates clients, like Netflix. They are asset light. Their job is doing the matching, making the menus, figuring out which caterer they are going to use on which day, negotiating volume discounts, making sure that the quality is great. They re really a marketplace. They are really an intermediary.</p> <p>The early players were doing way too much of the work and were way too capital-intensive. It&#8217;s much better if you don&#8217;t actually need to be building any infrastructure and actually do the work yourself. Otherwise, you&#8217;re not really a marketplace. Sprig was not really a marketplace.</p> <p>Erik Torenberg:</p> <p>Totally. And do you prefer asset-light businesses as opposed to ones that are trying to own the entire value chain?</p> <p>Fabrice Grinda:</p> <p>You can own the entire value chain and yet be asset light, meaning you can provide an experience where it appears that you are the provider of the service to the end user, even though you&#8217;re a marketplace. And yes, I much prefer asset-light businesses. </p> <p>Being asset heavy and intensive can be a massive barrier to entry. If you can raise hundreds of millions and other cannot, in a category that&#8217;s capital-intensive, that&#8217;s absolutely amazing. However, the problem is it&#8217;s a big if. You need the right entrepreneur, you need to be at the right point in time in the macroeconomic cycle, which may change for reasons out of your control. So on average, yes, I much prefer asset-light businesses, with the caveat that not everything can be built in an asset-light way.</p> <p>Erik Torenberg:</p> <p>Totally. And so let&#8217;s talk about building marketplace businesses. There&#8217;s the business model. There&#8217;s the chicken and the egg problem. There&#8217;s go to market. What are some core principles of building a marketplace business in 2020 that maybe have stayed the same or maybe are different from 2015 or 2010?</p> <p>Fabrice Grinda:</p> <p>99% of marketplaces are demand constrained. So you start with the supply. The reason is the suppliers are financially motivated to be on the platform. They want to sell and they want to make money. And so you can go to them and say, &#8220;Hey, I&#8217;m launching this new marketplace. Today, I don&#8217;t really have any volume, but I&#8217;m not going to charge you anything. You will only pay me if I successfully send you a lead or a client that pays you.&#8221; Most people will say yes to that. So make sure that you highly curate your suppliers. You pick the very best suppliers and get going with that.</p> <p>Once you have that, find them a limited number of high-quality demand. Now, if you&#8217;re in a services or labor marketplace, you ideally want to represent, on an annual basis, 25% or more of the income of your marketplace. Do not go overboard if your supply. Because it&#8217;s easy to get supply, many marketplace founders have a tendency to say, &#8220;Okay, let&#8217;s get every single &#8230;&#8221; Let&#8217;s say you&#8217;re building a plumber marketplace. &#8220;Let&#8217;s get every single plumber in New York on the marketplace.&#8221; That&#8217;s a recipe for disaster because you&#8217;re not going to send them enough leads so they&#8217;re not going to be engaged and they&#8217;re going to churn out of your platform and they&#8217;re not going to respond to client inquiries.</p> <p>Instead, in one neighborhood, in one zip code, get the very best plumber. Make sure he&#8217;s engaged. Make sure he has the app. Make sure that every time he has a request, he replies quickly. If you can send him a meaningful percentage of his business, he will be using you and be active. And once you&#8217;ve made that work, then you get another one, and another one, and another one. So you always want to match your supply and your demand very carefully. It&#8217;s very easy to overload your marketplace with too much supply that churns because they&#8217;re not engaged and they&#8217;re not active. And if they&#8217;re not active, your demand side when they come is not going to have a great experience.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p> <p>You want the first transactions to be amazing and to set the tone and standard for transactions going forward. Nail it before you scale it. Launch hyper-local in a zip code or neighborhood and take it from there. </p> <p>Some marketplaces are innately national or global, in which case that&#8217;s fine especially since it&#8217;s cheaper to buy traffic and ads at a national level than a local level, but many businesses are local, in which case, really go hyper-local, like a neighborhood. Nail it there and then you go to the next neighborhood and then you go to the city. And then once you&#8217;ve gone to the city, you go to the next city.</p> <p>Likewise it often makes sense to start in a very specific well defined sub-category of your vertical before expanding to adjacent categories. For instance for your plumber marketplace you might want to focus on one specific type of plumbing jobs that you can easily price and measure quality for.</p> <p>Erik Torenberg:</p> <p>Totally. In a business model, do you have any favorite approaches?</p> <p>Fabrice Grinda:</p> <p>Yes. My favorite approach these days is to charge a commission. On average, people take 15% from the supply side, but there is a lot of nuance. The reality is you should be taking the commission on the more inelastic part of the curve. You should test the elasticity of demand and elasticity of supply and then take your rake on the more inelastic curve and so you really need to check for price sensitivity. But on average, it&#8217;s going to be 15% from the supply side, maybe start at 10% and increase to 15% over time.</p> <p>Another favorite trick of ours, especially these days, is to offer a B2B SaaS tool for free to lock in the supply or demand side. You offer for free a tool that others are charging for and build a marketplace on the back of it. </p> <p>For example, we are investors in <a href="https://www.fresha.com/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Fresha</a>. Fresha is a MindBody competitor. MindBody is an OpenTable for hair salons, barbers, spas, etc. They charge the store a booking fee for each customer reservation, similar to the way OpenTable does it if you are getting a table at a restaurant. However, most small business owners hate being charged when their existing customers are making a booking. </p> <p>So what Fresha decided to do is, &#8220;You know what? We&#8217;re going to give you the same product as MindBody, in fact, better and cloud-based, for free. We will not charge you for the customers that you send our way.&#8221; And instead, they said, &#8220;We will charge you when we send you new customers and we&#8217;re going to provide you a POS system that&#8217;s amazing and with lower billing fees than anyone else because we&#8217;ve aggregated the volume of tons of stores.” They&#8217;re now in the hundreds of millions of GMV per month using a non-traditional business model.</p> <p>Giving away a free SaaS tool in order to lock in the supply is amazing. It’s what I described about TCGplayer for their Magic: The Gathering business. They created a POS system for Magic: The Gathering, which they gave away for free to all the comic book stores, which led them to have all the inventory. Slice has been doing the same in the pizza space. Most pizza owners want to cook pizza and not do all the administrative work around running their business. Slice does all the work for them. They pick up the phone, create their website, help with packaging. They become their phone, web and mobile pizza-ordering provider. As a result they have a CAC of zero on the demand side as they are converting existing clients rather than acquiring new ones. So, yes giving away a SaaS tool that is an amazing trick to grow a marketplace.</p> <p>Erik Torenberg:</p> <p>Totally. I want to run through a few different spaces and get your take. These are new marketplaces. So one is home school, two is childcare, three is therapists, and maybe even a non-trained therapists like a listener or a coach. And we&#8217;re talking about monogamous, non-monogamous. All of these have potential for people to find a person and go off platform, but how do you think about these spaces?</p> <p>Fabrice Grinda:</p> <p>We actually looked at a lot of these. We thought for a long time about creating a childcare marketplace. Ultimately, we couldn&#8217;t quite make the economics work. I think, if I recall correctly, you needed a premise where someone could take care of multiple kids for the economics to work. </p> <p>We never got there. On the high end, there were people that would just hire the care directly or had it provided at work by their high end employers. On the low end, you&#8217;re competing with traditional daycare and there was no super effective way to create asset-light daycare or childcare. We&#8217;re like, &#8220;Okay, maybe we do it in people&#8217;s home, but for that we need to get them certified. How do we get them certified? Once they&#8217;re certified, do they need us?&#8221; And so we couldn&#8217;t quite crack the, how do we create a lock-in system and provide enough value after we certify them and find them clients. </p> <p>So we couldn&#8217;t quite make that work. We looked at elderly care as well. We were investors in a few of them. They all died once the California legislation came into place. They worked from a business model perspective as 1099s, but they didn&#8217;t work as W2s and they all went under. </p> <p>We also looked at different therapy marketplaces. For instance in physical therapy, there’s <a href="https://petehealth.com/" target="_blank" rel="noopener">K</a><a rel="noreferrer noopener" aria-label="u (opens in a new tab)" href="https://petehealth.com/" target="_blank">u</a><a href="https://petehealth.com/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">lagy</a> out of LA which is doing reasonably well. For psychologists you have TalkSpace, which is absolutely crushing it, as far as I can tell, given that you can get a therapist remotely for cheaper and with more convenience than if you&#8217;re doing it in person. For therapy, the key success factor, if I recall correctly, is actually getting reimbursed by insurance or paid for by the employer. It&#8217;s too expensive at $100 or $200 per hour for many people to afford it out of pocket. You have to demonstrate the value of the therapy either to employers in terms of productivity or absenteeism or to insurance companies in terms of lower medical costs to get it paid for by one of them. </p> <p>Note that we have not invested in any of the players in the category yet. We got close to a few, but we haven&#8217;t pulled the trigger. That said, I could see marketplaces working in the category if they find a way to get paid.</p> <p>For homeschooling, it feels like a monogamous relationship on a go-forward basis to the extent you have one tutor for a child, especially at the early ages. If it&#8217;s multiple tutors, it’s less of an issue. I also don&#8217;t know how big the market is. </p> <p>I suspect continuing education is the first place that&#8217;s going to be disrupted. It ridiculous that you finish college right after 22 or 23, and that&#8217;s it. You never get more education, even though the world is changing so quickly.</p> <p>Having online courses in order to complement your learning makes a lot of sense. Imagine you were doing marketing at a startup in 2000, you were probably doing display ads. Later, you had to do search engine marketing (SEM) on Google. Then you had to do Facebook. Then you had to do Instagram. Then you had to do video ads on YouTube, etc. That world completely changed and is continuing to change and you need to keep updating your skillset. What Teachable, Udemy and Lynda are creating make tons of sense. It&#8217;s easier to disrupt than existing schooling.</p> <p>Homeschooling is kind of a way of saying, &#8220;Okay, I&#8217;m not satisfied with the way the current K through 12 education system works. I&#8217;m going to create an alternative.&#8221; That said it has serious downsides. It’s harder for your kids to socialize. It’s also very expensive so I wonder how big that market ends up being. In order for the marketplace to work in that category, you probably want to provide a lot of value to the parent to make sure that the experiences that they&#8217;re getting from their tutor is on track with traditional schools. Despite the fact that it’s a monogamous relationship, if you can prove to the parent that the tutor is actually teaching in line with what colleges are going to be expecting in the future, then there is ongoing value, especially if you add other forms of tutoring on top. That said the monogamous relationship probably means your take rate has to be limited to something like 10%. You probably have to do payroll processing on behalf of the parent as well in order to increase your value. All things considered, I think it could work there, but I think I would have an issue with TAM. The real long-term solution, as a country, is to fix our K through 12 education.</p> <p>Erik Torenberg:</p> <p>Totally. And I&#8217;m curious what other spaces, you mentioned childcare earlier, that you&#8217;ve maybe considered incubating or got close to, but just couldn&#8217;t quite get there. I&#8217;m curious if you&#8217;ve looked at whether some of them might be in education or healthcare or public services, construction. What are some spaces you got excited about, but couldn&#8217;t quite pull the trigger on?</p> <p>Fabrice Grinda:</p> <p>As investors, we ended up investing a lot in the construction space because the user experience is really broken, both B2B and B2C. For instance we invested in a marketplace for architects to find contractors. We invested in <a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://toolbx.com/" target="_blank">Toolbx</a> for contractors to order products to be delivered the same day. If you are at a construction site and run out of two by fours, Toolbx will go and get it for you. We&#8217;re in a dump truck driver marketplace. If you need to remove all the debris for your construction site <a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://tread.io/" target="_blank">Tread</a> will take care of that for you. We are investors in <a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://www.trytoolbox.com/" target="_blank">Toolbox</a> which connects skilled construction workers to construction projects. </p> <p>Even though the experience has been broken for a long time, the “why now” is that many of the companies in the industry are family owned and are being taken over by millennials who expect to be able to transact online and are digitizing their businesses as a result. </p> <p>Logistics has a similar profile and we have been very active in the category. We were early in <a href="https://www.flexport.com/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Flexport</a>, and we invested in <a href="https://www.freightwalla.com/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Freightwalla</a>, which is an Indian digital freight forwarder. We also invested in <a href="https://www.leaflogistics.com/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Leaf Logistics</a> and many others. </p> <p>We have been less active in education, healthcare, and public services. It&#8217;s harder to attack regulated markets because the regulator is very slow and they are not necessarily trying to optimize for either extraordinary outcomes or efficiency. </p> <p>I liked disrupting education at the edges rather than the core because you don&#8217;t need to get approvals from the teachers’ unions or get public school to allocate budget to you. </p> <p>The same applies to healthcare. We invested in <a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://www.parsleyhealth.com/" target="_blank">Parsley Health</a>. I like One Medical and Forward. More people are wearing Apple Watches and Fitbits, creating tons of data. However, it’s not currently being used by the medical profession. People are using the information themselves. This is especially true in our world of entrepreneurs and VC where everyone is bio-hacking. We&#8217;re all tracking our sleep, calories eaten, trying different diets and trying to improve our health outcomes.</p> <p>I like this approach of doing it bottoms up, disrupting the category at the edges until the point that it has no choice but to affect the core. It doesn&#8217;t make sense that there&#8217;s so much pen and paper still in processes in medical offices. We consideredcreating a medical records encoding company to do it on behalf of doctors&#8217; offices. Every time you go to the doctor&#8217;s it&#8217;s incredibly inefficient. You fill out all the same papers. They have multiple people at the front desk only to deal with all these papers, file insurance claims, send them to Medicaid. It&#8217;s ridiculous how inefficient the process is. Ultimately, we couldn&#8217;t quite get there for a variety of reasons, but I can&#8217;t wait for someone to digitize that.</p> <p>Erik Torenberg:</p> <p>Totally. Do you think it&#8217;s not too late to build a big company in the dating space? How have you reviewed that marketplace opportunity?</p> <p>Fabrice Grinda:</p> <p>I mentioned earlier I didn&#8217;t like job sites because their objective is to lose their clients by finding them great jobs, it&#8217;s the same reason I don&#8217;t love the dating sites because, if they do a good job, they find you a girlfriend or a boyfriend and then they lose you. And if you end up breaking up, they often have to reacquire you. I think the average lifespan of a user on a dating site is six months because they do a pretty good job. Around half of marriages come from people who met on online dating sites. As a result churn is very high. You can build a high revenue business and in the early days, you had interesting viral loops, but I don&#8217;t like the churn component of these business. I suspect the LTV:CAC is not great. You can build a billion-dollar business in the category, but I don’ think you can build a $20 billion business, let alone $100 billion business.</p> <p>I like businesses where the better job the business does, the more their customers use it. For Uber, year one, you use it four times a month. Year two, you use it eight times a month. Year five, you use it 16 times a month, plus you started ordering on Uber Eats. So the revenue per user per month keeps going up, and up, and up. Who knows what the ultimate unit economics are? The problem with dating sites is, &#8220;Oh, I met someone I really liked and I got off the dating site.&#8221; Maybe you get back on it in the future, but the ultimate value they extract from you is pretty limited. It is a marketplace, but I don&#8217;t love it for kind of the same reason I don&#8217;t love the job sites.</p> <p>BTW that’s why I like staffing businesses more than job sites. You keep finding people good jobs and then earning a percentage of their income on a go-forward basis as opposed to losing them forever or for multiple years, at least if you find them a full time job on a traditional job site.</p> <p>Erik Torenberg:</p> <p>In closing, what&#8217;s your request for job startups? Besides RigUp, are there verticals that you are excited about, despite your skepticism? Or what other spaces in B2B, or perhaps more broadly, that you want to invest in or see more entrepreneurs build it?</p> <p>Fabrice Grinda:</p> <p>For jobs, we&#8217;ve done a lot of the vertical staffing marketplaces. We&#8217;re in Trusted Health for nurses. In a way, Meero is a photographer marketplace. Frankly if you are building a marketplace, you should reach out to us. We are the premier global marketplace investors and it really doesn&#8217;t matter the industry, the category, or even the geography, though we do prefer typically larger markets. </p> <p>Especially if you meet one of our theses, whether it&#8217;s a vertical or a marketplace pick model or a B2B marketplace, you should reach out. There is no specific industry or category we are looking at. We are business-model specific. If you are building a marketplace, we want to talk to you.</p> <p>Erik Torenberg:</p> <p>Awesome, that&#8217;s a great place to close. Fabrice, thank you so much for coming on the podcast. This has been a great episode. And for people who do want to talk to you, where should they reach out or where can they learn more about FJ Labs?</p> <p>Fabrice Grinda:</p> <p>We are very open and easy to find. You can find a lot of my thinking on my blog at FabriceGrinda.com. You can see our portfolio at FJLabs.com. It’s probably easiest to reach out to me on Linkedin. Even if you send us a cold email, we will review it if you are building a marketplace. </p> <p>Erik Torenberg:</p> <p>Awesome. Fabrice, thank you so much for coming on the podcast. It&#8217;s been a great podcast.</p> <p>Fabrice Grinda:</p> <p>Thank you for having me.</p>

<p>My conversation with Erik Torenberg was so rich that I decided to transcribe it for those who did &hellip; <a href="https://fabricegrinda.com/transcript-of-all-things-marketplaces/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;Transcript of All Things Marketplaces&#8221;</span></a></p>

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Transcript of All Things Marketplaces. Categories - FJ Labs, Marketplaces. Date-Posted - 2020-04-28T17:20:49 . My conversation with Erik Torenberg was so rich that I decided to transcribe it for those who did not want to listen to a 75 minute long podcast. I will use this transcription as the starting point on a series of posts on marketplaces covering: How FJ Labs gets its deal flowHow FJ Labs evaluates startupsFJ Labs&#8217; current investment thesis In the meantime here is the transcription. Erik Torenberg: Hey everybody. It&#8217;s Erik Torenberg, co-founder of Village Global, a network-driven venture firm. And this is Venture Stories, a podcast covering topics relating to tech and business with world leading experts. I&#8217;m here today with a very special guest and friend of the firm, Fabrice Grinda. Fabrice, welcome to the podcast. Fabrice Grinda: Thank you for having me. Erik Torenberg: Okay, Fabrice, you&#8217;re here to talk about marketplaces. You&#8217;ve been building and investing in marketplaces for over two decades now. Why don&#8217;t we start with sort of a backdrop and introduction? And I&#8217;ll start by asking you to sort of chronicle the evolution of marketplaces as you&#8217;ve seen it over the last couple decades. I know it&#8217;s a big question. You wrote a post about this in 2014. And, of course, even since then a lot has changed. But how has building and investing in marketplaces changed since you started doing it two decades ago? Fabrice Grinda: The first marketplace I came across was eBay and that was in the mid to late &#8217;90s. It was love at first sight. As an economist by formation (it’s what I studied at Princeton), I loved the idea that you could use marketplaces to bring transparency and liquidity to fragmented and opaque markets. If you go to the garage sale across the street, you&#8217;re not going to find what you&#8217;re looking for. If you&#8217;re trying to sell something, it&#8217;s not likely you&#8217;re going to find a buyer. But if you create a national or international marketplace, transactions are way more likely to be successful. The marketplace unlocks a massive amount of liquidity. That was the original marketplace, alongside Craigslist, but things have evolved dramatically. Especially in the last decade, there have been three major evolutions. The first evolutions that happened, which I described in the 2014 post, is the verticalization of marketplaces. People started realizing that on Craigslist or eBay, you could find a little bit of everything, but if you create a vertical-specific site that does the job better for that category, you&#8217;re going to have a much better experience. The original example of that was StubHub. You could buy and sell tickets on eBay and Craigslist, but on StubHub you had the seating chart for the venues, integration with the e-ticket providers and verification of the authenticity of the tickets. It was a significantly better experience. The same was true for Airbnb. Subletting existed on Craigslist before Airbnb existed, but they didn&#8217;t have a calendar. They didn&#8217;t have payments. They didn&#8217;t have reviews. As a result, the user experience was really broken. It was full of fraud. Airbnb really expanded the category. On Craigslist it was sub $1 billion a year and now it&#8217;s tens of billions a year. That verticalization has continued and it&#8217;s happened not just for products, but also for services. As mentioned eBay is being verticalized. You have a company like Reverb, a musical instrument marketplace, doing almost $1 billion a year in GMV (gross merchandise volume). They were acquired by Etsy last year. In services you have Thumbtack, Angies List or Home Advisor. They are being verticalized by companies like Block Renovation which created a much better experience for renovating your bathroom. You have companies like Upwork in the remote work category that allow you to hire remote workers for almost everything and anything that are being verticalized by companies like TopTal for programmers. The definition I use for a horizontal marketplace is a multi-category marketplace that covers many different things. In the job space for instance Indeed or Linkedin would be horizontal sites. In products it would be eBay or Craigslist. In food, Uber Eats would be a horizontal player, given that they offer multiple types of cuisine. But even that is being verticalized. You have companies like Slice, a pizza food ordering app or Chowbus, in the Chinese food space that are doing very well. What&#8217;s interesting is, if you ask me what is it that I believe today in 2020 that most VCs don&#8217;t believe, is that verticalization is only beginning. It&#8217;s in its infancy and it&#8217;s going to continue and the players in it are going to do well. Most investors think that these verticals are very niche. They can&#8217;t be very large from a market perspective but they are wrong. Pizza is a $43 billion a year market in the US, that’s more than enough. &nbsp;Now, what else do VCs believe? Most of them are going to tell you, you have Uber Eats, Seamless, GrubHub, and DoorDash. It&#8217;s incredibly competitive. It doesn&#8217;t make sense to have a vertical. All of them are losing money, it&#8217;s a bloodbath; but that&#8217;s because they put themselves in the shoes of a consumer. If you put yourselves in the shoes of a Luigi, the pizzeria owner, you realize that his needs are not being met by the existing incumbents. The way the pizza market is structured in the US, you have about a third that&#8217;s controlled by Domino&#8217;s, Pizza Hut, and Papa John&#8217;s. For them 85% of their orders come from online and they have big R&amp;D budgets. But the 50 thousand independent pizzerias that are owned by the Luigis of the world, half of them don&#8217;t have a website. The vast majority don&#8217;t allow online ordering. So Slice creates their website, can pick up the phone, answer questions on Yelp and do all the support functions such that Luigi can focus on cooking pizzas. The future of work is one where people will do the job that are meant to be doing and everything else will be outsourced and done for them. Slice is a great illustration of both a vertical marketplace and the future of work. By doing so, they&#8217;ve created a business that now does hundreds of millions in sales. In the same vein, we&#8217;re investors in a company called TCGplayer. It&#8217;s a Magic: The Gathering marketplace. When we invested many questioned how this could make sense. They felt the market was tiny. First of all, Magic: The Gathering is a lot bigger than you might think it is. What happened is that the founder owned a comic book store. And as an owner of a comic book store, he realized that the point of sales (POS) systems that were available didn&#8217;t manage all the different SKUs required for Magic as there are millions of SKUs. He built his own and he uploaded all of his inventory. He considered building a SaaS business but charging $100 / month to all the comic book stores would have only been a small business. Instead he gave the software away for free and all the comic book stores started uploading their inventory. All of a sudden, he had all the inventory of all the comic book stores and he offered them to sell some of it on his marketplace in exchange for 10% if it sells. Low and behold, it’s nearing $100 million in sales. These businesses may seem small. but If you provide an extraordinary user experience to at least one side of the marketplace – and ideally both – you can have much better economics and very low customer acquisition costs and end up dominating the category as you face little to no competition. Slice doesn&#8217;t pay for the end-users who buy the pizza. They&#8217;re just existing customers who start &nbsp;ordering online. You could be a large and massively profitable business this way. You are probably not going to build a $100-billion company, but you&#8217;re going to build extraordinary products with loyal, dedicated fan bases and amazing economics and you can usually expand from this dominant position into conjoint verticals addressing a larger TAM (total addressable market). That&#8217;s one big trend. Marketplaces have been verticalizing. They&#8217;re becoming ever more sophisticated and the user experience is ever-improving, which leads to the second big trend. Managed marketplaces are all the rage. The issue is that the term has come to mean everything and anything. The type of managed marketplace place we love to invest in is one where the the marketplace picks the supplier for you. We call them marketplace pick models. Imagine an old-school marketplace. I need a plumber. I go to Thumbtack and 300 of them apply. You need to sort through the plumbers. Or if I want to hire a PHP developer, I go to UpWork. Hundreds of them apply. I need to sort, review and select. From a marketplace design perspective, that methodology is called double commit. Both the supply side and the demand side need to interact with each other, pick one another, and agree on a transaction. It&#8217;s easy to have listing, but there&#8217;s a lot of friction in getting a transaction to happen. On Craigslist, you list an item. A hundred people contact you and then you need to meet in person, etc. The marketplaces I love best these days are “marketplace pick” models, meaning the marketplace picks the supplier. The marketplace knows who has availability in your neighborhood, who would be the best match for you. Think of Uber: when you say you want to go from point A to point B, you don&#8217;t pick your driver. Uber picks the driver for you. It&#8217;s not the drivers who pick themselves. Uber sends a notification to a driver indicating this ride is available for them if they want it. It&#8217;s the marketplace that picks. What do I believe that most VCs don&#8217;t believe? Most VCs believe the “marketplace pick” model is great for commodity-type jobs, like an Uber driver, but that this cannot work for high-skilled labor, like programmers. I posit that this is not true. If a company has a selection process they use to select people, we can replicate it. In fact because we have more data and are doing a lot more recruiting in this specific vertical, we can do a much better job at it. For instance if a medium sized company needs to hire a SEO expert. It’s the type of hire they will only do once. However a company like Advisable will place many of them and will be in a better position to pick the right person for your needs than you are. We&#8217;ve invested in many of these “marketplace pick” models. We&#8217;re investors in a company called Meero. It&#8217;s a photographer marketplace. Airbnb says, &#8220;I need a photographer at Erik&#8217;s place next Tuesday at 2 p.m. because he wants to list his place.&#8221; Meero picks the photographer. Again, thinking about the future of work: what does a photographer want to do? He wants to take photos. What does he not want to do? Create a website, do marketing, find clients, do invoicing, do post-processing, editing, retouching, and sending the images. Meero will do all that for the photographer. Even though they have a 50% take rate, the photographer is happy as he makes more money than he would otherwise doing only the part he loves doing, Airbnb is happy, and Meero is, of course, very happy. The same is true of a company like Rev.com. Rev.com is a transcription marketplace. To transcribe our conversation today, you send the recording via their app and pay $1.25 per minute. You don&#8217;t pick the transcriber, Rev.com picks the transcriber, then sends you the text. They take a high take rate, but because they provide tools to the transcribers, everyone&#8217;s happy. It also allows the transcribers to do their job better. In this “marketplace pick” model, the marketplace picks everything. They pick your general contractor, your plumber, your Uber driver. This is a massive trend that we&#8217;re following and investing in. We&#8217;re still at the very beginning of it. What people objected to in marketplaces was the amount of work it took. If you go on Amazon and you&#8217;re buying a product, everything works very beautifully, seamlessly in one click. Though, in many cases, Amazon is also a marketplace. So, if you do enough of the work and you can hide it effectively, you can create experiences for end users where it looks as though the marketplace is the provider of the service, even though it actually is a marketplace model. This way, you can build a company a lot faster. The key success factor of these marketplaces is rather different than the key success factor in normal marketplaces: you need to highly curate your supply because you are picking the supply on behalf of the demand. You need to pick the very best providers and match effectively. That&#8217;s key. If you do it well, you&#8217;re doing a good job. The third big trend, which is only emerging over the last four to five years, is B2B marketplaces. The internet took the consumer world by storm and we ended up having these extraordinary experiences and extraordinary sites, like Instagram, Google, Airbnb or Uber. When you look at the way most companies still transact, especially the large-scale companies, it&#8217;s still a lot of Rolodex and Excel spreadsheets and relationships. There&#8217;s no online pricing or online ordering. Nothing&#8217;s been automated. We&#8217;ve been investing in B2B marketplaces that are either in the industry itself, for instance Knowde – a petrochemicals marketplace – or we&#8217;re investing in the supply chain of an industry. For instance, we&#8217;re investors in RigUp &#8211; an oil labor and worker marketplace where oil services companies and oil companies can hire contract laborers, like welders. In a way RigUp is the trifecta: it&#8217;s a vertical job marketplace that is marketplace pick and B2B. It’s all three of our current theses. We&#8217;re still at the very beginning of these three trends. Last year, we invested in 124 startups and the vast majority of them were marketplaces. Many people thought, “marketplaces are all done”. It&#8217;s completely wrong. We are at the very beginning of the internet revolution. Only 15% of the commerce is online, the largest components of GDP have not been digitized at all: healthcare, education, public services, construction. In all of these marketplaces have a primordial role to play. &nbsp; I published on my blog an article in 2019 on the latest trends in marketplaces. You can watch the keynote or check out the slides there. Not only do I present these three theses, I also go through what&#8217;s going on in food, cars, real estate, labor, services and lending marketplaces. Erik Torenberg: Totally. It&#8217;s fantastic post. I will link that talk in the show notes. There&#8217;s a lot to get into. To zoom out on and close the loop on&nbsp; the historical perspective, you had a post where you said the different phases were: horizontal, then we went to vertical, then vertical transactions, then end-to-end vertical transactional. Andressen Horowitz has a post where it says it went from listing era, to the unbundled Craigslist era, to the Uber for X era, to the managed marketplace era, to whatever&#8217;s next. Do you have commentary on either of those or how that&#8217;s evolved? Fabrice Grinda: Yes, the horizontals went from listing-based, where you put a listing on Monster.com or Craigslist. Then transactional, where you can buy online – that would&#8217;ve been StubHub, eBay, Airbnb, to the verticals of those, then to the managed marketplaces, which meant they intermediated the transaction in some way, shape, or form. But to me, they&#8217;re subcategories of the three theses that I&#8217;m investing in. It&#8217;s a correct historical analysis of how marketplaces evolved. Today, you have elements of all of these in the three theses that I&#8217;m following. When I&#8217;m describing marketplaces becoming marketplace pick, it means they&#8217;re mostly going listing-based to ones where the marketplace is picking the supply. In fact, I could argue that there was an intermediate step between listing-based to demand pick. From the buyer picking his supplier to, now, the marketplace picking the supplier for you. I think all of these are correct but where are we today? I think the verticalization is continuing and accelerating, including things that are considered niche, a la the Magic: The Gathering. The listing-based ones will have to evolve if they&#8217;re going to survive in a world of higher-quality experience marketplace pick verticals, but they are not going to disappear. The reason they&#8217;re not going to disappear completely is they have a CAC (customer acquisition cost) of zero. Craigslist does not pay to acquire new customers, they come organically. For your marketplace to work, you need your unit economics to work. This means you need to recoup your fully-loaded CAC on a net contribution margin basis after 6 months and ideally triple your CAC after 18 months. There are some categories where the average order value is so low and where the recurrence of transactions is so low that it probably does not make sense to have these beautiful, extraordinary, vertical marketplaces because you cannot make the economics work. It’s why Shyp didn&#8217;t do well. For instance, a fire alarm system installation marketplace doesn&#8217;t make sense because the average order is low. It&#8217;s pretty expensive to acquire this supply and the demand, and you only need the installation once. Horizontals are not going to disappear, but the highest-value categories where great experiences can be created will be verticalized. The market is evolving. If you look at Craigslist traffic, their traffic is down 30 &#8211; 40% over the last four to five years, though it’s partly because they&#8217;ve had to close down a number of their Personals categories. Erik Torenberg: You&#8217;re big on verticalization. Does that mean you&#8217;re dubious on building horizontal marketplaces today? Is it a matter of timing or are you just, in general, more excited about verticalization? Would you have passed on Thumbtack? Are you dubious on these types of horizontal businesses? Is it a timing thing or is it a structure thing? Fabrice Grinda: It&#8217;s more a timing thing. When Thumbtack was created, there was no horizontal to do this. It made sense. If you can win the horizontal, you create more value than if you win the vertical. So if you have to choose, you want to build the general horizontal marketplace. You get more users, you have ultimately a lower CAC. That&#8217;s a total natural monopoly, but once you have an incumbent that has liquidity and they have scale and network effects, it&#8217;s hard to break in. OfferUp and LetGo have been trying to break in the Craigslist business with that much success as might&#8217;ve been expected, partly because they&#8217;re competing against each other instead of being one company, but also because, despite its horrible user experience, Craigslist works. They have liquidity. At the end of the day, in these businesses, user experience is less important than liquidity. Because Craigslist has liquidity, people still use them despite the fact they don&#8217;t moderate content. If the option is there, I want to build, own, or invest in a horizontal marketplace. That&#8217;s the biggest outcome. Also, if you&#8217;re a really smart player as a horizontal, you then verticalize. OLX, which was the company I built, has five thousand employees and 350 million unique visitors a month in 30 countries. It’s really Craigslist 3.0 for the rest of the world. It&#8217;s what Craigslist would be if they were mobile, moderated all their content, didn&#8217;t have any personals, murderers, prostitution, spam, and scam, and actually cared about the outcomes for the users. OLX has 350 million uniques a month and that&#8217;s extraordinary. The strategy there was: win the horizontal C2C (consumer to consumer) used goods transactions because people transact regularly and keep coming back to the site. Once we won that, we then launched C2C cars, which allowed us to launch B2C cars and win that category. Then we launched C2C real estate, then we launched B2C&nbsp; real estate. Often we also launched either services or jobs. Now, we didn&#8217;t win everywhere in every country. In countries like Russia, we ended up winning every vertical in addition to the horizontal. You start by horizontal then you use it as a launching pad because your cost structure or customer acquisition cost is much lower than any else’s. Since you&#8217;re in a category where people are using you every month, you can launch the verticals if you do a really good job. In the US specifically, we&#8217;ve had two players that have been largely incompetent. You&#8217;ve got Craigslist, which has not improved their UX UI, has not verticalized, has not created better experiences. And eBay, which has been ineffectively managed because they&#8217;ve been trying to be an Amazon competitor even though everyone in the world knows they&#8217;re not going to beat Amazon. And yet they&#8217;re investing all this money in selling you goods. 80% of goods on eBay these days are new. That makes no sense. Sure, they offer long-tail, Chinese goods, that are somewhat differentiated from Amazon. But they strayed away from their original core and never verticalized properly. In other countries around the world, the horizontals have totally gone vertical. The verticals are easier to build, but the network effects are not as strong, especially in the marketplace pick model, you have logarithmic network effects. Let&#8217;s say you are calling an Uber in a given city and your wait time is 10 minutes. If you increase the supply enough that your wait time is four minutes, that&#8217;s a massive increase in value. But increasing supply more to go from a four-minute wait time to a three-minute wait time is not that much more valuable. And because you don&#8217;t need that many suppliers to cover any given market, the barrier to entry is somewhat lower. Whereas in classifieds or auctions, it&#8217;s a total natural monopoly. You have one player that wins and has all the liquidity. It&#8217;s also relatively true in the verticals that are not marketplace pick, but it&#8217;s less true in these marketplace pick models. To summarize: if I could own the horizontal, I would own the horizontal and then I would verticalize. I would rather be HomeAdvisor than Block Renovation. I would rather be eBay than Reverb. But, then you should be doing a good job at verticalizing, which these incumbents have not done. That said, I don&#8217;t see any obvious horizontals that I would launch now. I was involved with a company that ultimately became LetGo. We tried to attack Craigslist with a lot of money and a much better product at every level. It has done well, but it&#8217;s not disrupting Craigslist. It has not had the outcome that we had expected when we launched. Erik Torenberg: Yeah. Do you see LinkedIn similar to Craigslist? I guess it just has such a first mover advantage. Fabrice Grinda: Absolutely. LinkedIn is a marketplace for jobs, essentially, and it&#8217;s horizontal. It&#8217;s interesting because it got there indirectly. It built a social network for business, that then became a job site. And being the repository of people’s profiles actually allowed them to become that. Clearly, there&#8217;s a trend for job sites to verticalize. We&#8217;re seeing a lot of sites going after hiring developers, like Hired and Vettery. We&#8217;re seeing a lot of sites, especially in the staffing categories, that are going after the verticals. We’re in Trusted Health, a nursing marketplace. Of course, we&#8217;re in RigUp, the oil worker marketplace. Staffing is unique for a variety of reasons, but it&#8217;s only a small percentage of overall employment in the US, at around 6%. Outside of staffing, job sites have not been great businesses. And obviously, you&#8217;re going to tell me, &#8220;Wait a minute, I&#8217;ve looked at the Indeed.com or Zip Recruiter’s P&amp;L, and they&#8217;re doing really well.” The thing is, they don&#8217;t seem to have network effects because a business that has network effects is one where, over time, the more users you have, the more it attracts other users and your customer acquisition costs go down. But the problem with job sites is that, if they do their job well, they find you a job. And so you lose you as a customer and you need to reacquire you next time you are looking for a job. Often, job sites look like outsourced marketing companies, meaning the large employer like Walmart or a small employer like Luigi’s Pizzeria could put their own ads on Google, Facebook, etc to attract candidates. However, they are no very good at doing this. The job sites do this better for them, but end up merely being arbitrage business. They are simply buying ads more effectively than their clients would and are reselling them the candidates at slightly higher prices. These businesses are good, but they&#8217;re not great. They don&#8217;t have amazing networks effects. So, most of them have not built a LinkedIn. LinkedIn is great because they have true network effects. The only job site that really has network effects and is disproving my assertion that most job sites are actually outsourced marketing companies is RigUp. RigUp has become the defacto standard in oil. If you are in that industry, this is where your profile lives. It’s not on LinkedIn. This is where people look at your reviews, your experience, etc. It is doable, but it requires real deep sector expertise and in a category that&#8217;s large enough where it makes sense. Rigup is a great exemple of how to successfully attack and verticalize Linkedin. Erik Torenberg: If the idea is that every horizontal company should also then verticalize once they dominate, is it similar that every vertical company, once they own the verticals, should try to horizontalize? Fabrice Grinda: No, but they should go to adjacent verticals. TCGplayer – the Magic: The Gathering marketplace – is now in Pokemon. Pokemon, is now 30% of their GMV. Reverb started with guitars and later became music instruments writ large. In fact, Etsy bought Reverb, to enter another vertical. So I would say, go into adjacent verticals to increase TAM, but don&#8217;t go horizontal. That&#8217;s a recipe for disaster and losing your identity. Erik Torenberg: Totally. And so if the “why now?” for going vertical is that there are already a bunch of big horizontal incumbents, what&#8217;s the “why now?” for the marketplace pick strategy or the B2b approach? Why wasn&#8217;t the “why now?” in 2014 or in 2024 or 2025? Fabrice Grinda: In order to do marketplace pick, you need to have a matching algorithm that&#8217;s really good. You need AI to be at a point where you can actually replicate the recruiting methods of different verticals. B2B should have happened 10 years ago, it&#8217;s just that businesses are conservative and move extremely slowly. But the “why now?” is, it&#8217;s a massive comparative advantage if you‘ve digitized procurement. If you digitize your online sales, your supply chain and your competitors have not, you can extract efficiency. You can source lower costs, and you now have the examples of it having happened in the consumer world. Of course, it&#8217;s harder because you need to create a behavior change. And so the people, the type of entrepreneurs that succeed in these B2B marketplaces are people that come from the industry, but want to change it. They can get buy-in if they are connected well. It&#8217;s less likely to be the 25-year-old Stanford grad who decides he wants to build a dump truck driver marketplace. It&#8217;s more likely someone who actually came from that industry. &nbsp;And, we are, believe it or not, investors in a dump truck driver marketplace.&nbsp; Until I spoke to the founder, I didn&#8217;t even know this market existed. It&#8217;s a $37 billion a year market! The next “why now” is that many are mom-and-pop, family-owned businesses. They used to be owned by boomers, who are not very tech literate. But as these companies are now being handed over to the next generation – the millennials – they are completely tech-savvy. The idea that they&#8217;re going to be running a construction firm without having online ordering of underlying items, without having online visibility into project management, etc, is nonsencical. They&#8217;re tech-savvy and digital natives and they want to bring that digitalization to their companies. This is true, whether you&#8217;re a millennial inheriting or coming into the family business, or whether you&#8217;re the next generation of leaders in the corporate world coming in. The number of CEOs in their 60’s, 70’s, and 80’s, who are still not dealing with email and who have a secretary bring their email to them and are not super tech-savvy is mind-bogglingly large. But as the leaders who are in their 30’s, 40’s or 50s are coming into leadership positions of larger companies, I think they&#8217;re absolutely going to start digitizing their companies. It’s astound how little has happened to date. Erik Torenberg: Totally. You&#8217;re a thesis-driven investor. And so what types of marketplace businesses are you not interested in looking at or not interested in investing in, even within your thesis? Even within the ones that are B2B marketplace vertical and ones outside that. I presume you&#8217;re doing some consumer marketplaces still, correct? Fabrice Grinda: Absolutely, we didn&#8217;t do TCGplayer that long ago. Three years ago, I talked to them for the first time and they were vertical, but they had no real tech. I said “great, but I don’t see a moat.” And to his credit, that founder went in, spent all his money, built an amazing product, and basically locked up the supply. Then he convinced me to invest. We still do a fair amount of consumer because I still think we can create amazing consumer experiences. For instance, in the vertical food space, we&#8217;re in Chowbus, a Chinese food ordering app and they&#8217;re doing really well. Erik Torenberg: What makes something that you would not invest in? Fabrice Grinda: To evaluate companies, we have four criteria.&nbsp; These four criteria are: Do we like the team? Do we like the business? Do we like the deal terms? Does it meet our investment thesis? The first three need to be collectively true. If any of them is not true, we&#8217;re not going to do it. If you have an amazing business and amazing team, but the valuation is too high, we&#8217;re not going to do it. And if the team is amazing, the valuation is reasonable, but we don&#8217;t like the business, we&#8217;re not going to do it. We are a bit less strict with the fourth criteria of meeting our thesis. 70% of what we do is thesis-driven, 30% is other things that we think are cool. That obviously evolves, over time. For instance there was a period where we were doing D2C brands. Also, if you are a founder who has been successful for us in the past, we will back you no matter what you do. Given that we invested in almost 600 companies and had 200 exits, many of these founders are at it again. We back them no matter what, and that leads to a number of investments outside of our thesis. Now, the three evaluation criteria. So one, do we like the team? Now, every VC in the world will tell you, &#8220;I invest in extraordinary talent and amazing teams.&#8221; The thing is, what does that mean? What&#8217;s an amazing founder? For us, it&#8217;s really someone who exhibits three traits. One, someone who&#8217;s an amazing storyteller. Storytelling skills are absolutely key because if you can actually weave a super compelling story, you&#8217;re going to attract more capital at a higher valuation. You&#8217;re going to get more PR and more business partnerships and you&#8217;re going to attract better talent to your company. But, that&#8217;s not enough because if that&#8217;s all you have, you may raise a lot of capital, but you many not build a very profitable, successful business. Number two, we want people that are numbers-driven and who are quantitative. You&#8217;d be surprised that the Venn diagram of people that are numbers-driven and also great storytellers is actually rather small. There are amazing, numbers-driven people who understand their unit economics extremely well, but can&#8217;t tell a story, so they can&#8217;t raise money. And we really want both of those to be true. And then three, we want to back people who have demonstrated grit and tenacity in their background. In the course of my one-hour conversation with a founder, I&#8217;m pushing really hard to see that they can actually hold their own and are willing to say that they don&#8217;t know as opposed to crumble. If you crumble, you&#8217;re not ready for the difficulties you&#8217;re going to face as a founder. Me questioning your assumptions is nothing relative to the difficulties you&#8217;re going to face. So that&#8217;s one. Number two, do we like the business? Now, do we like the business has a number of variables. What is your total addressable market size? What is the business model? But there is one thing we care above all else: what are your unit economics? For us, good unit economics are a business where you (a) recoup your fully-loaded CAC on a net contribution margin basis in the first six months of the business and (b) 3x your CAC after 18 months. Ideally, you don&#8217;t know what your LTV:CAC ratio is because you have negative churn. So maybe after 18 months, you&#8217;ve lost 50% of the customers, but the remaining 50% are buying more, and more, such that maybe your LTV:CAC is 10:1 or 20:1 . We&#8217;re seed and pre-seed investors for the most part. We do every stage, but we&#8217;re 65% seed/pre-seed, 25% A/B, and 10% late stage. As a result, most of our companies have not been live for that long and some are pre-launch. So if you&#8217;re pre-launch, I want you to be able to articulate what your theoretical unit economics are going to be, but not just based on putting your finger in the air and guessing. Instead, you’ve done unit testing on a limited marketing budget and the CPC was $1 and 10% of the people who came to the site signed up saying they were interested. That&#8217;s a $10 CAC and we think 10% of those will buy. It&#8217;ll be $100 customer acquisition cost. On the flip side, we know that the industry average order value is $300 and, we&#8217;re taking 20% and on that 20% we have a 66% margin. So 20% of $300, is $60, and you have a 66% margin, so you&#8217;re making $40. And we know from the industry average that people are buying this four times a year. So you&#8217;re recouping the CAC after nine months. And again, you better be telling me industry averages. If you&#8217;re trying to pitch me that you&#8217;re going to be way above the average for whatever reason, I&#8217;m less likely to believe you. Now, there&#8217;s another case where I&#8217;m willing to back you, even if the unit economics are not there, if you have a compelling reason as to why, with scale, you&#8217;re going to get there. So maybe you&#8217;re telling me, &#8220;Hey, I&#8217;m currently doing one delivery per hour and my delivery guy is costing me $15 bucks an hour. That said, with scale, I&#8217;m going to be able to deliver three times an hour and that&#8217;s very reasonable because of XYZ which shows that this is something I&#8217;m going to reach very easily with a little bit more scale. Then my delivery cost is $5 bucks per hour, at which point my unit economics work.&#8221; So either unit economics are there already, unit economics are going to get there with scale, or they&#8217;re theoretical, but they theoretically make sense and you could argue them very well. I&#8217;m very unit-economic driven. If you launch and you don&#8217;t have a business model, you don&#8217;t know how you&#8217;re going to monetize, I&#8217;m not going to fund you. If you launch and you may have massive GMV, massive traction, etc, but if you don&#8217;t know your unit economics and you don&#8217;t know when you&#8217;re going to monetize, I&#8217;m going to pass. I passed on many companies that ended up doing really, really well. It&#8217;s just that, when they came to see me, they didn&#8217;t have that figured out. If you invest in things that don&#8217;t have business models, most of them will fail and it&#8217;s not the way I operate. To date, we made money in around half of our investments because we&#8217;ve been very disciplined both on that and on valuation, which brings me to point number three: we want the valuation to be reasonable. Obviously, “reasonable” means I have a model in the back of my head of what is an appropriate level of valuation from an appropriate level of traction. Now, there&#8217;s massive variation in the numbers I&#8217;m about to give you because if you&#8217;re a second-time founder and you&#8217;ve done really well the first time, you&#8217;re going to command a higher valuation. If you are growing faster than average, you&#8217;re going to command a higher valuation. These days, for the most part, we&#8217;re seeing if you&#8217;re pre-launch and you&#8217;re raising a $1 million pre-seed round, the average pre-launch valuation is going to be $4-5 million for a first-time founder. If you&#8217;re post-launch and you&#8217;re raising your seed round, you are typically doing $150K a month in GMV, for a business with a 15% take rate, and you raise $3M at a $8M pre money valuation. And with that, I expect you to get to $650k GMV in the next 18 months. Then you&#8217;re going to raise your Series A and you&#8217;re going to raise $7M at $25M post. And with that, you get to $2.5M a month in GMV and you can raise your Series B at $20M on $50m, pre or $70M post. This is the median. The standard deviation is really wide because for the best companies that grow faster than that, their A looks like a B. In that case, at your A you may raise at $30M. There&#8217;s so much capital available in the later stages that if you are growing really quickly and have a compelling story, you might bypass some of these stages. However, this is the median for most deals, especially in the vertical marketplaces because many of the VCs don&#8217;t believe they can necessarily be big enough to warrant putting much capital into them. But all of these three things need to be true. You need to have a reasonable valuation, good unit economics, and an amazing team. And if that&#8217;s the case and you meet our thesis, we will invest. We decide in, maximum, two one-hour meetings over the course of a week. If I am on the call, very often, after a one-hour meeting I will tell you on that very call whether we are investing and why. Erik Torenberg: And on the deal terms, is there any science behind those numbers? Or is it, “hey, that&#8217;s what market is and that&#8217;s what we think is fair?” Fabrice Grinda: We don&#8217;t lead deals. We just join other people&#8217;s term sheets. As a result we invest relatively small amounts to make sure other VCs don’t see us as competition. We want to be friendly with all VCs and share our deal flow with them at every stage. We make sure not to compete with them for allocation. As a result we have no minimum ownership requirements. We try to invest $250K at pre-seed, $500K at Seed, $800K at the Series A, $1M at the Series B, and $1.5 million at Series C. The deal terms I gave you are not our justification of why they should be that. It&#8217;s where the market is today in the categories that I&#8217;m investing in. Erik Torenberg: Yeah. And you mentioned the unit economics and you think a lot about that. How did you come to those sort of specific numbers in terms of your framework? And what mistakes do marketplace founders typically make, as it relates to unit economics? Fabrice Grinda: The mistake is easy. The mistake people make is they overvalue GMV growth, but they undervalue net revenue and unit economic growth. There are periods of time where there&#8217;s a lot of capital available and people value GMV growth. Uber would not have been funded had that not been true when they were fundraising and their unit economics were underwater for a long time. But the problem is, if you&#8217;re growing negative unit economics, frankly, it&#8217;s easy. If I create a business where every time you give me a dollar, I give you two dollars, I can create a very big business very rapidly. But that&#8217;s never going to be profitable. So you need to really make sure that you have customer acquisition channels that are effective, scalable and profitable. Then you can, ultimately, at scale, turn this into a very profitable business. Many of the companies we pass on, it&#8217;s a unit economic problem. The unit economics are too marginal and I don&#8217;t see how they get there, even at scale. Scale just makes the problem bigger. So the mistakes people make, they try to grow with bad unit economics too quickly. I&#8217;m a very big believer in nail it before you scale it. Launch a city, nail the city. Once the unit economics work for the city, you&#8217;ve created a playbook for owning a city, launch the second city. Make sure that your playbook works there, too, and keep going. Often, people think that it&#8217;s a land grab so they launch very quickly in many different places, but if you&#8217;re growing really quickly without a playbook, with negative unit economics, the only thing you&#8217;re doing is increasing burn. It doesn&#8217;t make sense. Now, once you have a playbook that works, actually go for it. Put the pedal to the metal and go crush it, but I wouldn&#8217;t recommend doing that before you are ready otherwise you increase the risk of blowing up mid-air. If you have underwater unit economics, at some point, if market sentiment turns, you&#8217;re not going to be able to raise, especially if you raised too much money at too high a price. You’ve basically dug a grave for yourself. So that&#8217;s the big mistake that most people make that I would recommend avoiding. Erik Torenberg: And some people say it&#8217;s okay to have low margins, but what really is important is to focus on the payback period because you could make it up in different ways. Is that accurate? Fabrice Grinda: Well, your effective take rate and your effective margin are not that necessarily important. I do want you to be able to 3x your CAC in the future. But, yes. Payback matters a lot because I&#8217;m way more likely to believe that you&#8217;re going to have an LTV:CAC of 4:1 or 5:1 if you&#8217;re paying back in six months and then you&#8217;re doing 2x on your CAC in 12 months than if you tell me, &#8220;Well, I&#8217;m going to recoup my CAC in three years, but don&#8217;t worry. After that, it&#8217;s going to be a straight line to the moon and it&#8217;s going to be 100:1.&#8221; My belief of that is very low, but if you actually can recoup your CAC quickly and the channel you&#8217;re using is scalable, I definitely want to fund that. Then, I think there&#8217;s something there and we can grow. As a VC, I like to fund growth. If you have a channel that works, with good economics, you nailed what you need to do operationally, and all you need is more gasoline to pour on the fire, that&#8217;s exactly what I want to invest in, regardless of stage. If you&#8217;re at seed, all you need to do is get to the numbers that get you to an A. So I want to fund you to go from that $150k to $650k / month in GMV. If you&#8217;re at A, I want to get you to your B. You need to get from $650k to $2.5M a month. And if you&#8217;re at B, then it&#8217;s different because you can create optionality. You can go for profitability or you can do a C to keep growing quickly depending on how big the market is and what makes the most sense for you. Erik Torenberg: Why is the six-month number important? Fabrice Grinda: The what number? Erik Torenberg: You said 3x CAC within six months. Is that what you said? Fabrice Grinda: No, no, no, no. That would be amazing, but that&#8217;s almost never the case. No, no. Recouping CAC in six months. Erik Torenberg: Oh, my mistake. My mistake. Fabrice Grinda: You recoup the CAC in six months, then you 3x the CAC in 18 months. In the B2B businesses, by the way, it&#8217;s a little bit different because sometimes they have a pretty long sales cycle and your salespeople cost a fair amount of money, but they churn very little. There, it&#8217;s okay if your time to recoup your CAC is longer, as long as your churn is low. If you can prove to me these people are almost never going to churn and, in fact, you have negative churn because you not only you lose almost no logos, your existing customers buy more and more, then I&#8217;m happy to have somewhat different numbers. So in the B2B businesses, I use slightly different metrics. Erik Torenberg: What did you believe that you no longer believe about D2C brands, in terms of when you were investing in it versus not anymore? Fabrice Grinda: Well, even in D2C brand investing, I was always numbers-driven. I always liked the subscription businesses better than the unique product sales. So I prefer a, say, contact lens subscription to buying a mattress. Mattresses have a high AOV (average order value) but you&#8217;re buying it once and it&#8217;s harder to make the economics work with a one-time purchase. That said, there are some things that are better suited for subscription than others. So if you&#8217;re telling me birth control, sure. Erectile dysfunction, not so sure. I mean, do you really need to take Viagra every day? I&#8217;m not so sure. Hair loss, absolutely as you need to use the product daily. The problem is that the costs and complexity of launching D2C brands has gone down so much. In the grand scheme of things, that&#8217;s an amazing thing for consumers as you have more products available at a higher quality and lower price than ever before. As an investor, though, often it becomes a race to the bottom on price and a race to the top of increasing CPCs on Google and Facebook and Instagram. Also there&#8217;s an amount of serendipity and luck in which brands hit. So it&#8217;s hard to make the economics work. And as a numbers-driven investor, there&#8217;s very few D2C brands that I think are compelling enough that they make sense to invest in because it&#8217;s just too easy to launch a competitor and too many of them get funded and the economics are not great. Erik Torenberg: Is it fair to say you only want to invest in businesses that have a high frequency or a high AOV? Fabrice Grinda: Absolutely. You need one of those two things otherwise the economics don&#8217;t work. If you have low frequency and low AOV, you&#8217;re just not going to be able to recoup your CAC and very few businesses can actually grow without paid acquisition. Erik Torenberg: Is this why a model like Homejoy didn&#8217;t work? Fabrice Grinda: Absolutely. Homejoy didn&#8217;t have enough recurrence and had a low AOV. There&#8217;s also another problem with Homejoy. So the ideal marketplace design is one where the demand side has a non-monogamous relationship with a supplier, meaning you have different suppliers every time you use them. For instance you have a different Uber driver every time you ride. Maybe the Uber driver would like to drive you everywhere, but the problem is that&#8217;s not what you want because he&#8217;s not going to be available when you want, at all times. However, if you have someone cleaning your house, it&#8217;s actually different because you need to trust them. If they do a good job, and it&#8217;s the same person coming over and over again, you&#8217;re more likely to disintermediate the marketplace and have a direct relationship, especially if the marketplace is taking 15% or 20%. In the case of monogamous supplier relationships, the marketplaces need to have very specific and explicit value to avoid this disintermediation. In the end Homejoy didn&#8217;t provide enough value to either sides of their marketplace and had low AOV and too low recurrence. Erik Torenberg: How about when you look at Beepi and Sprig? Are there other companies who do those same things that will be successful, at some point? Or are those markets just too hard? Fabrice Grinda: Those are two different problems. Beepi was a prototypical example of founders thinking it was a land grab when it wasn&#8217;t. So they were like, &#8220;Oh, my god. There&#8217;s Carvana, Shift and Vroom. We need to go to all these different markets as soon as possible.&#8221; Beepi was actually a really good business in the first three cities they were in; in LA and SF and Tucson or Houston. They were doing really well. They had good economics, but then they exploded their burn and grew too quickly out of control. People loved the experience. There are a number of ways that the marketplace was designed that could have been better and more capital efficient, but it was a great product. The problem was a misreading of the tea leaves. I think they should have burnt a lot less money, grown slower, but kept nailing it and scaling it. Also, they raised too much money at too high a price. They were priced for perfection. If you are an entrepreneur, especially a first-time entrepreneur, there&#8217;s a temptation to just raise the most money at the highest price possible. Let&#8217;s say a VC tells you, &#8220;Okay, I&#8217;ll give you $10M at $40M pre, $50M post,&#8221; and the other one will tell you, &#8220;I&#8217;ll give you $20M at $80M pre, $100M post.&#8221; And in both cases, it&#8217;s the same dilution. It&#8217;s 20% dilution. So you&#8217;re going to be like, &#8220;Wait a minute. I should always take the $20M at $80M pre, $100M post.&#8221; The thing is, if your intrensic value is a lot lower than that, you need to grow into the valuation. If for whatever reason, you do well, but you don&#8217;t actually grow into it, then you screw yourself. There are anti-dillution provisions in down rounds and most people prefer to avoid them so instead of a down round the company does not get funded and dies. So Beepi was a combination of expanding too quickly with bad unit economics in many different cities, burning too much capital, and raising too much money at too high a price. Sprig had a different problem. They created their own kitchens to deliver to you in 15 minutes, low-cost meals, which turns out to be an extremely expensive value prop. It’s capital intensive to build, you need quality control, you need your delivery infrastructure. At the same time Uber Eats started coming up and offering all these discounts in order to take share away from Seamless GrubHub and became a viable alternative even though the food was not delivered as quickly or as good. Sprig, with that approach, was way too capital inefficient. And it&#8217;s not just Sprig that died. Maple died. But are there Sprig-like products that are going to exist in the future? Absolutely, with different startups taking care of different parts of the value chain. For instance, Travis&#8217; CloudKitchens is creating dark kitchens on behalf of other companies. They aspire to become the Amazon Web Services (AWS) of the food space. Other companies are building brands on top of that infrastructure. We’re investors in a company called Mealco, which builds brands on top of dark kitchens. Because they use infrastructure built by third parties, they don’t need to spend hundreds of thousands of dollars per location to be able to launch, nor do you need to build their delivery network. They use Uber Eats, Doordash, Seamless Grubhub and the like. In other words there will be brands created on dark kitchens in the future. It will be way more capital efficient and with better economics than existed or were possible in the Sprig days. Those brands will differentiate and compete on food quality, menu composition, etc. It’s going to accelerate the trend towards online food ordering. The same thing is happening in the &nbsp;catering space. We&#8217;re investors in a Canadian company called Platterz, which is absolutely crushing it. They&#8217;re an asset-light caterer. In food, we&#8217;ve probably made over 50 investments. What I like about Platterz is that they select caterers in every major city and then provide a curated experience to their large corporates clients, like Netflix. They are asset light. Their job is doing the matching, making the menus, figuring out which caterer they are going to use on which day, negotiating volume discounts, making sure that the quality is great. They re really a marketplace. They are really an intermediary. The early players were doing way too much of the work and were way too capital-intensive. It&#8217;s much better if you don&#8217;t actually need to be building any infrastructure and actually do the work yourself. Otherwise, you&#8217;re not really a marketplace. Sprig was not really a marketplace. Erik Torenberg: Totally. And do you prefer asset-light businesses as opposed to ones that are trying to own the entire value chain? Fabrice Grinda: You can own the entire value chain and yet be asset light, meaning you can provide an experience where it appears that you are the provider of the service to the end user, even though you&#8217;re a marketplace. And yes, I much prefer asset-light businesses. Being asset heavy and intensive can be a massive barrier to entry. If you can raise hundreds of millions and other cannot, in a category that&#8217;s capital-intensive, that&#8217;s absolutely amazing. However, the problem is it&#8217;s a big if. You need the right entrepreneur, you need to be at the right point in time in the macroeconomic cycle, which may change for reasons out of your control. So on average, yes, I much prefer asset-light businesses, with the caveat that not everything can be built in an asset-light way. Erik Torenberg: Totally. And so let&#8217;s talk about building marketplace businesses. There&#8217;s the business model. There&#8217;s the chicken and the egg problem. There&#8217;s go to market. What are some core principles of building a marketplace business in 2020 that maybe have stayed the same or maybe are different from 2015 or 2010? Fabrice Grinda: 99% of marketplaces are demand constrained. So you start with the supply. The reason is the suppliers are financially motivated to be on the platform. They want to sell and they want to make money. And so you can go to them and say, &#8220;Hey, I&#8217;m launching this new marketplace. Today, I don&#8217;t really have any volume, but I&#8217;m not going to charge you anything. You will only pay me if I successfully send you a lead or a client that pays you.&#8221; Most people will say yes to that. So make sure that you highly curate your suppliers. You pick the very best suppliers and get going with that. Once you have that, find them a limited number of high-quality demand. Now, if you&#8217;re in a services or labor marketplace, you ideally want to represent, on an annual basis, 25% or more of the income of your marketplace. Do not go overboard if your supply. Because it&#8217;s easy to get supply, many marketplace founders have a tendency to say, &#8220;Okay, let&#8217;s get every single &#8230;&#8221; Let&#8217;s say you&#8217;re building a plumber marketplace. &#8220;Let&#8217;s get every single plumber in New York on the marketplace.&#8221; That&#8217;s a recipe for disaster because you&#8217;re not going to send them enough leads so they&#8217;re not going to be engaged and they&#8217;re going to churn out of your platform and they&#8217;re not going to respond to client inquiries. Instead, in one neighborhood, in one zip code, get the very best plumber. Make sure he&#8217;s engaged. Make sure he has the app. Make sure that every time he has a request, he replies quickly. If you can send him a meaningful percentage of his business, he will be using you and be active. And once you&#8217;ve made that work, then you get another one, and another one, and another one. So you always want to match your supply and your demand very carefully. It&#8217;s very easy to overload your marketplace with too much supply that churns because they&#8217;re not engaged and they&#8217;re not active. And if they&#8217;re not active, your demand side when they come is not going to have a great experience.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; You want the first transactions to be amazing and to set the tone and standard for transactions going forward. Nail it before you scale it. Launch hyper-local in a zip code or neighborhood and take it from there. Some marketplaces are innately national or global, in which case that&#8217;s fine especially since it&#8217;s cheaper to buy traffic and ads at a national level than a local level, but many businesses are local, in which case, really go hyper-local, like a neighborhood. Nail it there and then you go to the next neighborhood and then you go to the city. And then once you&#8217;ve gone to the city, you go to the next city. Likewise it often makes sense to start in a very specific well defined sub-category of your vertical before expanding to adjacent categories. For instance for your plumber marketplace you might want to focus on one specific type of plumbing jobs that you can easily price and measure quality for. Erik Torenberg: Totally. In a business model, do you have any favorite approaches? Fabrice Grinda: Yes. My favorite approach these days is to charge a commission. On average, people take 15% from the supply side, but there is a lot of nuance. The reality is you should be taking the commission on the more inelastic part of the curve. You should test the elasticity of demand and elasticity of supply and then take your rake on the more inelastic curve and so you really need to check for price sensitivity. But on average, it&#8217;s going to be 15% from the supply side, maybe start at 10% and increase to 15% over time. Another favorite trick of ours, especially these days, is to offer a B2B SaaS tool for free to lock in the supply or demand side. You offer for free a tool that others are charging for and build a marketplace on the back of it. For example, we are investors in Fresha. Fresha is a MindBody competitor. MindBody is an OpenTable for hair salons, barbers, spas, etc. They charge the store a booking fee for each customer reservation, similar to the way OpenTable does it if you are getting a table at a restaurant. However, most small business owners hate being charged when their existing customers are making a booking. So what Fresha decided to do is, &#8220;You know what? We&#8217;re going to give you the same product as MindBody, in fact, better and cloud-based, for free. We will not charge you for the customers that you send our way.&#8221; And instead, they said, &#8220;We will charge you when we send you new customers and we&#8217;re going to provide you a POS system that&#8217;s amazing and with lower billing fees than anyone else because we&#8217;ve aggregated the volume of tons of stores.” They&#8217;re now in the hundreds of millions of GMV per month using a non-traditional business model. Giving away a free SaaS tool in order to lock in the supply is amazing. It’s what I described about TCGplayer for their Magic: The Gathering business. They created a POS system for Magic: The Gathering, which they gave away for free to all the comic book stores, which led them to have all the inventory. Slice has been doing the same in the pizza space. Most pizza owners want to cook pizza and not do all the administrative work around running their business. Slice does all the work for them. They pick up the phone, create their website, help with packaging. They become their phone, web and mobile pizza-ordering provider. As a result they have a CAC of zero on the demand side as they are converting existing clients rather than acquiring new ones. So, yes giving away a SaaS tool that is an amazing trick to grow a marketplace. Erik Torenberg: Totally. I want to run through a few different spaces and get your take. These are new marketplaces. So one is home school, two is childcare, three is therapists, and maybe even a non-trained therapists like a listener or a coach. And we&#8217;re talking about monogamous, non-monogamous. All of these have potential for people to find a person and go off platform, but how do you think about these spaces? Fabrice Grinda: We actually looked at a lot of these. We thought for a long time about creating a childcare marketplace. Ultimately, we couldn&#8217;t quite make the economics work. I think, if I recall correctly, you needed a premise where someone could take care of multiple kids for the economics to work. We never got there. On the high end, there were people that would just hire the care directly or had it provided at work by their high end employers. On the low end, you&#8217;re competing with traditional daycare and there was no super effective way to create asset-light daycare or childcare. We&#8217;re like, &#8220;Okay, maybe we do it in people&#8217;s home, but for that we need to get them certified. How do we get them certified? Once they&#8217;re certified, do they need us?&#8221; And so we couldn&#8217;t quite crack the, how do we create a lock-in system and provide enough value after we certify them and find them clients. So we couldn&#8217;t quite make that work. We looked at elderly care as well. We were investors in a few of them. They all died once the California legislation came into place. They worked from a business model perspective as 1099s, but they didn&#8217;t work as W2s and they all went under. We also looked at different therapy marketplaces. For instance in physical therapy, there’s Kulagy out of LA which is doing reasonably well. For psychologists you have TalkSpace, which is absolutely crushing it, as far as I can tell, given that you can get a therapist remotely for cheaper and with more convenience than if you&#8217;re doing it in person. For therapy, the key success factor, if I recall correctly, is actually getting reimbursed by insurance or paid for by the employer. It&#8217;s too expensive at $100 or $200 per hour for many people to afford it out of pocket. You have to demonstrate the value of the therapy either to employers in terms of productivity or absenteeism or to insurance companies in terms of lower medical costs to get it paid for by one of them. Note that we have not invested in any of the players in the category yet. We got close to a few, but we haven&#8217;t pulled the trigger. That said, I could see marketplaces working in the category if they find a way to get paid. For homeschooling, it feels like a monogamous relationship on a go-forward basis to the extent you have one tutor for a child, especially at the early ages. If it&#8217;s multiple tutors, it’s less of an issue. I also don&#8217;t know how big the market is. I suspect continuing education is the first place that&#8217;s going to be disrupted. It ridiculous that you finish college right after 22 or 23, and that&#8217;s it. You never get more education, even though the world is changing so quickly. Having online courses in order to complement your learning makes a lot of sense. Imagine you were doing marketing at a startup in 2000, you were probably doing display ads. Later, you had to do search engine marketing (SEM) on Google. Then you had to do Facebook. Then you had to do Instagram. Then you had to do video ads on YouTube, etc. That world completely changed and is continuing to change and you need to keep updating your skillset. What Teachable, Udemy and Lynda are creating make tons of sense. It&#8217;s easier to disrupt than existing schooling. Homeschooling is kind of a way of saying, &#8220;Okay, I&#8217;m not satisfied with the way the current K through 12 education system works. I&#8217;m going to create an alternative.&#8221; That said it has serious downsides. It’s harder for your kids to socialize. It’s also very expensive so I wonder how big that market ends up being. In order for the marketplace to work in that category, you probably want to provide a lot of value to the parent to make sure that the experiences that they&#8217;re getting from their tutor is on track with traditional schools. Despite the fact that it’s a monogamous relationship, if you can prove to the parent that the tutor is actually teaching in line with what colleges are going to be expecting in the future, then there is ongoing value, especially if you add other forms of tutoring on top. That said the monogamous relationship probably means your take rate has to be limited to something like 10%. You probably have to do payroll processing on behalf of the parent as well in order to increase your value. All things considered, I think it could work there, but I think I would have an issue with TAM. The real long-term solution, as a country, is to fix our K through 12 education. Erik Torenberg: Totally. And I&#8217;m curious what other spaces, you mentioned childcare earlier, that you&#8217;ve maybe considered incubating or got close to, but just couldn&#8217;t quite get there. I&#8217;m curious if you&#8217;ve looked at whether some of them might be in education or healthcare or public services, construction. What are some spaces you got excited about, but couldn&#8217;t quite pull the trigger on? Fabrice Grinda: As investors, we ended up investing a lot in the construction space because the user experience is really broken, both B2B and B2C. For instance we invested in a marketplace for architects to find contractors. We invested in Toolbx for contractors to order products to be delivered the same day. If you are at a construction site and run out of two by fours, Toolbx will go and get it for you. We&#8217;re in a dump truck driver marketplace. If you need to remove all the debris for your construction site Tread will take care of that for you. We are investors in Toolbox which connects skilled construction workers to construction projects. Even though the experience has been broken for a long time, the “why now” is that many of the companies in the industry are family owned and are being taken over by millennials who expect to be able to transact online and are digitizing their businesses as a result. Logistics has a similar profile and we have been very active in the category. We were early in Flexport, and we invested in Freightwalla, which is an Indian digital freight forwarder. We also invested in Leaf Logistics and many others. We have been less active in education, healthcare, and public services. It&#8217;s harder to attack regulated markets because the regulator is very slow and they are not necessarily trying to optimize for either extraordinary outcomes or efficiency. I liked disrupting education at the edges rather than the core because you don&#8217;t need to get approvals from the teachers’ unions or get public school to allocate budget to you. The same applies to healthcare. We invested in Parsley Health. I like One Medical and Forward. More people are wearing Apple Watches and Fitbits, creating tons of data. However, it’s not currently being used by the medical profession. People are using the information themselves. This is especially true in our world of entrepreneurs and VC where everyone is bio-hacking. We&#8217;re all tracking our sleep, calories eaten, trying different diets and trying to improve our health outcomes. I like this approach of doing it bottoms up, disrupting the category at the edges until the point that it has no choice but to affect the core. It doesn&#8217;t make sense that there&#8217;s so much pen and paper still in processes in medical offices. We consideredcreating a medical records encoding company to do it on behalf of doctors&#8217; offices. Every time you go to the doctor&#8217;s it&#8217;s incredibly inefficient. You fill out all the same papers. They have multiple people at the front desk only to deal with all these papers, file insurance claims, send them to Medicaid. It&#8217;s ridiculous how inefficient the process is. Ultimately, we couldn&#8217;t quite get there for a variety of reasons, but I can&#8217;t wait for someone to digitize that. Erik Torenberg: Totally. Do you think it&#8217;s not too late to build a big company in the dating space? How have you reviewed that marketplace opportunity? Fabrice Grinda: I mentioned earlier I didn&#8217;t like job sites because their objective is to lose their clients by finding them great jobs, it&#8217;s the same reason I don&#8217;t love the dating sites because, if they do a good job, they find you a girlfriend or a boyfriend and then they lose you. And if you end up breaking up, they often have to reacquire you. I think the average lifespan of a user on a dating site is six months because they do a pretty good job. Around half of marriages come from people who met on online dating sites. As a result churn is very high. You can build a high revenue business and in the early days, you had interesting viral loops, but I don&#8217;t like the churn component of these business. I suspect the LTV:CAC is not great. You can build a billion-dollar business in the category, but I don’ think you can build a $20 billion business, let alone $100 billion business. I like businesses where the better job the business does, the more their customers use it. For Uber, year one, you use it four times a month. Year two, you use it eight times a month. Year five, you use it 16 times a month, plus you started ordering on Uber Eats. So the revenue per user per month keeps going up, and up, and up. Who knows what the ultimate unit economics are? The problem with dating sites is, &#8220;Oh, I met someone I really liked and I got off the dating site.&#8221; Maybe you get back on it in the future, but the ultimate value they extract from you is pretty limited. It is a marketplace, but I don&#8217;t love it for kind of the same reason I don&#8217;t love the job sites. BTW that’s why I like staffing businesses more than job sites. You keep finding people good jobs and then earning a percentage of their income on a go-forward basis as opposed to losing them forever or for multiple years, at least if you find them a full time job on a traditional job site. Erik Torenberg: In closing, what&#8217;s your request for job startups? Besides RigUp, are there verticals that you are excited about, despite your skepticism? Or what other spaces in B2B, or perhaps more broadly, that you want to invest in or see more entrepreneurs build it? Fabrice Grinda: For jobs, we&#8217;ve done a lot of the vertical staffing marketplaces. We&#8217;re in Trusted Health for nurses. In a way, Meero is a photographer marketplace. Frankly if you are building a marketplace, you should reach out to us. We are the premier global marketplace investors and it really doesn&#8217;t matter the industry, the category, or even the geography, though we do prefer typically larger markets. Especially if you meet one of our theses, whether it&#8217;s a vertical or a marketplace pick model or a B2B marketplace, you should reach out. There is no specific industry or category we are looking at. We are business-model specific. If you are building a marketplace, we want to talk to you. Erik Torenberg: Awesome, that&#8217;s a great place to close. Fabrice, thank you so much for coming on the podcast. This has been a great episode. And for people who do want to talk to you, where should they reach out or where can they learn more about FJ Labs? Fabrice Grinda: We are very open and easy to find. You can find a lot of my thinking on my blog at FabriceGrinda.com. You can see our portfolio at FJLabs.com. It’s probably easiest to reach out to me on Linkedin. Even if you send us a cold email, we will review it if you are building a marketplace. Erik Torenberg: Awesome. Fabrice, thank you so much for coming on the podcast. It&#8217;s been a great podcast. Fabrice Grinda: Thank you for having me.

2020-04-24T15:33:11

2020-04-24T15:33:11

https://fabricegrinda.com/?p=11775

2021-05-28T06:48:48

2021-05-28T06:48:48

covid-19-11-fabrice-grinda-survivre-le-seul-kpi-du-moment

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COVID-19 – 11 Fabrice Grinda – Survivre : le seul KPI du moment

<p><em>Discussion sympa avec Matthieu de Generation Do It Yourself sur COVID, l&#8217;economie, les startups</em></p> <center><iframe loading="lazy" src="https://www.facebook.com/plugins/video.php?href=https%3A%2F%2Fwww.facebook.com%2Fmatthieu.stefani%2Fvideos%2F10156883949406671%2F&amp;show_text=0&amp;width=560" width="5840" height="472" style="border:none;overflow:hidden" scrolling="no" frameborder="0" allowtransparency="true" allowfullscreen="true"></iframe></center> <p>Pour ce 11ème épisode dédié aux entrepreneurs face à la crise du covid-19 (et deuxième réalisé en live sur LinkedIn), je reçois du très lourd.&nbsp;<a href="https://www.gdiy.fr/fabrice-grinda/" target="_blank" rel="noopener">Fabrice Grinda</a>&nbsp;c’est une légende de la tech, le&nbsp;<a href="https://fabricegrinda.com/forbes-just-named-me-the-1-angel-investor-in-the-world/" target="_blank" rel="noreferrer noopener">plus gros business angel du monde</a>&nbsp;selon&nbsp;<a href="https://www.forbes.com/sites/alejandrocremades/2018/08/05/top-50-angel-investors-based-on-investment-volume-and-successful-exits/#4d10c37c7748" target="_blank" rel="noreferrer noopener">Forbes</a>, une tête tout droit sortie de Princeton avec les honneurs ! Un gros bonnet en somme.&nbsp;</p> <p>Fabrice, c’est aussi le mec qui a fondé OLX, le plus grand site web d’hébergement de petites annonces avant de se lancer dans FJ Labs, l’une des boîtes d’investissements les plus actives avec quelques 600 boîtes à son portefeuille dispersées aux quatre coins du globe, dont 500 où il est encore actif.&nbsp;</p> <p>Alors forcément, je me suis dit qu’il devait avoir un bon pouls de ce qui se passe dans cet univers. C’était clairement le cas.&nbsp;</p> <blockquote class="wp-block-quote"><p><strong>“Mon intuition c’est, qu’en septembre, la majorité des startups vont chercher des fonds. Donc, la concurrence sera accrue. Idéalement, il faudrait attendre septembre 2021 avant de chercher à lever de nouveau.”</strong></p></blockquote> <p>Depuis son île des Caraïbes où il est confiné, Fabrice nous livre sa perception de la crise et nous raconte comment les entreprises de son portefeuille ont réagi. Il nous explique aussi comment, en tant qu’investisseur, il continue son activité, en faisant des bridges notamment.&nbsp;</p> <p>Dans cet épisode, Fabrice explique également comment survivre à cette période et vous livre ses conseils pour lever si vous êtes une entreprise ou, au contraire, pour investir. Il nous donne également les conseils exclusifs qu’il donne aux entrepreneurs qu’il côtoie en ce qui concerne la façon de continuer à fonctionner, sur la gratuité ou non des services et sur si c’est le bon moment pour se lancer.&nbsp;</p> <blockquote class="wp-block-quote"><p><strong>“Il faut absolument conserver les unités business et sales. Les grands groupes qui, en temps normal, refusent de parler aux startups viennent maintenant les chercher car elles sont désespérées à l’idée du faire du chiffre d’affaires. C’est le meilleur moment pour signer de nouveaux contrats.”</strong></p></blockquote> <p>L’entrepreneur qui vit à New-York depuis plus de 20 ans raconte également comment la ville qui ne dort jamais s’est organisée et les mesures prises en place par le gouvernement de Trump, notamment pour soutenir l’économie.&nbsp;</p> <p>Enfin, Fabrice et moi, nous répondons aux questions que VOUS nous avez posées pendant le live.&nbsp;</p> <p>Un épisode passionnant, richissime en conseils et apprentissages !&nbsp;</p> <figure class="wp-block-embed is-type-rich is-provider-spotify wp-block-embed-spotify wp-embed-aspect-21-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper"> <iframe loading="lazy" title="Spotify Embed: Génération Do It Yourself" width="100%" height="232" allowtransparency="true" frameborder="0" allow="encrypted-media" src="https://open.spotify.com/embed-podcast/show/6jCObFeQTf0VARXdMv9iE4"></iframe> </div></figure> <p><a rel="noreferrer noopener" href="https://podcasts.apple.com/fr/podcast/g-c3-a9n-c3-a9ration-do-it-yourself/id1209142994?mt=2" target="_blank">Écoutez cet épisode sur Apple Podcasts&nbsp;</a><br><a rel="noreferrer noopener" href="https://www.deezer.com/fr/show/53644" target="_blank">Écoutez cet épisode sur Deezer</a> </p>

<p>Discussion sympa avec Matthieu de Generation Do It Yourself sur COVID, l&#8217;economie, les startups Pour ce 11ème épisode &hellip; <a href="https://fabricegrinda.com/covid-19-11-fabrice-grinda-survivre-le-seul-kpi-du-moment/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;COVID-19 – 11 Fabrice Grinda – Survivre : le seul KPI du moment&#8221;</span></a></p>

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COVID-19 – 11 Fabrice Grinda – Survivre : le seul KPI du moment. Categories - Entrepreneurship, Political Economy. Date-Posted - 2020-04-24T15:33:11 . Discussion sympa avec Matthieu de Generation Do It Yourself sur COVID, l&#8217;economie, les startups Pour ce 11ème épisode dédié aux entrepreneurs face à la crise du covid-19 (et deuxième réalisé en live sur LinkedIn), je reçois du très lourd.&nbsp;Fabrice Grinda&nbsp;c’est une légende de la tech, le&nbsp;plus gros business angel du monde&nbsp;selon&nbsp;Forbes, une tête tout droit sortie de Princeton avec les honneurs ! Un gros bonnet en somme.&nbsp; Fabrice, c’est aussi le mec qui a fondé OLX, le plus grand site web d’hébergement de petites annonces avant de se lancer dans FJ Labs, l’une des boîtes d’investissements les plus actives avec quelques 600 boîtes à son portefeuille dispersées aux quatre coins du globe, dont 500 où il est encore actif.&nbsp; Alors forcément, je me suis dit qu’il devait avoir un bon pouls de ce qui se passe dans cet univers. C’était clairement le cas.&nbsp; “Mon intuition c’est, qu’en septembre, la majorité des startups vont chercher des fonds. Donc, la concurrence sera accrue. Idéalement, il faudrait attendre septembre 2021 avant de chercher à lever de nouveau.” Depuis son île des Caraïbes où il est confiné, Fabrice nous livre sa perception de la crise et nous raconte comment les entreprises de son portefeuille ont réagi. Il nous explique aussi comment, en tant qu’investisseur, il continue son activité, en faisant des bridges notamment.&nbsp; Dans cet épisode, Fabrice explique également comment survivre à cette période et vous livre ses conseils pour lever si vous êtes une entreprise ou, au contraire, pour investir. Il nous donne également les conseils exclusifs qu’il donne aux entrepreneurs qu’il côtoie en ce qui concerne la façon de continuer à fonctionner, sur la gratuité ou non des services et sur si c’est le bon moment pour se lancer.&nbsp; “Il faut absolument conserver les unités business et sales. Les grands groupes qui, en temps normal, refusent de parler aux startups viennent maintenant les chercher car elles sont désespérées à l’idée du faire du chiffre d’affaires. C’est le meilleur moment pour signer de nouveaux contrats.” L’entrepreneur qui vit à New-York depuis plus de 20 ans raconte également comment la ville qui ne dort jamais s’est organisée et les mesures prises en place par le gouvernement de Trump, notamment pour soutenir l’économie.&nbsp; Enfin, Fabrice et moi, nous répondons aux questions que VOUS nous avez posées pendant le live.&nbsp; Un épisode passionnant, richissime en conseils et apprentissages !&nbsp; Écoutez cet épisode sur Apple Podcasts&nbsp;Écoutez cet épisode sur Deezer

2020-04-07T14:29:26

2020-04-07T14:29:26

https://fabricegrinda.com/?p=11737

2021-05-28T06:49:14

2021-05-28T06:49:14

fj-labs-marketplace-matrix

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FJ Labs Marketplace Matrix

<p>In venture there is a reasonably clear set of expectations of where you need to be by when to raise your next round of financing. To help marketplace founders, we put together the following matrix. Like all such charts it’s reductionist in nature and is meant to represent 25-75% percentiles. It does not capture outliers.</p> <div class="wp-block-image is-style-default"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/04/Marketplace_valuations-1.png" alt="" class="wp-image-11767" width="1600" height="599"/></figure></div>

<p>In venture there is a reasonably clear set of expectations of where you need to be by when &hellip; <a href="https://fabricegrinda.com/fj-labs-marketplace-matrix/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;FJ Labs Marketplace Matrix&#8221;</span></a></p>

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FJ Labs Marketplace Matrix. Categories - FJ Labs, Marketplaces. Date-Posted - 2020-04-07T14:29:26 . In venture there is a reasonably clear set of expectations of where you need to be by when to raise your next round of financing. To help marketplace founders, we put together the following matrix. Like all such charts it’s reductionist in nature and is meant to represent 25-75% percentiles. It does not capture outliers.

2020-03-20T14:34:15

2020-03-20T14:34:15

https://fabricegrinda.com/?p=11588

2021-06-15T15:44:51

2021-06-15T15:44:51

the-global-economy-and-its-impact-on-startups-in-the-time-of-covid-19

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The global economy and its impact on startups in the time of COVID-19

<p>In February I suggested that the SARS-CoV-2 virus and the COVID-19 disease it causes may be <a href="https://fabricegrinda.com/covid-19-may-be-the-black-swan-that-pushes-the-global-economy-into-recession/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">the black swan that push the global economy into recession</a>. I suggested that uncertainty would be worse than definite bad news and that the second order impact of the virus on the economy due to individual, investor and corporate risk aversion would dwarf the first order impact. Unfortunately, this post has proven to be prescient and the economy is headed for recession.</p> <p>Every day brings news of quarantines or companies like Volkswagen shutting down production. While some professions can work from home, and the trend towards remote work and flexible work will be accelerated, most are not in this privileged position, and the economic costs in terms of lost wages and production are enormous. On top of that everyone is becoming risk averse: companies are trimming costs and delaying investments. Individuals are delaying making big purchases of cars or houses and are changing their behavior to decrease exposure: not going out, traveling or going to work. Individually this makes sense, but collectively can lead to a huge decrease in corporate and consumer demand which will worsen the economic impact.</p> <p>As investors are also becoming more risk averse, we may very well be headed for a consumer, corporate and sovereign debt crisis. Despite an increasing savings rate in the last decade, US consumer debt is now higher than in 2008.&nbsp;</p> <figure class="wp-block-image size-large is-style-default"><img loading="lazy" decoding="async" width="1266" height="710" src="https://fabricegrinda.com/wp-content/uploads/2020/03/Group-20.jpg" alt="" class="wp-image-11612" srcset="https://fabricegrinda.com/wp-content/uploads/2020/03/Group-20.jpg 1266w, https://fabricegrinda.com/wp-content/uploads/2020/03/Group-20-768x431.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/03/Group-20-1200x673.jpg 1200w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <p>US corporate debt now exceeds the prior peak of the 2008-2009 housing bubble.</p> <figure class="wp-block-image size-large is-style-default"><img loading="lazy" decoding="async" width="1266" height="710" src="https://fabricegrinda.com/wp-content/uploads/2020/03/Group-30.png" alt="" class="wp-image-11614" srcset="https://fabricegrinda.com/wp-content/uploads/2020/03/Group-30.png 1266w, https://fabricegrinda.com/wp-content/uploads/2020/03/Group-30-768x431.png 768w, https://fabricegrinda.com/wp-content/uploads/2020/03/Group-30-1200x673.png 1200w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <p>&nbsp;</p> <div class="wp-block-image is-style-default"><figure class="alignright size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/03/Group1.png" alt="" class="wp-image-11608" width="194" height="181"/></figure></div> <p>Many countries’ fiscal position worsened over the last decade. Countries have been running deficits during a long macro expansion leaving them in a much more precarious position to deal with a recession. Italy, with a debt to GDP ratio above 130%, looks particularly vulnerable. They have been badly hit by COVID-19 and as investors worry spreads with German bonds have been rising. They are also not in a fiscal position where they can afford significant loosening to fight the upcoming recession. The economy is expected to contract by at least 3% this year according to a recent forecast by Oxford Economics. On top of that the country’s banks are poorly capitalized and cannot extend credit to the country’s borrowers. Worse the banks own about a quarter of the country’s $2.4 trillion debt linking the fate of the two in a destabilizing way.</p> <p>Italy is the eighth largest economy in the world and almost ten times larger than Greece which caused the last sovereign debt crisis a decade ago. An Italian sovereign debt crisis would rapidly prove contagious. Greece and Portugal are vulnerable given their high debt to GDP ratios and relatively low growth. Banks in France, Spain, Portugal and Belgium all hold substantial amounts of Italian government debt and would be terribly hit.</p> <p>At this point it’s unclear how long the economy will be on lockdown to prevent the spread of the virus and how deep the recession and financial crisis will be. The financial crisis in particular has the potential to dwarf the impact of the others as consumers, corporates and governments have used historically low rates to fund themselves and may find themselves without access to credit or with much more expensive credit in the near future.</p> <p>That said at this point it’s clear that most governments, central banks, the IMF and the World Bank will throw everything including the kitchen sink at this problem. The Fed, for instance, proactively cut its rate to 0% this Sunday and is currently doing quantitative easing (QE) at over 15 times the rate of previous QEs. The US Treasury is working on a $1 trillion stimulus package. Debt relief is also on the way. New York just suspended mortgage payments. The <a rel="noreferrer noopener" aria-label="SBA (opens in a new tab)" href="https://www.sba.gov/" target="_blank">SBA</a> will provide disaster assistance loans to small businesses affected by COVID-19.&nbsp; This will probably only delay the day of reckoning relative to the massive amounts of debt we accumulated but should allow this recession to be quick if the quarantines and restrictions end in the next few months. This is by no means to say that scenarios like the Great Depression or the Great Recession are not possible, but at this stage it seems like the lower likelihood outcome. Whether it happens seems mostly to be driven by how long it will take for the virus to burn out or scientists to come up with a vaccine that can be deployed widely. If it happens in the next 6 months, the downturn will be more limited, and we should recover quickly. If it takes 18 months, the outcome would be much more severe.</p> <p><strong>History makes me optimistic</strong>. The Spanish flu of 1918 infected 500 million (27% of the world’s population) and killed up to 100 million, or 5.6% of the world’s population of 1.8 billion at the time. Its impact and mortality were much worse than COVID-19. The economy entered a recession in 1918 and started recovering when the virus ran its course in March of 1919. Likewise, the stock market went down 35% from top to bottom in 6 months during the Spanish flu, but it took only 18 months to get back to its previous level. We may do better this time. Given the aggressive quarantine measures and all the efforts on finding a vaccine, it’s possible that the time frame will be compressed with a 3-month peak to trough and quicker recovery.&nbsp;</p> <figure class="wp-block-image size-large is-style-default"><img loading="lazy" decoding="async" width="1266" height="710" src="https://fabricegrinda.com/wp-content/uploads/2020/03/Group40.png" alt="" class="wp-image-11616" srcset="https://fabricegrinda.com/wp-content/uploads/2020/03/Group40.png 1266w, https://fabricegrinda.com/wp-content/uploads/2020/03/Group40-768x431.png 768w, https://fabricegrinda.com/wp-content/uploads/2020/03/Group40-1200x673.png 1200w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <p><strong>Impact on Venture Investing</strong></p> <p>Regardless of the macroeconomic outcome, I remain very optimistic about the startup sector. The Great Recession was the worst recession since the Great Depression and venture investing only decreased 27.7% between 2007 and 2009. I am especially optimistic about early stage investing. The number of angel and seed deals kept growing during the Great Recession from 457 in 2006 to 1,225 in 2009 according to Pitchbook. If an early stage startup is well capitalized for the next two years and is not in a sector disproportionately impacted by COVID-19, there is no reason not to invest. The macroeconomic environment that matters for an early stage startup is the one when it seeks an exit 5 to 10 years from now which is not impacted by the current macro environment. Said startup would benefit from facing less competition and lower customer acquisition costs as everyone is curtailing marketing spending. The same reasoning also holds true at the Series A &amp; B though investors will be more discerning and focus on the startups that have scaled with proven unit economics, raising at reasonable valuations.</p> <div class="wp-block-image is-style-default"><figure class="aligncenter size-full"><img loading="lazy" decoding="async" width="1850" height="456" src="https://fabricegrinda.com/wp-content/uploads/2020/03/Capture-d’écran-2020-03-19-à-20.11.17.png" alt="" class="wp-image-11592" srcset="https://fabricegrinda.com/wp-content/uploads/2020/03/Capture-d’écran-2020-03-19-à-20.11.17.png 1850w, https://fabricegrinda.com/wp-content/uploads/2020/03/Capture-d’écran-2020-03-19-à-20.11.17-768x189.png 768w, https://fabricegrinda.com/wp-content/uploads/2020/03/Capture-d’écran-2020-03-19-à-20.11.17-1536x379.png 1536w, https://fabricegrinda.com/wp-content/uploads/2020/03/Capture-d’écran-2020-03-19-à-20.11.17-1200x296.png 1200w, https://fabricegrinda.com/wp-content/uploads/2020/03/Capture-d’écran-2020-03-19-à-20.11.17-1320x325.png 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure></div> <p>Late stage investing will be much more impacted. Exits will be delayed as buyers curtail M&amp;A activity and the IPO window closes. Airbnb for instance will probably no longer go public in 2020. At the same time fair weather investors which have historically not been in venture investing such as Softbank, Fidelity or family offices, may very well exit the category and will at least severely curtail their investments from the 2018 high.&nbsp;</p> <p><strong>Which startups will be negatively impacted?</strong></p> <p>In the short term most startups will see their revenues shrink, though they should recover when the crisis ends as their fundamental value proposition has not altered. I suspect that almost all our portfolio companies will miss their 2020 plans though the distribution will not be evenly spread. Those catering to the sectors most affected by the pandemic will see bigger drops. Challenging industries include events, transportation, hotels, sports (other than esports), spas, apparel / luxury goods, restaurants and bars, construction, fitness facilities, tourism, and any business that involves physical stores or group interactions.&nbsp;</p> <p>That said, if the startups are well capitalized and take the proper precautions, they should be ok. The ones that will be most negatively impacted fall in two categories:</p> <p>1. <strong>Companies that need to raise capital now:</strong></p> <p>It’s very hard to raise capital when every investor in the world has gone risk off. We’ve already had multiple term sheets pulled near the closing date. In normal circumstances many of these startups could dramatically cut their costs to reach profitability or at least massively extend their runway, but with revenues collapsing as quickly as costs are cut, profitability will be nearly impossible to reach. Many of those startups will die.</p> <p>2. <strong>Companies whose last round were highly overpriced and did not grow into their valuation</strong>:&nbsp;</p> <p>Founders, especially first-time founders, consider the valuation at which they raise a round a badge of honor. However, the valuation that really matters is the final exit valuation, not the interim fund-raising valuations. In the frothy times of the last few years we’ve seen many examples of companies which should raise $10 million at a $40 million post money valuation (25% dilution), raise $10 million at a $100 million post money valuation (10% dilution). Intuitively if you can raise the same amount of money for less dilution it feels like you should do it. The issue is that doing so massively increases the risk that your startup will fail.&nbsp;</p> <p>Raising at too high a valuation relative to traction is one of the most effective killers of startups. You price yourself out of exits and if you don’t grow into the valuation, given the painfulness of down rounds and anti-dilution clauses, most companies fail to raise their next round. This is especially true in the current circumstances where investors are more discerning of product market fit, unit economics and are valuation sensitive.</p> <p><strong>What should startups do?</strong></p> <p>Sequoia has a set of <a rel="noreferrer noopener" aria-label="good recommendations for startups (opens in a new tab)" href="https://medium.com/sequoia-capital/coronavirus-the-black-swan-of-2020-7c72bdeb9753" target="_blank">good recommendations for startups</a>. The irony is that they mirror a lot of the recommendations we at <a href="https://fjlabs.com/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">FJ Labs</a> give to our startups, even in good times. I suppose this makes us more risk averse than most, but we’ve been around long enough to know that not everything always goes according to plan.</p> <p><strong>General recommendations</strong>:&nbsp;</p> <p>1. <strong>Raise a bit more than you need:</strong></p> <p>First time founders tend to be too dilution sensitive. They want to raise just the amount of money that will get them to the next round of funding. In good times where capital is readily available this can work, but the problem is that you may find yourself out of cash when the world is not willing to invest. We recommend our early stage startups to 18 months of runway and to know how to extend it to 24 months should it be necessary.&nbsp;</p> <p>We don’t know how long and how sharp the downturn we are facing is. If you can raise a bit more than what you are looking for because it’s readily available, say $5 million instead of $4 million, take it.</p> <p>2. <strong>Focus on your unit economics:&nbsp;</strong></p> <p>We’ve always been a unit economic driven firm valuing profitable growth over breakneck growth. As a result, we passed on some companies that became huge, but also avoided a much larger number that went to zero. Even pre-launch we expect our founders to articulate their theoretical unit economics based on reasonable expectations such as the industry’s average order value (AOV), recurrence and estimates of customer acquisition costs (CAC) based on some simple tests.&nbsp;</p> <p>In general, we like businesses that recoup their fully loaded CAC in 6 months on a net contribution margin basis. We want them to 3x their CAC in 18 months. Ideally, the business has negative churn. Even though it lost say 50% of its customers after 18 months the remaining ones are buying more than double what they bought before and the ultimate LTV to CAC ratio may be above 10:1. Many of the companies we invest in have not been live for 18 months but can articulate what they think their 18 month unit economics will be given an analysis of their early cohorts in terms of CAC, AOV, churn and recurrence.</p> <p>The only time we are comfortable with negative unit economics is when you can rationally articulate that with scale and density you will get to attractive unit economics.&nbsp;</p> <p>3. <strong>Control your burn:</strong></p> <p>Note that I am defining burn as your monthly cash burn: cash in minus cash out and not just as your monthly costs.&nbsp;</p> <p>In venture there is a reasonably clear set of expectations of where you need to be by when to raise your next round of financing. In the early days of your startup when you don’t have the scale to be profitable, your objective is to be ready for your next round. In other words, the objective of your pre-seed or angel round is to get you to your seed round. The objective of your seed round is to get you to your Series A. The objective of your Series A is to get you to your Series B. At that point you may have enough scale to be profitable and can opt to grow profitably or to raise further rounds to accelerate your growth. Some startups could be profitable earlier, but they would be the exception rather than the rule.&nbsp;</p> <p>The expected time between rounds is 18 months. On average pre-seed or angel rounds are $1 million, seed rounds $3 million, A rounds $7 million and B rounds $15-25 million. The expected monthly Gross Merchandise Volume (GMV) traction for a marketplace startup with a 10-20% take-rate is $0 at pre-seed, $150k / month at seed, $650k / month at the A and $2.5 million / month at the B. These companies on average have a 66% gross margin.&nbsp;&nbsp;</p> <p>Given that the cash is expected to get you to the next round this means you should keep your monthly burn at $50k or so after your pre-seed round, $150k after your seed, $375k after your A and $800k after your B. In other words it’s not unreasonable that if your monthly GMV is $100k / month, you are burning $100k / month, if your monthly GMV is $500k / month you are burning $200k / month, if your monthly GMV is $1M / month you are burning $400k / month if your monthly GMV is $4M / month you are burning $800k / month.</p> <p>Note that these are averages and there are many outliers in both directions. A second time founder will probably command higher prices in the early stages. A company doing exceptionally well and growing faster than the norm may have a Series A that looks more like Series B. In other words, venture fundraising outcomes don’t follow a normal Gaussian distribution curve. The middle is much fatter and there is a wide dispersion of outcomes.</p> <p>Note that the numbers would also be fundamentally different for a marketplace with a 1% take rate. The GMV would have to be much higher to reach similar net revenues. Inversely a SAAS (software as a service) startup with a 90% gross margin would need much lower revenues to have similar net revenues. A marketplace startup with $1 million in GMV, a 15% take rate and a 66% gross margin generates $99k in net revenues. That’s essentially the same as SAAS startup generating $110k / month in revenues with a 90% gross margin. In other words, $100k / month in SAAS revenues is enough traction to raise a Series A while a marketplace startup typically needs upwards of $650k / month in GMV.</p> <p>While this is a rule of thumb, even avoiding outliers, this needs to be taken with a grain of salt. For instance, for a B2B marketplace with signed contracts coming online in the coming year, you can give them credit for some of that growth and justify a Series A even if they are not yet at what would otherwise seem to be sufficient traction..</p> <p>For simplicity I put together this little cheat sheet.</p> <figure class="wp-block-image size-large is-style-default"><img loading="lazy" decoding="async" width="1870" height="370" src="https://fabricegrinda.com/wp-content/uploads/2020/03/Capture-d’écran-2020-03-19-à-20.27.46.png" alt="" class="wp-image-11593" srcset="https://fabricegrinda.com/wp-content/uploads/2020/03/Capture-d’écran-2020-03-19-à-20.27.46.png 1870w, https://fabricegrinda.com/wp-content/uploads/2020/03/Capture-d’écran-2020-03-19-à-20.27.46-768x152.png 768w, https://fabricegrinda.com/wp-content/uploads/2020/03/Capture-d’écran-2020-03-19-à-20.27.46-1536x304.png 1536w, https://fabricegrinda.com/wp-content/uploads/2020/03/Capture-d’écran-2020-03-19-à-20.27.46-1200x237.png 1200w, https://fabricegrinda.com/wp-content/uploads/2020/03/Capture-d’écran-2020-03-19-à-20.27.46-1320x261.png 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <p><strong>Specific recommendations for the current times:</strong></p> <p>1. <strong>Expect your revenues will decline:</strong></p> <p>Many businesses are essentially shut down right now given both supply chain disruptions and worker quarantines. Even if you could serve your customers, they would probably curtail their spending. At the same time if you are sales driven, you should not expect to be able to meet and close new deals for months. Even deals you were convinced were going to close will at least be delayed if not outright cancelled.&nbsp;</p> <p>2. <strong>Delay hiring and investing until it hurts:</strong></p> <p>It’s a good rule of thumb for startups to delay hiring until it hurts and to remain very cash conscious, but even more so in these times. It’s also worth revisiting capital spending plans to make sure they are appropriate considering the current environment.&nbsp;</p> <p>3. <strong>Cut costs:</strong></p> <p>It going to hurt, but it’s a good time to trim all expenses. It’s the perfect time to try to increase productivity and do more with less.&nbsp;</p> <p><strong>Exceptions</strong></p> <p>If you are in an industry that benefits from the crisis such as online education, remote work technologies, or online entertainment, now is a good time to be investing. This is also true in other industries if you have an exceptionally strong balance sheet and lean cost structure. You can take advantages of lower customer acquisition costs while others retrench, or you can acquire weaker competitors.&nbsp;</p> <p>What’s important is to be deliberate about your spending choices rather than just follow whatever plan you originally put together before the crisis occurred.</p> <p><strong>What should venture funds do?</strong></p> <p>Many entrepreneurs don’t understand why venture funds stop investing in down cycles even though the macroeconomic environment that matters is the one that exists when they try to exit 5 to 10 years in the future. The reason is related to the way venture funds get their own capital. Venture funds have partners who make investment decisions, they are called General Partners or GPs. They deploy capital that is given to them by Limited Partners or LPs. These are typically pension funds, university endowments, family offices and the like.</p> <p>The GPs typically charge a 2% annual management fee and 20% carry (20% of the profits) over the 10-year life of the fund. When it’s announced a fund raised a certain amount, say $300 million, they don’t have the cash on hand. Instead they call the capital when they need it from their LPs to cover fees and investments. A typical $300 million fund only has $240 million to invest because 20% of the capital (2% per year for 10 years) is reserved to pay the fees of the GPs that covers their cost structure: salaries, travel, rent, events etc.</p> <p>A typical $300 million fund might deploy $80 million per year over 3 years calling $86 million per year (including fees) in multiple capital calls. Once the fund is fully deployed after the third year, the remaining calls would be to cover $6 million annual management fees. Once successful exits start occurring and the LPs recouped their $300 million, the GPs would also take 20% of the profit. &nbsp;</p> <p>Typical institutional investors try to create balanced portfolios. They may want 10% in private equity and venture capital, 40% in equities, 20% in bonds, 20% in real estate and 10% in cash. The issue is that when public securities holdings crater, the portfolio looks unbalanced from their perspective because private assets are rarely repriced so suddenly, they might find themselves, on paper, with much larger exposure to venture capital than they want. If you do a capital call at that point in time you would only exacerbate their portfolio imbalance. Many LPs request that you don’t call capital in those times as they might not be able to fulfill them, especially if they find themselves short on cash, perhaps because they were trading on margin and are facing capital calls from their banks.</p> <p>I’ve argued in the past that this <a rel="noreferrer noopener" aria-label="traditional portfolio construction is flawed (opens in a new tab)" href="https://fabricegrinda.com/nontraditional-approach-to-wealth-management/" target="_blank">traditional portfolio construction is flawed</a> at the individual level preferring bar bell investing with lots of cash on hand to take advantage of opportunities in downturns and a very diversified portfolio of startups on the other hand. This is also true at the institutional level. VCs should try to be counter cyclical rather than pro-cyclical. Some of the best companies are created in a time of crisis.&nbsp;&nbsp;</p> <p>For instance, the following companies were founded between 2008 and 2009 during the financial crisis: Airbnb, Cloudflare, Github, Pinterest, Slack, Square, Stripe, Uber and Whatsapp. If you stopped investing in that time period, you missed out on the best and most defining companies of the last decade.</p> <p>At FJ Labs, we are still seeing many exciting opportunities. We’ve increased our investment threshold, narrowed our focus to early stage marketplaces which raise enough to withstand the coming storm, but are still committed to investing. Times like these, and our nontraditional approach to venture investing, are the reason we avoided traditional institutional LPs in favor of a limited number of strategic LPs who understand the opportunities created by the circumstances we find ourselves in.</p> <p><strong>Conclusion</strong></p> <p>We don’t currently know the duration and severity of the upcoming downturn and a wide range of outcomes is possible. However, based on the aggressiveness of policymakers’ initial response, it seems like the downturn, while severe, may not be prolonged. A scenario like the one of the Great Recession or Great Depression, while not impossible, seems to be on the lower probability end of the spectrum, especially if COVID-19’s impact on our life ends in the&nbsp;coming 6 months.&nbsp; This is all the truer as policy makers are applying the playbook they devised after the Great Recession with the lessons learned during that crisis.&nbsp;</p> <p>Startups will face difficult times in the coming year and those that need to raise capital now may very well die. For those that adapt and withstand the storm and for those created in these times of crisis, the future is bright. The technology sector will remain the engine of productivity and economic growth and its influence will only be magnified. The pandemic is accelerating the shift towards online ordering, online consumption and the shift to remote and flexible work. There is much room to grow. We are still at the very beginning of the technology revolution. Only 15% of commerce is online. Online penetration remains negligible in the sectors that account for most of GDP: education, health care, and public services, but as these services have started to migrate online during the pandemic, a tidal wave of change is coming.&nbsp;</p> <p>Technology will finally exert its deflationary power while improving user experiences in more areas of the economy. We live in challenging times, but they are also exciting as we are starting to build a better world of tomorrow, a world of equality of opportunity and of plenty!&nbsp;</p>

<p>In February I suggested that the SARS-CoV-2 virus and the COVID-19 disease it causes may be the black &hellip; <a href="https://fabricegrinda.com/the-global-economy-and-its-impact-on-startups-in-the-time-of-covid-19/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;The global economy and its impact on startups in the time of COVID-19&#8221;</span></a></p>

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The global economy and its impact on startups in the time of COVID-19. Categories - Entrepreneurship, Featured Posts, COVID-19, Political Economy. Date-Posted - 2020-03-20T14:34:15 . In February I suggested that the SARS-CoV-2 virus and the COVID-19 disease it causes may be the black swan that push the global economy into recession. I suggested that uncertainty would be worse than definite bad news and that the second order impact of the virus on the economy due to individual, investor and corporate risk aversion would dwarf the first order impact. Unfortunately, this post has proven to be prescient and the economy is headed for recession. Every day brings news of quarantines or companies like Volkswagen shutting down production. While some professions can work from home, and the trend towards remote work and flexible work will be accelerated, most are not in this privileged position, and the economic costs in terms of lost wages and production are enormous. On top of that everyone is becoming risk averse: companies are trimming costs and delaying investments. Individuals are delaying making big purchases of cars or houses and are changing their behavior to decrease exposure: not going out, traveling or going to work. Individually this makes sense, but collectively can lead to a huge decrease in corporate and consumer demand which will worsen the economic impact. As investors are also becoming more risk averse, we may very well be headed for a consumer, corporate and sovereign debt crisis. Despite an increasing savings rate in the last decade, US consumer debt is now higher than in 2008.&nbsp; US corporate debt now exceeds the prior peak of the 2008-2009 housing bubble. &nbsp; Many countries’ fiscal position worsened over the last decade. Countries have been running deficits during a long macro expansion leaving them in a much more precarious position to deal with a recession. Italy, with a debt to GDP ratio above 130%, looks particularly vulnerable. They have been badly hit by COVID-19 and as investors worry spreads with German bonds have been rising. They are also not in a fiscal position where they can afford significant loosening to fight the upcoming recession. The economy is expected to contract by at least 3% this year according to a recent forecast by Oxford Economics. On top of that the country’s banks are poorly capitalized and cannot extend credit to the country’s borrowers. Worse the banks own about a quarter of the country’s $2.4 trillion debt linking the fate of the two in a destabilizing way. Italy is the eighth largest economy in the world and almost ten times larger than Greece which caused the last sovereign debt crisis a decade ago. An Italian sovereign debt crisis would rapidly prove contagious. Greece and Portugal are vulnerable given their high debt to GDP ratios and relatively low growth. Banks in France, Spain, Portugal and Belgium all hold substantial amounts of Italian government debt and would be terribly hit. At this point it’s unclear how long the economy will be on lockdown to prevent the spread of the virus and how deep the recession and financial crisis will be. The financial crisis in particular has the potential to dwarf the impact of the others as consumers, corporates and governments have used historically low rates to fund themselves and may find themselves without access to credit or with much more expensive credit in the near future. That said at this point it’s clear that most governments, central banks, the IMF and the World Bank will throw everything including the kitchen sink at this problem. The Fed, for instance, proactively cut its rate to 0% this Sunday and is currently doing quantitative easing (QE) at over 15 times the rate of previous QEs. The US Treasury is working on a $1 trillion stimulus package. Debt relief is also on the way. New York just suspended mortgage payments. The SBA will provide disaster assistance loans to small businesses affected by COVID-19.&nbsp; This will probably only delay the day of reckoning relative to the massive amounts of debt we accumulated but should allow this recession to be quick if the quarantines and restrictions end in the next few months. This is by no means to say that scenarios like the Great Depression or the Great Recession are not possible, but at this stage it seems like the lower likelihood outcome. Whether it happens seems mostly to be driven by how long it will take for the virus to burn out or scientists to come up with a vaccine that can be deployed widely. If it happens in the next 6 months, the downturn will be more limited, and we should recover quickly. If it takes 18 months, the outcome would be much more severe. History makes me optimistic. The Spanish flu of 1918 infected 500 million (27% of the world’s population) and killed up to 100 million, or 5.6% of the world’s population of 1.8 billion at the time. Its impact and mortality were much worse than COVID-19. The economy entered a recession in 1918 and started recovering when the virus ran its course in March of 1919. Likewise, the stock market went down 35% from top to bottom in 6 months during the Spanish flu, but it took only 18 months to get back to its previous level. We may do better this time. Given the aggressive quarantine measures and all the efforts on finding a vaccine, it’s possible that the time frame will be compressed with a 3-month peak to trough and quicker recovery.&nbsp; Impact on Venture Investing Regardless of the macroeconomic outcome, I remain very optimistic about the startup sector. The Great Recession was the worst recession since the Great Depression and venture investing only decreased 27.7% between 2007 and 2009. I am especially optimistic about early stage investing. The number of angel and seed deals kept growing during the Great Recession from 457 in 2006 to 1,225 in 2009 according to Pitchbook. If an early stage startup is well capitalized for the next two years and is not in a sector disproportionately impacted by COVID-19, there is no reason not to invest. The macroeconomic environment that matters for an early stage startup is the one when it seeks an exit 5 to 10 years from now which is not impacted by the current macro environment. Said startup would benefit from facing less competition and lower customer acquisition costs as everyone is curtailing marketing spending. The same reasoning also holds true at the Series A &amp; B though investors will be more discerning and focus on the startups that have scaled with proven unit economics, raising at reasonable valuations. Late stage investing will be much more impacted. Exits will be delayed as buyers curtail M&amp;A activity and the IPO window closes. Airbnb for instance will probably no longer go public in 2020. At the same time fair weather investors which have historically not been in venture investing such as Softbank, Fidelity or family offices, may very well exit the category and will at least severely curtail their investments from the 2018 high.&nbsp; Which startups will be negatively impacted? In the short term most startups will see their revenues shrink, though they should recover when the crisis ends as their fundamental value proposition has not altered. I suspect that almost all our portfolio companies will miss their 2020 plans though the distribution will not be evenly spread. Those catering to the sectors most affected by the pandemic will see bigger drops. Challenging industries include events, transportation, hotels, sports (other than esports), spas, apparel / luxury goods, restaurants and bars, construction, fitness facilities, tourism, and any business that involves physical stores or group interactions.&nbsp; That said, if the startups are well capitalized and take the proper precautions, they should be ok. The ones that will be most negatively impacted fall in two categories: 1. Companies that need to raise capital now: It’s very hard to raise capital when every investor in the world has gone risk off. We’ve already had multiple term sheets pulled near the closing date. In normal circumstances many of these startups could dramatically cut their costs to reach profitability or at least massively extend their runway, but with revenues collapsing as quickly as costs are cut, profitability will be nearly impossible to reach. Many of those startups will die. 2. Companies whose last round were highly overpriced and did not grow into their valuation:&nbsp; Founders, especially first-time founders, consider the valuation at which they raise a round a badge of honor. However, the valuation that really matters is the final exit valuation, not the interim fund-raising valuations. In the frothy times of the last few years we’ve seen many examples of companies which should raise $10 million at a $40 million post money valuation (25% dilution), raise $10 million at a $100 million post money valuation (10% dilution). Intuitively if you can raise the same amount of money for less dilution it feels like you should do it. The issue is that doing so massively increases the risk that your startup will fail.&nbsp; Raising at too high a valuation relative to traction is one of the most effective killers of startups. You price yourself out of exits and if you don’t grow into the valuation, given the painfulness of down rounds and anti-dilution clauses, most companies fail to raise their next round. This is especially true in the current circumstances where investors are more discerning of product market fit, unit economics and are valuation sensitive. What should startups do? Sequoia has a set of good recommendations for startups. The irony is that they mirror a lot of the recommendations we at FJ Labs give to our startups, even in good times. I suppose this makes us more risk averse than most, but we’ve been around long enough to know that not everything always goes according to plan. General recommendations:&nbsp; 1. Raise a bit more than you need: First time founders tend to be too dilution sensitive. They want to raise just the amount of money that will get them to the next round of funding. In good times where capital is readily available this can work, but the problem is that you may find yourself out of cash when the world is not willing to invest. We recommend our early stage startups to 18 months of runway and to know how to extend it to 24 months should it be necessary.&nbsp; We don’t know how long and how sharp the downturn we are facing is. If you can raise a bit more than what you are looking for because it’s readily available, say $5 million instead of $4 million, take it. 2. Focus on your unit economics:&nbsp; We’ve always been a unit economic driven firm valuing profitable growth over breakneck growth. As a result, we passed on some companies that became huge, but also avoided a much larger number that went to zero. Even pre-launch we expect our founders to articulate their theoretical unit economics based on reasonable expectations such as the industry’s average order value (AOV), recurrence and estimates of customer acquisition costs (CAC) based on some simple tests.&nbsp; In general, we like businesses that recoup their fully loaded CAC in 6 months on a net contribution margin basis. We want them to 3x their CAC in 18 months. Ideally, the business has negative churn. Even though it lost say 50% of its customers after 18 months the remaining ones are buying more than double what they bought before and the ultimate LTV to CAC ratio may be above 10:1. Many of the companies we invest in have not been live for 18 months but can articulate what they think their 18 month unit economics will be given an analysis of their early cohorts in terms of CAC, AOV, churn and recurrence. The only time we are comfortable with negative unit economics is when you can rationally articulate that with scale and density you will get to attractive unit economics.&nbsp; 3. Control your burn: Note that I am defining burn as your monthly cash burn: cash in minus cash out and not just as your monthly costs.&nbsp; In venture there is a reasonably clear set of expectations of where you need to be by when to raise your next round of financing. In the early days of your startup when you don’t have the scale to be profitable, your objective is to be ready for your next round. In other words, the objective of your pre-seed or angel round is to get you to your seed round. The objective of your seed round is to get you to your Series A. The objective of your Series A is to get you to your Series B. At that point you may have enough scale to be profitable and can opt to grow profitably or to raise further rounds to accelerate your growth. Some startups could be profitable earlier, but they would be the exception rather than the rule.&nbsp; The expected time between rounds is 18 months. On average pre-seed or angel rounds are $1 million, seed rounds $3 million, A rounds $7 million and B rounds $15-25 million. The expected monthly Gross Merchandise Volume (GMV) traction for a marketplace startup with a 10-20% take-rate is $0 at pre-seed, $150k / month at seed, $650k / month at the A and $2.5 million / month at the B. These companies on average have a 66% gross margin.&nbsp;&nbsp; Given that the cash is expected to get you to the next round this means you should keep your monthly burn at $50k or so after your pre-seed round, $150k after your seed, $375k after your A and $800k after your B. In other words it’s not unreasonable that if your monthly GMV is $100k / month, you are burning $100k / month, if your monthly GMV is $500k / month you are burning $200k / month, if your monthly GMV is $1M / month you are burning $400k / month if your monthly GMV is $4M / month you are burning $800k / month. Note that these are averages and there are many outliers in both directions. A second time founder will probably command higher prices in the early stages. A company doing exceptionally well and growing faster than the norm may have a Series A that looks more like Series B. In other words, venture fundraising outcomes don’t follow a normal Gaussian distribution curve. The middle is much fatter and there is a wide dispersion of outcomes. Note that the numbers would also be fundamentally different for a marketplace with a 1% take rate. The GMV would have to be much higher to reach similar net revenues. Inversely a SAAS (software as a service) startup with a 90% gross margin would need much lower revenues to have similar net revenues. A marketplace startup with $1 million in GMV, a 15% take rate and a 66% gross margin generates $99k in net revenues. That’s essentially the same as SAAS startup generating $110k / month in revenues with a 90% gross margin. In other words, $100k / month in SAAS revenues is enough traction to raise a Series A while a marketplace startup typically needs upwards of $650k / month in GMV. While this is a rule of thumb, even avoiding outliers, this needs to be taken with a grain of salt. For instance, for a B2B marketplace with signed contracts coming online in the coming year, you can give them credit for some of that growth and justify a Series A even if they are not yet at what would otherwise seem to be sufficient traction.. For simplicity I put together this little cheat sheet. Specific recommendations for the current times: 1. Expect your revenues will decline: Many businesses are essentially shut down right now given both supply chain disruptions and worker quarantines. Even if you could serve your customers, they would probably curtail their spending. At the same time if you are sales driven, you should not expect to be able to meet and close new deals for months. Even deals you were convinced were going to close will at least be delayed if not outright cancelled.&nbsp; 2. Delay hiring and investing until it hurts: It’s a good rule of thumb for startups to delay hiring until it hurts and to remain very cash conscious, but even more so in these times. It’s also worth revisiting capital spending plans to make sure they are appropriate considering the current environment.&nbsp; 3. Cut costs: It going to hurt, but it’s a good time to trim all expenses. It’s the perfect time to try to increase productivity and do more with less.&nbsp; Exceptions If you are in an industry that benefits from the crisis such as online education, remote work technologies, or online entertainment, now is a good time to be investing. This is also true in other industries if you have an exceptionally strong balance sheet and lean cost structure. You can take advantages of lower customer acquisition costs while others retrench, or you can acquire weaker competitors.&nbsp; What’s important is to be deliberate about your spending choices rather than just follow whatever plan you originally put together before the crisis occurred. What should venture funds do? Many entrepreneurs don’t understand why venture funds stop investing in down cycles even though the macroeconomic environment that matters is the one that exists when they try to exit 5 to 10 years in the future. The reason is related to the way venture funds get their own capital. Venture funds have partners who make investment decisions, they are called General Partners or GPs. They deploy capital that is given to them by Limited Partners or LPs. These are typically pension funds, university endowments, family offices and the like. The GPs typically charge a 2% annual management fee and 20% carry (20% of the profits) over the 10-year life of the fund. When it’s announced a fund raised a certain amount, say $300 million, they don’t have the cash on hand. Instead they call the capital when they need it from their LPs to cover fees and investments. A typical $300 million fund only has $240 million to invest because 20% of the capital (2% per year for 10 years) is reserved to pay the fees of the GPs that covers their cost structure: salaries, travel, rent, events etc. A typical $300 million fund might deploy $80 million per year over 3 years calling $86 million per year (including fees) in multiple capital calls. Once the fund is fully deployed after the third year, the remaining calls would be to cover $6 million annual management fees. Once successful exits start occurring and the LPs recouped their $300 million, the GPs would also take 20% of the profit. &nbsp; Typical institutional investors try to create balanced portfolios. They may want 10% in private equity and venture capital, 40% in equities, 20% in bonds, 20% in real estate and 10% in cash. The issue is that when public securities holdings crater, the portfolio looks unbalanced from their perspective because private assets are rarely repriced so suddenly, they might find themselves, on paper, with much larger exposure to venture capital than they want. If you do a capital call at that point in time you would only exacerbate their portfolio imbalance. Many LPs request that you don’t call capital in those times as they might not be able to fulfill them, especially if they find themselves short on cash, perhaps because they were trading on margin and are facing capital calls from their banks. I’ve argued in the past that this traditional portfolio construction is flawed at the individual level preferring bar bell investing with lots of cash on hand to take advantage of opportunities in downturns and a very diversified portfolio of startups on the other hand. This is also true at the institutional level. VCs should try to be counter cyclical rather than pro-cyclical. Some of the best companies are created in a time of crisis.&nbsp;&nbsp; For instance, the following companies were founded between 2008 and 2009 during the financial crisis: Airbnb, Cloudflare, Github, Pinterest, Slack, Square, Stripe, Uber and Whatsapp. If you stopped investing in that time period, you missed out on the best and most defining companies of the last decade. At FJ Labs, we are still seeing many exciting opportunities. We’ve increased our investment threshold, narrowed our focus to early stage marketplaces which raise enough to withstand the coming storm, but are still committed to investing. Times like these, and our nontraditional approach to venture investing, are the reason we avoided traditional institutional LPs in favor of a limited number of strategic LPs who understand the opportunities created by the circumstances we find ourselves in. Conclusion We don’t currently know the duration and severity of the upcoming downturn and a wide range of outcomes is possible. However, based on the aggressiveness of policymakers’ initial response, it seems like the downturn, while severe, may not be prolonged. A scenario like the one of the Great Recession or Great Depression, while not impossible, seems to be on the lower probability end of the spectrum, especially if COVID-19’s impact on our life ends in the&nbsp;coming 6 months.&nbsp; This is all the truer as policy makers are applying the playbook they devised after the Great Recession with the lessons learned during that crisis.&nbsp; Startups will face difficult times in the coming year and those that need to raise capital now may very well die. For those that adapt and withstand the storm and for those created in these times of crisis, the future is bright. The technology sector will remain the engine of productivity and economic growth and its influence will only be magnified. The pandemic is accelerating the shift towards online ordering, online consumption and the shift to remote and flexible work. There is much room to grow. We are still at the very beginning of the technology revolution. Only 15% of commerce is online. Online penetration remains negligible in the sectors that account for most of GDP: education, health care, and public services, but as these services have started to migrate online during the pandemic, a tidal wave of change is coming.&nbsp; Technology will finally exert its deflationary power while improving user experiences in more areas of the economy. We live in challenging times, but they are also exciting as we are starting to build a better world of tomorrow, a world of equality of opportunity and of plenty!&nbsp;

2020-03-12T16:12:43

2020-03-12T16:12:43

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2021-05-28T06:50:11

2021-05-28T06:50:11

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https://fabricegrinda.com/the-entrepreneur-insight/

The Entrepreneur Insight

<p>I had the pleasure of chatting with Thomas Reck on The Entrepreneur Insight.&nbsp; We had a varied conversation and convered everything from the value of building the right relationships to the importance of leveraging technology and the internet to maximize productivity. </p> <p></p> <figure class="wp-block-embed is-type-rich is-provider-spotify wp-block-embed-spotify wp-embed-aspect-21-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper"> <iframe loading="lazy" title="Spotify Embed: #25 Fabrice Grinda - Co-Founder of the venture capital firm FJ Labs with a portfolio of 481 Startups" width="100%" height="232" allowtransparency="true" frameborder="0" allow="encrypted-media" src="https://open.spotify.com/embed-podcast/episode/0fHr8qJc3X9nrs8xG289Lo"></iframe> </div></figure> <p>Listen the podcast on <a rel="noreferrer noopener" aria-label="itunes (opens in a new tab)" href="https://podcasts.apple.com/de/podcast/25-fabrice-grinda-co-founder-venture-capital-firm-fj/id1485141775?i=1000466874748" target="_blank">iTunes</a><br>Listen the podcast in <a href="https://anchor.fm/entrepreneur-insight/episodes/25-Fabrice-Grinda---Co-Founder-of-the-venture-capital-firm-FJ-Labs-with-a-portfolio-of-481-Startups-eb3v0m" target="_blank" rel="noreferrer noopener" aria-label="Anchor (opens in a new tab)">Anchor</a></p>

<p>I had the pleasure of chatting with Thomas Reck on The Entrepreneur Insight.&nbsp; We had a varied conversation &hellip; <a href="https://fabricegrinda.com/the-entrepreneur-insight/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;The Entrepreneur Insight&#8221;</span></a></p>

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The Entrepreneur Insight. Categories - Entrepreneurship. Date-Posted - 2020-03-12T16:12:43 . I had the pleasure of chatting with Thomas Reck on The Entrepreneur Insight.&nbsp; We had a varied conversation and convered everything from the value of building the right relationships to the importance of leveraging technology and the internet to maximize productivity. Listen the podcast on iTunesListen the podcast in Anchor

2020-02-24T15:57:33

2020-02-24T15:57:33

https://fabricegrinda.com/?p=11376

2021-05-28T06:50:56

2021-05-28T06:50:56

covid-19-may-be-the-black-swan-that-pushes-the-global-economy-into-recession

publish

post

https://fabricegrinda.com/covid-19-may-be-the-black-swan-that-pushes-the-global-economy-into-recession/

COVID-19 may be the black swan that pushes the global economy into recession

<p>If there is one thing that businesses and individuals hate even more than bad news, it’s uncertainty. Even if you scour the literature and CDC releases (such as this <a rel="noreferrer noopener" aria-label="latest one from February 21 (opens in a new tab)" href="https://www.cdc.gov/media/releases/2020/t0221-cdc-telebriefing-covid-19.html" target="_blank">latest one from February 21</a> ) little is known about how contagious COVID-19 actually is, its ultimate level of mortality (viruses have a tendency to become less lethal over time), and its final impact on the global economy. As a result, it makes sense for companies to be more risk averse: to delay hiring more staff and making new investments. Likewise, individuals logically delay making big purchases of cars or houses and change their behavior to decrease exposure: they don’t travel, go to restaurants, stores or movies. If things get severe, they stop going to their jobs. If schools are closed, healthy workers may have to stay home with their children. Individually this makes sense, but collectively can lead to a huge decrease in corporate and consumer demand which can easily tip the economy into recession.</p> <p>In other words, the second order impacts of a pandemic due to risk aversion dwarf the first order impacts (which are more easily measurable) such as the costs of treating infected people or the lost wages of people not working because they are sick or avoiding infection. For instance, a 2009 study by economists at the Brookings Institution analyzed the direct economic impact of closing schools during a flu pandemic. Since about one-quarter of civilian workers in the United States have a child under 16 and no stay-at-home adult, closing all the nation’s K-12 schools for two weeks would result in between $5.2 billion and $23.6 billion in lost economic activity; a four-week closing would cost up to $47.1 billion dollars — 0.3 percent of GDP. </p> <p>This purely counted lost wages, but people whose income falls because they don’t work, cut their spending, and the people who don’t receive that spending in turn curtail their expenses creating a negative snowball. Worse, while the decrease in demand is deflationary in nature, the disruption to supply chains could lead to shortages and hence increased prices and inflation in the short run further pinching consumers’ wallets. </p> <p>Right now, airlines are rapidly cutting capacity, tourism is taking a beating, and places like Macau look like a ghost town. All this while we are still in the first phase of the epidemic. It’s unclear where it will go from there – whether it will be contained like SARS which killed just 916 people, lasted a year and reduced global GDP by only $33 billion or will look more like the Spanish flu of 1918. </p> <p>The 1918 influenza epidemic infected 500 million people around the world or around 27% of the world’s population at the time and killed between 40 and 100 million people. It infected people everywhere including on remote Pacific islands and in the Arctic. Because it caused unusually high mortality rates in individuals aged 18 to 40, it had a particularly strong impact on the workforce and pushed the economy into recession. While the data from the time period is sparse, according to the NBER business cycle chronology, there was a cyclical peak in the US in August 1918 and a trough in March 1919. These dates are almost exactly coincident with the epidemic that began in August 1918 and had nearly run its course by March 1919. </p> <p>There are two possible scenarios at this point. The first is that COVID-19, while significantly worse than SARS, is contained and does not lead to more than a few million deaths globally (vs. up to 646,000 flu annual death). It’s the most likely scenario – not because I have any confidential data on infectiousness and mortality – but because most epidemics are not as dire as the 1918 influenza if only because we now have vaccines, anti-virals and antibiotics that can treat secondary bacterial infections. </p> <p>The Asian flu of 1957-1958, the Hong Kong flu of 1968-1970 and the Swine flu of 2009-2010 killed less than 2 million people each even though the latter infected up to 21% of the world’s population at the time (up to 1.4 billion people). In this case, many countries may experience recessions: two consecutive quarters of negative growth, but would quickly recover as the pandemic burnt out. Companies would replenish their inventories and consumers would eventually make the purchases they had merely delayed in the face of uncertainty and increase their spending again as their income recovered when they returned to work. The <a rel="noreferrer noopener" aria-label="Asian flu and Swine flu are estimated to have cost around 1% of GDP in affected countries (opens in a new tab)" href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5198166/" target="_blank">Asian flu and Swine flu are estimated to have cost around 1% of GDP in affected countries</a>, but the economies of those countries quickly recovered. </p> <p>A more severe scenario is possible given how contagious COVID-19 seems to be. If it infected as many people as the Spanish influenza with what seems to be its current 2% mortality rate, over 2 billion people worldwide would be infected and 40 million would die. This would lead to a massive global recession. Researchers at the <a rel="noreferrer noopener" aria-label="Federal Reserve Bank of St. Louis and the World Bank calculated that a pandemic as severe as the 1918 influenza could contract GDP from 4.25 to 5.5% in 1 year costing more than $3 trillion (opens in a new tab)" href="https://files.stlouisfed.org/files/htdocs/pageone-economics/uploads/newsletter/2008/200802.pdf" target="_blank">Federal Reserve Bank of St. Louis and the World Bank calculated that a pandemic as severe as the 1918 influenza could contract GDP from 4.25 to 5.5% in 1 year costing more than $3 trillion</a> and take years to recover from, especially if people of working age were disproportionately affected as anecdotal evidence suggests may be the case.</p> <p>I am obviously praying for the first scenario to be true, which if mild enough might just allow the global economy to avoid a recession. That said some countries like Japan seem to be destined for one. The Japanese economy already shrank at a 6.3% annual rate in the final quarter of 2019 due to a consumption tax increase. This will only be compounded in the first quarter by the impact of Typhoon Hagibis and COVID-19.</p> <p>What seems certain is that most companies on a go forward basis will rethink their supply chains to create more redundancy. Let’s also hope that China bans live wildlife markets once and for all given that they are the likely source of both SARS and COVID-19 and are an ongoing source of risk.</p>

<p>If there is one thing that businesses and individuals hate even more than bad news, it’s uncertainty. Even &hellip; <a href="https://fabricegrinda.com/covid-19-may-be-the-black-swan-that-pushes-the-global-economy-into-recession/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;COVID-19 may be the black swan that pushes the global economy into recession&#8221;</span></a></p>

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COVID-19 may be the black swan that pushes the global economy into recession. Categories - Featured Posts, COVID-19, Political Economy. Date-Posted - 2020-02-24T15:57:33 . If there is one thing that businesses and individuals hate even more than bad news, it’s uncertainty. Even if you scour the literature and CDC releases (such as this latest one from February 21 ) little is known about how contagious COVID-19 actually is, its ultimate level of mortality (viruses have a tendency to become less lethal over time), and its final impact on the global economy. As a result, it makes sense for companies to be more risk averse: to delay hiring more staff and making new investments. Likewise, individuals logically delay making big purchases of cars or houses and change their behavior to decrease exposure: they don’t travel, go to restaurants, stores or movies. If things get severe, they stop going to their jobs. If schools are closed, healthy workers may have to stay home with their children. Individually this makes sense, but collectively can lead to a huge decrease in corporate and consumer demand which can easily tip the economy into recession. In other words, the second order impacts of a pandemic due to risk aversion dwarf the first order impacts (which are more easily measurable) such as the costs of treating infected people or the lost wages of people not working because they are sick or avoiding infection. For instance, a 2009 study by economists at the Brookings Institution analyzed the direct economic impact of closing schools during a flu pandemic. Since about one-quarter of civilian workers in the United States have a child under 16 and no stay-at-home adult, closing all the nation’s K-12 schools for two weeks would result in between $5.2 billion and $23.6 billion in lost economic activity; a four-week closing would cost up to $47.1 billion dollars — 0.3 percent of GDP. This purely counted lost wages, but people whose income falls because they don’t work, cut their spending, and the people who don’t receive that spending in turn curtail their expenses creating a negative snowball. Worse, while the decrease in demand is deflationary in nature, the disruption to supply chains could lead to shortages and hence increased prices and inflation in the short run further pinching consumers’ wallets. Right now, airlines are rapidly cutting capacity, tourism is taking a beating, and places like Macau look like a ghost town. All this while we are still in the first phase of the epidemic. It’s unclear where it will go from there – whether it will be contained like SARS which killed just 916 people, lasted a year and reduced global GDP by only $33 billion or will look more like the Spanish flu of 1918. The 1918 influenza epidemic infected 500 million people around the world or around 27% of the world’s population at the time and killed between 40 and 100 million people. It infected people everywhere including on remote Pacific islands and in the Arctic. Because it caused unusually high mortality rates in individuals aged 18 to 40, it had a particularly strong impact on the workforce and pushed the economy into recession. While the data from the time period is sparse, according to the NBER business cycle chronology, there was a cyclical peak in the US in August 1918 and a trough in March 1919. These dates are almost exactly coincident with the epidemic that began in August 1918 and had nearly run its course by March 1919. There are two possible scenarios at this point. The first is that COVID-19, while significantly worse than SARS, is contained and does not lead to more than a few million deaths globally (vs. up to 646,000 flu annual death). It’s the most likely scenario – not because I have any confidential data on infectiousness and mortality – but because most epidemics are not as dire as the 1918 influenza if only because we now have vaccines, anti-virals and antibiotics that can treat secondary bacterial infections. The Asian flu of 1957-1958, the Hong Kong flu of 1968-1970 and the Swine flu of 2009-2010 killed less than 2 million people each even though the latter infected up to 21% of the world’s population at the time (up to 1.4 billion people). In this case, many countries may experience recessions: two consecutive quarters of negative growth, but would quickly recover as the pandemic burnt out. Companies would replenish their inventories and consumers would eventually make the purchases they had merely delayed in the face of uncertainty and increase their spending again as their income recovered when they returned to work. The Asian flu and Swine flu are estimated to have cost around 1% of GDP in affected countries, but the economies of those countries quickly recovered. A more severe scenario is possible given how contagious COVID-19 seems to be. If it infected as many people as the Spanish influenza with what seems to be its current 2% mortality rate, over 2 billion people worldwide would be infected and 40 million would die. This would lead to a massive global recession. Researchers at the Federal Reserve Bank of St. Louis and the World Bank calculated that a pandemic as severe as the 1918 influenza could contract GDP from 4.25 to 5.5% in 1 year costing more than $3 trillion and take years to recover from, especially if people of working age were disproportionately affected as anecdotal evidence suggests may be the case. I am obviously praying for the first scenario to be true, which if mild enough might just allow the global economy to avoid a recession. That said some countries like Japan seem to be destined for one. The Japanese economy already shrank at a 6.3% annual rate in the final quarter of 2019 due to a consumption tax increase. This will only be compounded in the first quarter by the impact of Typhoon Hagibis and COVID-19. What seems certain is that most companies on a go forward basis will rethink their supply chains to create more redundancy. Let’s also hope that China bans live wildlife markets once and for all given that they are the likely source of both SARS and COVID-19 and are an ongoing source of risk.

2020-02-18T14:13:09

2020-02-18T14:13:09

https://fabricegrinda.com/?p=11236

2021-05-28T06:51:30

2021-05-28T06:51:30

the-best-gadgets-to-film-your-ski-exploits

publish

post

https://fabricegrinda.com/the-best-gadgets-to-film-your-ski-exploits/

The Best Gadgets to Film your Ski Exploits

<p>As many of you know I am addicted to skiing fresh powder. Every winter I head to the Revelstoke area British Columbia which has the best backcountry tree skiing in the world.</p> <p>We would occasionally stop and film each other with compact superzoom camera, but in general we did not like the time it would take to setup or freezing our hands to control the camera. At the same time, we lusted for the type of footage we would see in Warren Miller movies or in the films featured at the Banff Film Festival. However, those were usually taken by professional camera crews in helicopters flying over the terrain making it both impractical and unaffordable. Enter the <a rel="noreferrer noopener" aria-label="Skydio 2 (opens in a new tab)" href="http://www.skydio.com" target="_blank">Skydio 2</a>. </p> <figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="2320" height="772" src="https://fabricegrinda.com/wp-content/uploads/2020/02/R3-render-hero.png" alt="" class="wp-image-11237" srcset="https://fabricegrinda.com/wp-content/uploads/2020/02/R3-render-hero.png 2320w, https://fabricegrinda.com/wp-content/uploads/2020/02/R3-render-hero-768x256.png 768w, https://fabricegrinda.com/wp-content/uploads/2020/02/R3-render-hero-1536x511.png 1536w, https://fabricegrinda.com/wp-content/uploads/2020/02/R3-render-hero-2048x681.png 2048w, https://fabricegrinda.com/wp-content/uploads/2020/02/R3-render-hero-1200x399.png 1200w, https://fabricegrinda.com/wp-content/uploads/2020/02/R3-render-hero-1320x439.png 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <p>It’s by far the best self-flying drone in the market. It’s significantly improved on the R1 and is the best at navigating trees. It’s still not perfect as it can take a while to navigate tight trees and if you are going too quickly it will lose you, but it has the best auto-tracking features by far putting the DJI Mavic 2 Pro to shame. I captured this epic video with it. </p> <figure class="wp-block-embed aligncenter is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper"> <iframe loading="lazy" title="Heli skiing with the Skydio 2" width="840" height="473" src="https://www.youtube.com/embed/Mxs8gCfOUGE?feature=oembed" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe> </div></figure> <p>Note that getting the Beacon is an absolute must as it will allow the Skydio to track you even if it cannot see you while you are in the trees. I would also recommend having a tail guide who can grab the drone should it get stuck. You should have radios so the tail guide can tell you if the drone gets stuck in which case you can use the Beacon to tell the Skydio to land. If you don’t have the Beacon you will most likely be out of range and your phone won’t be able to control the drone and you will just have to wait for the battery to run out. I would also strongly recommend having at least one extra battery.</p> <p>If you are skiing in trees, it’s best to tell the drone to follow you. If the terrain is more open a more side view looks more impressive. </p> <p class="has-text-align-left">I also love complementing the drone footage with footage from the <a rel="noreferrer noopener" aria-label="GoPro Hero 8 Black (opens in a new tab)" href="https://gopro.com/en/us/shop/cameras/hero8-black/CHDHX-801-master.html?gclid=Cj0KCQiAyp7yBRCwARIsABfQsnRh0ETphkKRKyCS3tRzElBZteNK4m1k8jBrZrqnWgKlZotDiyWY_ooaAnhfEALw_wcB&amp;ds_rl=1274407&amp;gclsrc=aw.ds#hero8black" target="_blank">GoPro Hero 8 Black</a> .<gwmw class="ginger-module-highlighter-mistake-type-3" id="gwmw-15819426429594555333530"> </gwmw>I tried many positions. Ultimately, I like it best helmet mounted in Superview Mode capturing at 2.7K in 60 fps<gwmw class="ginger-module-highlighter-mistake-type-3" id="gwmw-15819426386873412815973">. Superview</gwmw> <gwmw class="ginger-module-highlighter-mistake-type-1" id="gwmw-15819426402945161835017">shoots</gwmw> in 4:3 so you see more of the height capturing both your skis and the terrain without angling the camera down too much. It gives you a better sensation of speed and steepness than in the regular mode. It’s also best to be in 60 fps. Because the GoPro does not yet support Superview in 4K with 60 fps, it&#8217;s worth decreasing the resolution to 2.7K which still looks epic as you can see in the following video.</p> <figure class="wp-block-embed aligncenter is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper"> <iframe loading="lazy" title="Heliskiing with the GoPro Hero8 Black" width="840" height="473" src="https://www.youtube.com/embed/4fFfvy5q6Vo?feature=oembed" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe> </div></figure> <p>I would avoid chest mounting the GoPro as it seems to move more and tends to give me motion sickness while looking at the video. The batteries tend to freeze so it’s best to keep them in your gloves on the way up and to only put them in when recording. Extra batteries are also highly recommended. To avoid freezing your hands enable voice commands and just start recording by saying: “GoPro Start Recording”. The GoPro will beep. When you are done, just say “GoPro Stop Recording” and it will beep again to indicate it complied. </p> <p>To edit the videos, I download the originals to my iPhone and edit them in iMovie. I also occasionally use Quik. </p>

<p>As many of you know I am addicted to skiing fresh powder. Every winter I head to the &hellip; <a href="https://fabricegrinda.com/the-best-gadgets-to-film-your-ski-exploits/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;The Best Gadgets to Film your Ski Exploits&#8221;</span></a></p>

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The Best Gadgets to Film your Ski Exploits. Categories - Tech Gadgets, Travels. Date-Posted - 2020-02-18T14:13:09 . As many of you know I am addicted to skiing fresh powder. Every winter I head to the Revelstoke area British Columbia which has the best backcountry tree skiing in the world. We would occasionally stop and film each other with compact superzoom camera, but in general we did not like the time it would take to setup or freezing our hands to control the camera. At the same time, we lusted for the type of footage we would see in Warren Miller movies or in the films featured at the Banff Film Festival. However, those were usually taken by professional camera crews in helicopters flying over the terrain making it both impractical and unaffordable. Enter the Skydio 2. It’s by far the best self-flying drone in the market. It’s significantly improved on the R1 and is the best at navigating trees. It’s still not perfect as it can take a while to navigate tight trees and if you are going too quickly it will lose you, but it has the best auto-tracking features by far putting the DJI Mavic 2 Pro to shame. I captured this epic video with it. Note that getting the Beacon is an absolute must as it will allow the Skydio to track you even if it cannot see you while you are in the trees. I would also recommend having a tail guide who can grab the drone should it get stuck. You should have radios so the tail guide can tell you if the drone gets stuck in which case you can use the Beacon to tell the Skydio to land. If you don’t have the Beacon you will most likely be out of range and your phone won’t be able to control the drone and you will just have to wait for the battery to run out. I would also strongly recommend having at least one extra battery. If you are skiing in trees, it’s best to tell the drone to follow you. If the terrain is more open a more side view looks more impressive. I also love complementing the drone footage with footage from the GoPro Hero 8 Black . I tried many positions. Ultimately, I like it best helmet mounted in Superview Mode capturing at 2.7K in 60 fps. Superview shoots in 4:3 so you see more of the height capturing both your skis and the terrain without angling the camera down too much. It gives you a better sensation of speed and steepness than in the regular mode. It’s also best to be in 60 fps. Because the GoPro does not yet support Superview in 4K with 60 fps, it&#8217;s worth decreasing the resolution to 2.7K which still looks epic as you can see in the following video. I would avoid chest mounting the GoPro as it seems to move more and tends to give me motion sickness while looking at the video. The batteries tend to freeze so it’s best to keep them in your gloves on the way up and to only put them in when recording. Extra batteries are also highly recommended. To avoid freezing your hands enable voice commands and just start recording by saying: “GoPro Start Recording”. The GoPro will beep. When you are done, just say “GoPro Stop Recording” and it will beep again to indicate it complied. To edit the videos, I download the originals to my iPhone and edit them in iMovie. I also occasionally use Quik.

2020-02-11T16:00:25

2020-02-11T16:00:25

https://fabricegrinda.com/?p=11107

2021-05-28T06:52:04

2021-05-28T06:52:04

all-things-marketplaces

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https://fabricegrinda.com/all-things-marketplaces/

All Things Marketplaces

<p></p> <a class="spreaker-player" href="https://www.spreaker.com/user/10197011/all-things-marketplaces-with-fabrice-gri" data-resource="episode_id=22424351" data-theme="light" data-autoplay="false" data-playlist="false" data-width="100%" data-height="200px" target="_blank" rel="noopener">Listen to &#8220;All Things Marketplaces with Fabrice Grinda&#8221; on Spreaker.</a><script async="" src="https://widget.spreaker.com/widgets.js"></script> <p>I had a very in depth conversation with Erik Torenberg of <a rel="noreferrer noopener" aria-label="Village Global (opens in a new tab)" href="https://www.villageglobal.vc/" target="_blank">Village Global</a> about marketplaces. We discussed:</p> <ul><li>What I believe about marketplaces and the trend towards verticalization that VCs don’t believe.</li><li>How FJ Labs evaluates investments and the four criteria that we use to determine whether we will invest or not.</li><li>A breakdown of some of the failed marketplace startups.</li><li>What you need to know if you’re building a marketplace business in 2020.</li><li>An analysis of marketplaces&nbsp;for home school, child care, therapy, construction, and more.</li><li>How this intersects with the future of work and the future of food.</li><li>Why certain legacy marketplaces have managed to stick around.</li></ul> <p></p> <p></p>

<p>Listen to &#8220;All Things Marketplaces with Fabrice Grinda&#8221; on Spreaker. I had a very in depth conversation with &hellip; <a href="https://fabricegrinda.com/all-things-marketplaces/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;All Things Marketplaces&#8221;</span></a></p>

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All Things Marketplaces. Categories - Interviews &amp; Fireside Chats, Marketplaces. Date-Posted - 2020-02-11T16:00:25 . Listen to &#8220;All Things Marketplaces with Fabrice Grinda&#8221; on Spreaker. I had a very in depth conversation with Erik Torenberg of Village Global about marketplaces. We discussed: What I believe about marketplaces and the trend towards verticalization that VCs don’t believe.How FJ Labs evaluates investments and the four criteria that we use to determine whether we will invest or not.A breakdown of some of the failed marketplace startups.What you need to know if you’re building a marketplace business in 2020.An analysis of marketplaces&nbsp;for home school, child care, therapy, construction, and more.How this intersects with the future of work and the future of food.Why certain legacy marketplaces have managed to stick around.

2020-01-28T16:36:36

2020-01-28T16:36:36

https://fabricegrinda.com/?p=10823

2022-03-29T08:38:30

2022-03-29T08:38:30

fj-labs-2019-year-in-review

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https://fabricegrinda.com/fj-labs-2019-year-in-review/

FJ Labs 2019 Year in Review

<p class="has-text-align-center"></p> <figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="1126" src="https://fabricegrinda.com/wp-content/uploads/2020/01/Successful-Exits.jpg" alt="" class="wp-image-10829" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/Successful-Exits.jpg 1600w, https://fabricegrinda.com/wp-content/uploads/2020/01/Successful-Exits-768x540.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/01/Successful-Exits-1536x1081.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/01/Successful-Exits-1200x845.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/01/Successful-Exits-1320x929.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="1027" src="https://fabricegrinda.com/wp-content/uploads/2020/01/Exits.jpg" alt="" class="wp-image-10830" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/Exits.jpg 1600w, https://fabricegrinda.com/wp-content/uploads/2020/01/Exits-768x493.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/01/Exits-1536x986.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/01/Exits-1200x770.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/01/Exits-1320x847.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="1009" src="https://fabricegrinda.com/wp-content/uploads/2020/01/Capital-Deployed-1.jpg" alt="" class="wp-image-10849" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/Capital-Deployed-1.jpg 1600w, https://fabricegrinda.com/wp-content/uploads/2020/01/Capital-Deployed-1-768x484.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/01/Capital-Deployed-1-1536x969.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/01/Capital-Deployed-1-1200x757.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/01/Capital-Deployed-1-1320x832.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="2026" src="https://fabricegrinda.com/wp-content/uploads/2020/01/Notable-Fundraises-3.jpg" alt="" class="wp-image-10847" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/Notable-Fundraises-3.jpg 1600w, https://fabricegrinda.com/wp-content/uploads/2020/01/Notable-Fundraises-3-768x972.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/01/Notable-Fundraises-3-1213x1536.jpg 1213w, https://fabricegrinda.com/wp-content/uploads/2020/01/Notable-Fundraises-3-1200x1520.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/01/Notable-Fundraises-3-1320x1671.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1556" height="2560" src="https://fabricegrinda.com/wp-content/uploads/2020/01/2019-Investment-scaled.jpg" alt="" class="wp-image-10843" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/2019-Investment-scaled.jpg 1556w, https://fabricegrinda.com/wp-content/uploads/2020/01/2019-Investment-768x1264.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/01/2019-Investment-933x1536.jpg 933w, https://fabricegrinda.com/wp-content/uploads/2020/01/2019-Investment-1245x2048.jpg 1245w, https://fabricegrinda.com/wp-content/uploads/2020/01/2019-Investment-1200x1975.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/01/2019-Investment-1320x2172.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="2329" src="https://fabricegrinda.com/wp-content/uploads/2020/01/Breakdown-at-stage.jpg" alt="" class="wp-image-10837" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/Breakdown-at-stage.jpg 1600w, https://fabricegrinda.com/wp-content/uploads/2020/01/Breakdown-at-stage-768x1118.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/01/Breakdown-at-stage-1055x1536.jpg 1055w, https://fabricegrinda.com/wp-content/uploads/2020/01/Breakdown-at-stage-1407x2048.jpg 1407w, https://fabricegrinda.com/wp-content/uploads/2020/01/Breakdown-at-stage-1200x1747.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/01/Breakdown-at-stage-1320x1921.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="1160" src="https://fabricegrinda.com/wp-content/uploads/2020/01/Portfolio-Status.jpg" alt="" class="wp-image-10838" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/Portfolio-Status.jpg 1600w, https://fabricegrinda.com/wp-content/uploads/2020/01/Portfolio-Status-768x557.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/01/Portfolio-Status-1536x1114.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/01/Portfolio-Status-1200x870.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/01/Portfolio-Status-1320x957.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure>

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FJ Labs 2019 Year in Review. Categories - Entrepreneurship, FJ Labs. Date-Posted - 2020-01-28T16:36:36 .

2020-01-09T15:13:00

2020-01-09T15:13:00

https://fabricegrinda.com/?p=10566

2023-11-10T05:39:01

2023-11-10T05:39:01

getting-my-move-on

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https://fabricegrinda.com/getting-my-move-on/

2019: Getting my Move On

<p>In 2019 I moved to Turks &amp; Caicos and decided to sell my apartment in New York. I love my hybrid life where I split my time between New York and the Caribbean. It allows me to spend a month in New York where I am intellectually, socially, professionally and artistically stimulated beyond my wildest dreams. I meet countless extraordinary people, host intellectual dialoging salons and enjoy all of <a rel="noreferrer noopener" aria-label="New York’s entertainment options (opens in a new tab)" href="https://fabricegrinda.com/new-york-entertainment-recommendations/" target="_blank">New York’s entertainment options</a>. But after a month, I admit I am exhausted, and the constant doing takes time away from thinking. That’s why I then love spending a month in the Caribbean where I can work during the day, kite, and play tennis and really take the time to read, be reflective and recharge my batteries.&nbsp;</p> <p>I decided to <a rel="noreferrer noopener" aria-label="leave the Dominican Republic in 2018, (opens in a new tab)" href="https://fabricegrinda.com/2018-giving-up-and-moving-on/" target="_blank">leave the Dominican Republic in 2018</a>, and had to ponder where I should go. My real estate travails from 2012 to 2018 meant that for 7 years I did not have a real home or the playground with all the activities I adore. It’s not as though those are life essentials and I was deprived. Quite the contrary, I had amazing life experiences in asset light living (see&nbsp;<a href="https://fabricegrinda.com/the-very-big-downgrade/">The Very Big Downgrade</a>&nbsp;&amp;&nbsp;<a href="https://fabricegrinda.com/update-on-the-very-big-downgrade/">Update on the Very Big Downgrade</a>). I traveled extensively and went on many adventures, but I must admit I do miss the convenience of being able to play tennis and padel every day or just to have my friends come over for a LAN party.</p> <p>In hindsight, I should have just bought an already built house that I could just move in, in a stable country where I could buy inexpensive nearby land to build my playground and call it a day. It would not fulfill my grandiose vision of building a “Necker Island 2.0” to invite a community of entrepreneurs, artists, spiritual leaders and intellectuals to hang out, nor would it have my specific aesthetic preferences, but it would have the convenience of being immediately useful and to play the role of gathering point for friends, family and colleagues.</p> <p>This led me to buy <a rel="noreferrer noopener" aria-label="Triton (opens in a new tab)" href="http://www.tritonluxuryvilla.com" target="_blank">Triton</a> in Turks &amp; Caicos. Turks is very built out and does not have the raw authenticity of Cabarete. There are fewer days of wind for kiting, and it’s insanely expensive. However, it has the most beautiful water in the world. The weather is fantastic all year long. The flights are only three hours from New York. It’s English speaking and uses the dollar as its currency. The safety, flat water and gorgeous beaches, not to mention the absence of Zika, Chikungunya and dengue make it appealing for all my friends and their families, and not just my adventurous friends who liked the rougher conditions of my Cabarete dwelling with its massive spiders, rats and cockroaches.&nbsp;</p> <figure class="wp-block-image size-large is-style-default"><img loading="lazy" decoding="async" width="2560" height="1405" src="https://fabricegrinda.com/wp-content/uploads/2020/01/Group-24-scaled.jpg" alt="" class="wp-image-10584" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/Group-24-scaled.jpg 2560w, https://fabricegrinda.com/wp-content/uploads/2020/01/Group-24-768x422.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/01/Group-24-1536x843.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/01/Group-24-2048x1124.jpg 2048w, https://fabricegrinda.com/wp-content/uploads/2020/01/Group-24-1200x659.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/01/Group-24-1320x724.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <p>Having gleaned some lessons from my prior experiences, I decided to buy a house on Providenciales on Long Bay Beach where I can kite directly from the house and play tennis at the house. I opted not to buy on the other islands despite significantly lower prices and the availability of more land, because the lack of infrastructure makes things way more complicated and expensive. It’s also inconvenient to go for a few days if upon landing you need to be driven to a boat to get to your destination. I will now buy a little bit of inexpensive non-beachfront property to build the missing elements of my playground starting with the all-important padel court.</p> <p>At the same time the never-ending travails with my New York apartment made me decide that the time had come to move on. In 5 years, I have not been able to enjoy the apartment properly and the water damage has been such that I have been living in hotels and Airbnbs for the last 18 months. As the building is badly built, the management intractable and the building broke, I suspect that even if I ended up rebuilding it as my dream apartment,&nbsp;problems would keep popping up. In hindsight, I undervalued the benefit of being in a well-managed building with the financial means to address issues, nor did I realize the downside of having by far the best apartment in an otherwise relatively small and poor building. Having moved dozens of times in the last 18 months, I intend to rent an apartment March 2020 onwards.&nbsp;</p> <p>These travails have also cured me of home ownership. I would much rather rent and have the owner deal with whatever issues arise rather than having to deal with them myself. It means I won’t have the apartment of my dreams, but as life keeps highlighting: <strong>the best is the enemy of the good</strong>. I look forward to having a place in New York I can call home for the next few years bringing a modicum of stability to my life.</p> <p>I keep being surprised by the amount of work and costs involved with real estate ownership and how illiquid an asset class it really is. The maintenance required highlights that it is a depreciating asset that requires constant work. When you take into consideration property taxes, insurance, maintenance and the constant renovations, the net yield is negligible. Despite historically low interest rates it makes much more sense to rent. This is especially true in New York right now as the glut of high-end apartments makes it a renter’s market. I can’t wait to be rid of all the real estate I own, though the pace of divestiture has been glacial.&nbsp;</p> <p>In an ideal world I would not have bought the house in Turks, but it was unfortunately not available for long term rental. The limited housing stock on the island, almost none of which is available for long term renting, forced my hand. I do not consider it to be an investment. It’s consumption, pure and simple: a place to call home.</p> <p>Having found my new home in Turks, allowed me to have an amazing year on both the personal and professional fronts. I brought my friends and family to visit countless times. I started learning to kite foil and had countless adventures.</p> <p>Highlights were:&nbsp;</p> <ul> <li>Heliskiing with Kingfisher in Kelowna both to start and finish the year</li> <li>Skiing with lots of my friends and family in Niseko (Japan)</li> <li>My sister in law Cristina’s graduation from Fuqa (Duke)</li> <li>My nephew Edouard’s christening</li> <li>Dog sitting seeing eye dog puppies in New York</li> <li>Hosting countless intellectual salons in New York</li> <li>My 45^th birthday in Turks surrounded by friends and family</li> <li>Spending the night on Paul’s art car at Burning Man</li> <li>Going to the semifinals of the US Open</li> <li>Heliskiing in Chile</li> <li>Doing my first Ayahuasca ceremony</li> <li>Training at a padel academy in Barcelona</li> <li>Attending Greenmantle in Bordeaux</li> <li>Visiting Lisbon for the first time</li> <li>Spending Thanksgiving with friends and family in Turks</li> <li>The Luminocity Festival in New York</li> <li>Spending Christmas with my family in Miami</li> </ul> <div class="wp-block-image"> <figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/01/Group-23-scaled.jpg" alt="" class="wp-image-10577" width="566" height="1920" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/Group-23-scaled.jpg 755w, https://fabricegrinda.com/wp-content/uploads/2020/01/Group-23-768x2604.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/01/Group-23-453x1536.jpg 453w, https://fabricegrinda.com/wp-content/uploads/2020/01/Group-23-604x2048.jpg 604w, https://fabricegrinda.com/wp-content/uploads/2020/01/Group-23-1200x4069.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/01/Group-23-1320x4476.jpg 1320w" sizes="(max-width: 566px) 85vw, 566px" /></figure></div> <p>I also spent time visiting my family in Nice. It felt amazing to be back in my hometown enjoying the amazing food, playing tons of padel and spending time with my nephew.</p> <figure class="wp-block-image size-large is-style-default"><img loading="lazy" decoding="async" width="2560" height="2135" src="https://fabricegrinda.com/wp-content/uploads/2020/01/Group-25-scaled.jpg" alt="" class="wp-image-10586" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/Group-25-scaled.jpg 2560w, https://fabricegrinda.com/wp-content/uploads/2020/01/Group-25-768x640.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/01/Group-25-1536x1281.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/01/Group-25-2048x1708.jpg 2048w, https://fabricegrinda.com/wp-content/uploads/2020/01/Group-25-1200x1001.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/01/Group-25-1320x1101.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <p>FJ Labs continued to rock. In 2019, the team grew to 26 people. We deployed $51M. We made 124 investments, 83 first time investments and 41 follow-on investments. We had 22 exits, of which 11 were successful including the acquisition of Reverb by Etsy and the acquisition of Fynd by Reliance Industries.&nbsp;</p> <p>Since our inception, we invested in 558 unique companies, had 191 exits (including partial exits where we more than recouped our cost basis), and currently have 484 active investments. We’ve had realized returns of 62% IRR and a 4.4x average multiple.&nbsp;</p> <figure class="wp-block-image size-large is-style-default"><img loading="lazy" decoding="async" width="1600" height="1066" src="https://fabricegrinda.com/wp-content/uploads/2020/01/FJ-Labs-Team.jpg" alt="" class="wp-image-10587" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/FJ-Labs-Team.jpg 1600w, https://fabricegrinda.com/wp-content/uploads/2020/01/FJ-Labs-Team-768x512.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/01/FJ-Labs-Team-1536x1023.jpg 1536w, https://fabricegrinda.com/wp-content/uploads/2020/01/FJ-Labs-Team-1200x800.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/01/FJ-Labs-Team-1320x879.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <p>I spent some time thinking about the latest trends in marketplaces.</p> <div id="wppdfemb-frame-container-13692"><iframe id="wppdf-emb-iframe-13692" scrolling="no" data-pdf-index="4" class="pdfembed-iframe nonfullscreen" style="border: none; width:100%; max-width: 100%; min-height: 1000px;" src="https://fabricegrinda.com?pdfID=13692&#038;url=https%3A%2F%2Ffabricegrinda.com%2Fwp-content%2Fuploads%2F2020%2F01%2F2019-Getting-my-Move-On.pdf&#038;index=4" ></iframe></div> <p></p> <p>I also shared a lot of my entrepreneurial lessons learned in a series of keynotes, fireside chats, podcasts and video interviews:</p> <ul> <li>I gave a keynote at Noah in Berlin: <a rel="noreferrer noopener" aria-label="Marketplaces: The Party is not Over! (opens in a new tab)" href="https://fabricegrinda.com/noah-keynote-marketplaces-the-party-is-not-over/" target="_blank">Marketplaces: The Party is not Over! </a></li> <li>I had a <a rel="noreferrer noopener" aria-label="fireside chat about building marketplaces (opens in a new tab)" href="https://fabricegrinda.com/fireside-chat-about-building-marketplaces-with-jason-goldlist-at-techtoronto/" target="_blank">fireside chat about building marketplaces</a> with Jason Goldlist at TechToronto </li> <li>I had a fireside chat with Liz Myers organized by the Princeton Entrepreneurship Council</li> <li>I gave a keynote on how tech will make the world a better place for La French Tech</li> <li>I moderated a panel at Web Summit and spoke on 5 panels including: <ul> <li><a href="https://fabricegrinda.com/web-summit-panel-the-new-marketplaces/">The New Marketplaces</a> </li> <li><a rel="noreferrer noopener" aria-label="Ideas are easy, business is hard (opens in a new tab)" href="https://fabricegrinda.com/web-summit-panel-ideas-are-easy-business-is-hard/" target="_blank">Ideas are easy, business is hard</a> </li> </ul> </li> <li>I covered my origin story on the <a rel="noreferrer noopener" aria-label="Origins podcast (opens in a new tab)" href="https://fabricegrinda.com/origins-podcast/" target="_blank">Origins podcast </a></li> <li>I discussed the ups and downs of entrepreneurship on the <a rel="noreferrer noopener" aria-label="Creator Lab podcast (opens in a new tab)" href="https://fabricegrinda.com/creator-lab-podcast-fabrice-grinda-1-angel-investor-in-the-world-future-of-marketplaces/" target="_blank">Creator Lab podcast </a></li> </ul> <p>It was fun to get a full page in the local newspaper just as I came to visit my family in Nice and to be covered in <a rel="noreferrer noopener" aria-label="Les Echos (opens in a new tab)" href="https://fabricegrinda.com/interview-in-les-echos-in-french-tech-will-make-the-world-a-better-place/" target="_blank">Les Echos</a> around the French Tech conference.&nbsp;</p> <figure class="wp-block-image size-large is-style-default"><img loading="lazy" decoding="async" width="2232" height="2560" src="https://fabricegrinda.com/wp-content/uploads/2020/01/Group-276-scaled.jpg" alt="" class="wp-image-10591" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/Group-276-scaled.jpg 2232w, https://fabricegrinda.com/wp-content/uploads/2020/01/Group-276-768x881.jpg 768w, https://fabricegrinda.com/wp-content/uploads/2020/01/Group-276-1339x1536.jpg 1339w, https://fabricegrinda.com/wp-content/uploads/2020/01/Group-276-1786x2048.jpg 1786w, https://fabricegrinda.com/wp-content/uploads/2020/01/Group-276-1200x1376.jpg 1200w, https://fabricegrinda.com/wp-content/uploads/2020/01/Group-276-1320x1514.jpg 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></figure> <p>In terms of writing, I finished my framework for making important decisions in life:</p> <ul> <li><a href="https://fabricegrinda.com/a-framework-for-making-important-decisions-step-3-4/" target="_blank" rel="noreferrer noopener" aria-label="A framework for making important decisions: Step 3 of 4 (opens in a new tab)">A framework for making important decisions: Step 3 of 4</a></li> <li><a href="https://fabricegrinda.com/a-framework-for-making-important-decisions-step-4-4/" target="_blank" rel="noreferrer noopener" aria-label="A framework for making important decisions: Step 4 of 4 (opens in a new tab)">A framework for making important decisions: Step 4 of 4</a></li> </ul> <p>I also reviewed <a rel="noreferrer noopener" aria-label="Why We Sleep (opens in a new tab)" href="https://fabricegrinda.com/why-we-sleep-is-a-must-read-and-may-be-the-scariest-book-i-ever-read/" target="_blank">Why We Sleep</a> given that I made significant life changes post reading the book and wrote a <a rel="noreferrer noopener" aria-label="packing list for Burning Man (opens in a new tab)" href="https://fabricegrinda.com/avoid-death-in-the-desert-75-packing-list-essentials-for-burning-man/" target="_blank">packing list for Burning Man</a> to help virgins and grizzled veterans alike.</p> <p>My economic predictions for 2019 were correct: the US economy did well. We are now in the longest expansion on record, and tech remained the sector to be in. While we are late in the economic cycle, the US may very well continue to do well until the end of 2020. We are at full employment and presidential election years typically have loose fiscal and monetary policies.&nbsp;</p> <p>The main recession risk seems geopolitical given the current slew of world “leaders.” I suspect that the largest risk to the world economy is a budget crisis in Italy. It would put the Euro project at risk and lead to a massive flight to safety, creating the next global recession.&nbsp;</p> <p>The current political climate keeps reinforcing my decision to avoid following and reading news be it in newspapers, online or on TV. It’s sensationalist negative entertainment that misses the real technology-led improvements that happen slowly, but inexorably transform our lives for the better.&nbsp;</p> <p>Despite the implosion of WeWork and the travails at Softbank, I remain very bullish on early stage venture capital. We are still at the very beginning of the technology revolution. Only 15% of commerce is online. Online penetration remains negligible in the sectors that account for most of GDP: education, health care, and public services. The way we build homes is still artisanal. Synthetic biology is in its infancy. The emerging trend of no-code, which allows non-programmers to build complex fully functional websites, is unleashing a massive wave of innovation. It democratizes startup creation and innovation allowing people from all walks of life and every educational background to partake in the Internet revolution. &nbsp;</p> <p>We are meeting more extraordinary entrepreneurs than ever before. There are still billions of capital on the sidelines in later stage funds like Sequoia and Insight that need to be put to work in the next few years. I suspect that even if some of these funds disappoint, most will still be able to raise their next fund. The current low rate environment, with no end in sight, will continue to lead to yield chasing. All that to say Seed and Series A funded startups will have access to plenty of capital. The technology sector remains the engine of productivity and economic growth and will continue to do well in 2020.</p> <p>Happy new year!</p>

<p>In 2019 I moved to Turks &amp; Caicos and decided to sell my apartment in New York. I &hellip; <a href="https://fabricegrinda.com/getting-my-move-on/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;2019: Getting my Move On&#8221;</span></a></p>

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2019: Getting my Move On. Categories - Featured Posts, Year in Review, Personal Musings, Year in Review. Date-Posted - 2020-01-09T15:13:00 . In 2019 I moved to Turks &amp; Caicos and decided to sell my apartment in New York. I love my hybrid life where I split my time between New York and the Caribbean. It allows me to spend a month in New York where I am intellectually, socially, professionally and artistically stimulated beyond my wildest dreams. I meet countless extraordinary people, host intellectual dialoging salons and enjoy all of New York’s entertainment options. But after a month, I admit I am exhausted, and the constant doing takes time away from thinking. That’s why I then love spending a month in the Caribbean where I can work during the day, kite, and play tennis and really take the time to read, be reflective and recharge my batteries.&nbsp; I decided to leave the Dominican Republic in 2018, and had to ponder where I should go. My real estate travails from 2012 to 2018 meant that for 7 years I did not have a real home or the playground with all the activities I adore. It’s not as though those are life essentials and I was deprived. Quite the contrary, I had amazing life experiences in asset light living (see&nbsp;The Very Big Downgrade&nbsp;&amp;&nbsp;Update on the Very Big Downgrade). I traveled extensively and went on many adventures, but I must admit I do miss the convenience of being able to play tennis and padel every day or just to have my friends come over for a LAN party. In hindsight, I should have just bought an already built house that I could just move in, in a stable country where I could buy inexpensive nearby land to build my playground and call it a day. It would not fulfill my grandiose vision of building a “Necker Island 2.0” to invite a community of entrepreneurs, artists, spiritual leaders and intellectuals to hang out, nor would it have my specific aesthetic preferences, but it would have the convenience of being immediately useful and to play the role of gathering point for friends, family and colleagues. This led me to buy Triton in Turks &amp; Caicos. Turks is very built out and does not have the raw authenticity of Cabarete. There are fewer days of wind for kiting, and it’s insanely expensive. However, it has the most beautiful water in the world. The weather is fantastic all year long. The flights are only three hours from New York. It’s English speaking and uses the dollar as its currency. The safety, flat water and gorgeous beaches, not to mention the absence of Zika, Chikungunya and dengue make it appealing for all my friends and their families, and not just my adventurous friends who liked the rougher conditions of my Cabarete dwelling with its massive spiders, rats and cockroaches.&nbsp; Having gleaned some lessons from my prior experiences, I decided to buy a house on Providenciales on Long Bay Beach where I can kite directly from the house and play tennis at the house. I opted not to buy on the other islands despite significantly lower prices and the availability of more land, because the lack of infrastructure makes things way more complicated and expensive. It’s also inconvenient to go for a few days if upon landing you need to be driven to a boat to get to your destination. I will now buy a little bit of inexpensive non-beachfront property to build the missing elements of my playground starting with the all-important padel court. At the same time the never-ending travails with my New York apartment made me decide that the time had come to move on. In 5 years, I have not been able to enjoy the apartment properly and the water damage has been such that I have been living in hotels and Airbnbs for the last 18 months. As the building is badly built, the management intractable and the building broke, I suspect that even if I ended up rebuilding it as my dream apartment,&nbsp;problems would keep popping up. In hindsight, I undervalued the benefit of being in a well-managed building with the financial means to address issues, nor did I realize the downside of having by far the best apartment in an otherwise relatively small and poor building. Having moved dozens of times in the last 18 months, I intend to rent an apartment March 2020 onwards.&nbsp; These travails have also cured me of home ownership. I would much rather rent and have the owner deal with whatever issues arise rather than having to deal with them myself. It means I won’t have the apartment of my dreams, but as life keeps highlighting: the best is the enemy of the good. I look forward to having a place in New York I can call home for the next few years bringing a modicum of stability to my life. I keep being surprised by the amount of work and costs involved with real estate ownership and how illiquid an asset class it really is. The maintenance required highlights that it is a depreciating asset that requires constant work. When you take into consideration property taxes, insurance, maintenance and the constant renovations, the net yield is negligible. Despite historically low interest rates it makes much more sense to rent. This is especially true in New York right now as the glut of high-end apartments makes it a renter’s market. I can’t wait to be rid of all the real estate I own, though the pace of divestiture has been glacial.&nbsp; In an ideal world I would not have bought the house in Turks, but it was unfortunately not available for long term rental. The limited housing stock on the island, almost none of which is available for long term renting, forced my hand. I do not consider it to be an investment. It’s consumption, pure and simple: a place to call home. Having found my new home in Turks, allowed me to have an amazing year on both the personal and professional fronts. I brought my friends and family to visit countless times. I started learning to kite foil and had countless adventures. Highlights were:&nbsp; Heliskiing with Kingfisher in Kelowna both to start and finish the year Skiing with lots of my friends and family in Niseko (Japan) My sister in law Cristina’s graduation from Fuqa (Duke) My nephew Edouard’s christening Dog sitting seeing eye dog puppies in New York Hosting countless intellectual salons in New York My 45th birthday in Turks surrounded by friends and family Spending the night on Paul’s art car at Burning Man Going to the semifinals of the US Open Heliskiing in Chile Doing my first Ayahuasca ceremony Training at a padel academy in Barcelona Attending Greenmantle in Bordeaux Visiting Lisbon for the first time Spending Thanksgiving with friends and family in Turks The Luminocity Festival in New York Spending Christmas with my family in Miami I also spent time visiting my family in Nice. It felt amazing to be back in my hometown enjoying the amazing food, playing tons of padel and spending time with my nephew. FJ Labs continued to rock. In 2019, the team grew to 26 people. We deployed $51M. We made 124 investments, 83 first time investments and 41 follow-on investments. We had 22 exits, of which 11 were successful including the acquisition of Reverb by Etsy and the acquisition of Fynd by Reliance Industries.&nbsp; Since our inception, we invested in 558 unique companies, had 191 exits (including partial exits where we more than recouped our cost basis), and currently have 484 active investments. We’ve had realized returns of 62% IRR and a 4.4x average multiple.&nbsp; I spent some time thinking about the latest trends in marketplaces. I also shared a lot of my entrepreneurial lessons learned in a series of keynotes, fireside chats, podcasts and video interviews: I gave a keynote at Noah in Berlin: Marketplaces: The Party is not Over! I had a fireside chat about building marketplaces with Jason Goldlist at TechToronto I had a fireside chat with Liz Myers organized by the Princeton Entrepreneurship Council I gave a keynote on how tech will make the world a better place for La French Tech I moderated a panel at Web Summit and spoke on 5 panels including: The New Marketplaces Ideas are easy, business is hard I covered my origin story on the Origins podcast I discussed the ups and downs of entrepreneurship on the Creator Lab podcast It was fun to get a full page in the local newspaper just as I came to visit my family in Nice and to be covered in Les Echos around the French Tech conference.&nbsp; In terms of writing, I finished my framework for making important decisions in life: A framework for making important decisions: Step 3 of 4 A framework for making important decisions: Step 4 of 4 I also reviewed Why We Sleep given that I made significant life changes post reading the book and wrote a packing list for Burning Man to help virgins and grizzled veterans alike. My economic predictions for 2019 were correct: the US economy did well. We are now in the longest expansion on record, and tech remained the sector to be in. While we are late in the economic cycle, the US may very well continue to do well until the end of 2020. We are at full employment and presidential election years typically have loose fiscal and monetary policies.&nbsp; The main recession risk seems geopolitical given the current slew of world “leaders.” I suspect that the largest risk to the world economy is a budget crisis in Italy. It would put the Euro project at risk and lead to a massive flight to safety, creating the next global recession.&nbsp; The current political climate keeps reinforcing my decision to avoid following and reading news be it in newspapers, online or on TV. It’s sensationalist negative entertainment that misses the real technology-led improvements that happen slowly, but inexorably transform our lives for the better.&nbsp; Despite the implosion of WeWork and the travails at Softbank, I remain very bullish on early stage venture capital. We are still at the very beginning of the technology revolution. Only 15% of commerce is online. Online penetration remains negligible in the sectors that account for most of GDP: education, health care, and public services. The way we build homes is still artisanal. Synthetic biology is in its infancy. The emerging trend of no-code, which allows non-programmers to build complex fully functional websites, is unleashing a massive wave of innovation. It democratizes startup creation and innovation allowing people from all walks of life and every educational background to partake in the Internet revolution. &nbsp; We are meeting more extraordinary entrepreneurs than ever before. There are still billions of capital on the sidelines in later stage funds like Sequoia and Insight that need to be put to work in the next few years. I suspect that even if some of these funds disappoint, most will still be able to raise their next fund. The current low rate environment, with no end in sight, will continue to lead to yield chasing. All that to say Seed and Series A funded startups will have access to plenty of capital. The technology sector remains the engine of productivity and economic growth and will continue to do well in 2020. Happy new year!

2020-01-06T18:09:58

2020-01-06T18:09:58

https://fabricegrinda.com/?p=10459

2023-11-17T13:53:08

2023-11-17T13:53:08

new-york-entertainment-recommendations

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New York Entertainment Recommendations

<p>My friends all seemingly decided to descend upon New York for the holidays. As they already saw the prototypical New York attractions (Met, Museum of Natural History, MOMA, Liberty Tower, The Lion King), they asked for more unique recommendations.</p> <p><a rel="noreferrer noopener" href="https://houseofyes.org/calendar/" target="_blank"><strong>Dirty Circus at House of Yes</strong></a></p> <figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="595" height="298" src="https://fabricegrinda.com/wp-content/uploads/2020/01/image027.png" alt="" class="wp-image-10460" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/image027.png 595w, https://fabricegrinda.com/wp-content/uploads/2020/01/image027-300x150.png 300w" sizes="(max-width: 595px) 85vw, 595px" /></figure> <p>This raunchy variety show features a little bit of everything: acrobatics, burlesque and general insanity. It’s amazing and somehow the amateurishness of some of the acts only add to its charm. You also get to meet the young, fun and hot Burning Man crowd of Bushwick.</p> <p>It’s typically every few Wednesdays starting at 8 pm.&nbsp;<a rel="noreferrer noopener" href="https://www.eventbrite.com/e/dirty-circus-tickets-85269161357" target="_blank">The next one is on January 29</a></p> <p><strong><a rel="noreferrer noopener" href="https://www.paradiseclubnyc.com/the-devouring/" target="_blank">The Devouring</a></strong></p> <figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="604" height="311" src="https://fabricegrinda.com/wp-content/uploads/2020/01/image028.jpg" alt="" class="wp-image-10461" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/image028.jpg 604w, https://fabricegrinda.com/wp-content/uploads/2020/01/image028-300x154.jpg 300w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 984px) 61vw, (max-width: 1362px) 45vw, 600px" /></figure> <p>If Bushwick and the nudity of House of Yes are too aggressive for you, then The Devouring should be right up your alley. It is the result of a collaboration between Studio 54’s Ian Schrager, House of Yes and Michelin-starred Chef John Fraser. It’s what Dirty Circus would be if it had money and professional performers in the context of an exquisite meal. It’s an ode to the human experience, and a dazzling neo-burlesque extravaganza. It is a modern-day cabaret, a feast, and a celebration of being alive.</p> <p><strong>Derren Brown: Secret</strong></p> <figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/01/image029.jpg" alt="" class="wp-image-10462" width="544" height="306" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/image029.jpg 725w, https://fabricegrinda.com/wp-content/uploads/2020/01/image029-300x169.jpg 300w" sizes="(max-width: 544px) 85vw, 544px" /></figure> <p>This show’s run ends on January 4^th&nbsp;so hurry to go see it! Derren Brown’s is the best mentalist in the world. His show is a mix of mind reading, persuasion, and psychological illusion focused on the stories and the beliefs that guide our lives.&nbsp;</p> <p>If you can’t make it make sure to watch his shows on Youtube and Netflix.</p> <p><strong><a rel="noreferrer noopener" href="https://www.nomadupstairs.com/" target="_blank">The Magician at the Nomad</a></strong></p> <figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="675" height="362" src="https://fabricegrinda.com/wp-content/uploads/2020/01/image030.png" alt="" class="wp-image-10463" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/image030.png 675w, https://fabricegrinda.com/wp-content/uploads/2020/01/image030-300x161.png 300w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 984px) 61vw, (max-width: 1362px) 45vw, 600px" /></figure> <p>This is the best magic show I’ve ever seen. It features a little bit of everything: levitation, card tricks, mentalism in a small, dark and intimate setting. If you are a fan of magic, this is the show to see!</p> <p><strong><a rel="noreferrer noopener" href="https://freestylelovesupreme.com/" target="_blank">Freestyle Love Supreme</a></strong></p> <figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="675" height="380" src="https://fabricegrinda.com/wp-content/uploads/2020/01/image031.jpg" alt="" class="wp-image-10464" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/image031.jpg 675w, https://fabricegrinda.com/wp-content/uploads/2020/01/image031-300x169.jpg 300w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 984px) 61vw, (max-width: 1362px) 45vw, 600px" /></figure> <p>Every night the performers take suggestions from the audience and spin them into instantaneous riffs and full-length musical numbers. Every show is a freestyle, hip-hop, improvisational, never-before-seen comedy ride with frequent unexpected guest appearances by Lin-Manuel Miranda of Hamilton fame who is one of the co-creators of the show.</p> <p><strong><a rel="noreferrer noopener" href="https://www.woomcenter.com/experiences/" target="_blank">The Woom Sound Experience</a></strong></p> <figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/01/image032.jpg" alt="" class="wp-image-10465" width="461" height="307" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/image032.jpg 614w, https://fabricegrinda.com/wp-content/uploads/2020/01/image032-300x200.jpg 300w" sizes="(max-width: 461px) 85vw, 461px" /></figure> <p>I am huge fan of the&nbsp;<a href="https://www.woomcenter.com/" target="_blank" rel="noreferrer noopener">Woom Center</a>&nbsp;and especially of David &amp; Elian’s sound experience. This meditation features group vocalizations, Holotropic breathing (which mimics naturally the effect on your brain of LSD) and beautiful overtone sounds that take you on a journey to heightened states of awareness.</p> <p>I recommend it to everyone and especially to meditation neophytes will feel transformed. It’s every Friday at 7:30 pm. Don’t let the three-hour duration scare you as it feels like it goes by in 20 minutes every time!</p> <p><strong>VR World</strong></p> <figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/01/image033.jpg" alt="" class="wp-image-10466" width="299" height="400" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/image033.jpg 299w, https://fabricegrinda.com/wp-content/uploads/2020/01/image033-224x300.jpg 224w" sizes="(max-width: 299px) 85vw, 299px" /></figure> <p>VR has not yet reached the stage where I would recommend people to own a device. The graphics pale in comparison to those on PS4, Xbox and PC and the latency still leads to motion sickness. However, it’s tons of fun to spend a few hours with dozens of top-of-the-line VR devices with exactly the right setup for each game or experience. Make sure you go with a few friends as it’s tons of fun to play together or against each other.&nbsp;</p> <p><strong>Zero Space</strong></p> <figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="655" height="358" src="https://fabricegrinda.com/wp-content/uploads/2020/01/image034.jpg" alt="" class="wp-image-10467" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/image034.jpg 655w, https://fabricegrinda.com/wp-content/uploads/2020/01/image034-300x164.jpg 300w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 984px) 61vw, (max-width: 1362px) 45vw, 600px" /></figure> <p>Zero Space is an immersive, interactive, digital art playground. It feels psychedelic in nature and is really mind blowing. The show is a bit simplistic, but is definitely worth seeing as a harbinger of what is to come even though we are still decades away from having a proper Star Trek level holodeck.&nbsp;</p> <p>&nbsp;<strong><a rel="noreferrer noopener" href="https://thenshefell.com/" target="_blank">Then She Fell</a></strong></p> <figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/01/image035.jpg" alt="" class="wp-image-10468" width="435" height="245" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/image035.jpg 435w, https://fabricegrinda.com/wp-content/uploads/2020/01/image035-300x169.jpg 300w" sizes="(max-width: 435px) 85vw, 435px" /></figure> <p><em>Sleep No More&nbsp;</em>pioneered immersive theater, but if there was one criticism that could be levelled upon it is that your experience could vary greatly based on what you ended up doing and who you ended up following in the theater.&nbsp;<em>Then She Fell</em>&nbsp;addresses that issue by creating an immersive theater experience with only 15 audience members per show. As a result, you are always part of the action.&nbsp;</p> <p>The show takes place in a Williamsburg-based three story building meticulously made over to resemble a mental hospital featuring Lewis Carroll’s work and life and especially his relationship with Alice Liddell, the young girl who was his muse for&nbsp;<em>Alice in Wonderland</em>&nbsp;and&nbsp;<em>Through the Looking Glass</em>. It’s intimate, engaging and by far the most fun, compelling and interesting immersive theater experience I attended.&nbsp;</p> <p><strong><a rel="noreferrer noopener" href="https://www.comedycellar.com/" target="_blank">Comedy Cellar</a></strong></p> <figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/01/image036-1.jpg" alt="" class="wp-image-10470" width="515" height="284" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/image036-1.jpg 515w, https://fabricegrinda.com/wp-content/uploads/2020/01/image036-1-300x165.jpg 300w" sizes="(max-width: 515px) 85vw, 515px" /></figure> <p>Comedy Cellar is an institution and the greatest comedy club in the world. There is always a fantastic line up with a mix of very well known and up and coming comics. Some of the superstars of the profession sometimes drop in unannounced. I’ve been there with Robin Williams, Chris Rock and countless others!&nbsp;</p> <p>&nbsp;<strong><a rel="noreferrer noopener" href="https://museumhack.com/tours/new-york-city/" target="_blank">Museum Hack</a></strong></p> <figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/01/image037.jpg" alt="" class="wp-image-10471" width="461" height="161" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/image037.jpg 461w, https://fabricegrinda.com/wp-content/uploads/2020/01/image037-300x105.jpg 300w" sizes="(max-width: 461px) 85vw, 461px" /></figure> <p>If you ever thought museums were boring, this is the way to experience them. These are fast paced and hilarious despite being extraordinarily informative. It’s definitely the way to experience both The Met and The Museum of Natural History.&nbsp;<br></p> <p><strong><a rel="noreferrer noopener" href="http://www.mondaynightmagic.com/MainMenu.html" target="_blank">Monday Night Magic</a></strong></p> <figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/01/image038.jpg" alt="" class="wp-image-10472" width="408" height="249" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/image038.jpg 408w, https://fabricegrinda.com/wp-content/uploads/2020/01/image038-300x183.jpg 300w" sizes="(max-width: 408px) 85vw, 408px" /></figure> <p>Monday Night Magic is a fun, inexpensive, kid friendly magic show. It features diverse performances by the best magicians who happen to be in New York that week creating ever fresh experiences.&nbsp;<br></p> <p><strong><a rel="noreferrer noopener" href="https://hamiltonmusical.com/new-york/" target="_blank">Hamilton</a></strong></p> <figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2020/01/image039.jpg" alt="" class="wp-image-10473" width="601" height="407" srcset="https://fabricegrinda.com/wp-content/uploads/2020/01/image039.jpg 601w, https://fabricegrinda.com/wp-content/uploads/2020/01/image039-300x203.jpg 300w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 984px) 61vw, (max-width: 1362px) 45vw, 600px" /></figure> <p>This is probably the best musical ever. I am highly biased as Alexander Hamilton is one of my role models and I was a huge fan of his biography by Ron Chernow that the musical is based on. However, this insane hip hop musical is a tour de force and the only musical that made me bawl my eyes out. You must see it!&nbsp;<br></p>

<p>My friends all seemingly decided to descend upon New York for the holidays. As they already saw the &hellip; <a href="https://fabricegrinda.com/new-york-entertainment-recommendations/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;New York Entertainment Recommendations&#8221;</span></a></p>

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New York Entertainment Recommendations. Categories - Featured Posts, Musings, New York, Plays. Date-Posted - 2020-01-06T18:09:58 . My friends all seemingly decided to descend upon New York for the holidays. As they already saw the prototypical New York attractions (Met, Museum of Natural History, MOMA, Liberty Tower, The Lion King), they asked for more unique recommendations. Dirty Circus at House of Yes This raunchy variety show features a little bit of everything: acrobatics, burlesque and general insanity. It’s amazing and somehow the amateurishness of some of the acts only add to its charm. You also get to meet the young, fun and hot Burning Man crowd of Bushwick. It’s typically every few Wednesdays starting at 8 pm.&nbsp;The next one is on January 29 The Devouring If Bushwick and the nudity of House of Yes are too aggressive for you, then The Devouring should be right up your alley. It is the result of a collaboration between Studio 54’s Ian Schrager, House of Yes and Michelin-starred Chef John Fraser. It’s what Dirty Circus would be if it had money and professional performers in the context of an exquisite meal. It’s an ode to the human experience, and a dazzling neo-burlesque extravaganza. It is a modern-day cabaret, a feast, and a celebration of being alive. Derren Brown: Secret This show’s run ends on January 4th&nbsp;so hurry to go see it! Derren Brown’s is the best mentalist in the world. His show is a mix of mind reading, persuasion, and psychological illusion focused on the stories and the beliefs that guide our lives.&nbsp; If you can’t make it make sure to watch his shows on Youtube and Netflix. The Magician at the Nomad This is the best magic show I’ve ever seen. It features a little bit of everything: levitation, card tricks, mentalism in a small, dark and intimate setting. If you are a fan of magic, this is the show to see! Freestyle Love Supreme Every night the performers take suggestions from the audience and spin them into instantaneous riffs and full-length musical numbers. Every show is a freestyle, hip-hop, improvisational, never-before-seen comedy ride with frequent unexpected guest appearances by Lin-Manuel Miranda of Hamilton fame who is one of the co-creators of the show. The Woom Sound Experience I am huge fan of the&nbsp;Woom Center&nbsp;and especially of David &amp; Elian’s sound experience. This meditation features group vocalizations, Holotropic breathing (which mimics naturally the effect on your brain of LSD) and beautiful overtone sounds that take you on a journey to heightened states of awareness. I recommend it to everyone and especially to meditation neophytes will feel transformed. It’s every Friday at 7:30 pm. Don’t let the three-hour duration scare you as it feels like it goes by in 20 minutes every time! VR World VR has not yet reached the stage where I would recommend people to own a device. The graphics pale in comparison to those on PS4, Xbox and PC and the latency still leads to motion sickness. However, it’s tons of fun to spend a few hours with dozens of top-of-the-line VR devices with exactly the right setup for each game or experience. Make sure you go with a few friends as it’s tons of fun to play together or against each other.&nbsp; Zero Space Zero Space is an immersive, interactive, digital art playground. It feels psychedelic in nature and is really mind blowing. The show is a bit simplistic, but is definitely worth seeing as a harbinger of what is to come even though we are still decades away from having a proper Star Trek level holodeck.&nbsp; &nbsp;Then She Fell Sleep No More&nbsp;pioneered immersive theater, but if there was one criticism that could be levelled upon it is that your experience could vary greatly based on what you ended up doing and who you ended up following in the theater.&nbsp;Then She Fell&nbsp;addresses that issue by creating an immersive theater experience with only 15 audience members per show. As a result, you are always part of the action.&nbsp; The show takes place in a Williamsburg-based three story building meticulously made over to resemble a mental hospital featuring Lewis Carroll’s work and life and especially his relationship with Alice Liddell, the young girl who was his muse for&nbsp;Alice in Wonderland&nbsp;and&nbsp;Through the Looking Glass. It’s intimate, engaging and by far the most fun, compelling and interesting immersive theater experience I attended.&nbsp; Comedy Cellar Comedy Cellar is an institution and the greatest comedy club in the world. There is always a fantastic line up with a mix of very well known and up and coming comics. Some of the superstars of the profession sometimes drop in unannounced. I’ve been there with Robin Williams, Chris Rock and countless others!&nbsp; &nbsp;Museum Hack If you ever thought museums were boring, this is the way to experience them. These are fast paced and hilarious despite being extraordinarily informative. It’s definitely the way to experience both The Met and The Museum of Natural History.&nbsp; Monday Night Magic Monday Night Magic is a fun, inexpensive, kid friendly magic show. It features diverse performances by the best magicians who happen to be in New York that week creating ever fresh experiences.&nbsp; Hamilton This is probably the best musical ever. I am highly biased as Alexander Hamilton is one of my role models and I was a huge fan of his biography by Ron Chernow that the musical is based on. However, this insane hip hop musical is a tour de force and the only musical that made me bawl my eyes out. You must see it!&nbsp;

2019-11-26T18:55:38

2019-11-26T18:55:38

https://fabricegrinda.com/?p=9963

2021-05-28T06:54:08

2021-05-28T06:54:08

2019-holiday-gadget-gift-guide

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https://fabricegrinda.com/2019-holiday-gadget-gift-guide/

2019 Holiday Gadget Gift Guide

<p class="has-text-align-center"></p> <p>Most of my recommendations from the <a href="https://fabricegrinda.com/2017-holiday-gadget-gift-guide/" target="_blank" rel="noreferrer noopener" aria-label="2017 (opens in a new tab)">2017</a> &amp; <a href="https://fabricegrinda.com/2018-holiday-gadget-gift-guide/" target="_blank" rel="noreferrer noopener" aria-label="2018 (opens in a new tab)">2018</a> Holiday Gadget Gift Guides still hold. For 2019, I decided to focus on what changed from the past few years.</p> <p><strong>Notebook: MSI GS75 Stealth</strong></p> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" width="871" height="535" src="https://fabricegrinda.com/wp-content/uploads/2019/11/51BZEsLh4IL._SL1000_.png" alt="" class="wp-image-9966"/></figure></div> <p>I am a huge fan for MSI. My recommendations this year are the <a rel="noreferrer noopener" aria-label="MSI GS75 Stealth (opens in a new tab)" href="https://www.amazon.com/MSI-GS75-Stealth-480-i9-9880H- Thunderbolt/dp/B07QKNZ2XY/ref=pd_sbs_147_2/144-9995814- 3123749?_encoding=UTF8&amp;pd_rd_i=B07QKQLSZR&amp;pd_rd_r=c2275b7e-148f-4ff8-9936- 0d29df459e31&amp;pd_rd_w=sVzkN&amp;pd_rd_wg=b8fr5&amp;pf_rd_p=52b7592c-2dc9-4ac6-84d4- 4bda6360045e&amp;pf_rd_r=5MPRY6QH0EKFR7JRS9JH&amp;refRID=5MPRY6QH0EKFR7JRS9JH&amp;th=1" target="_blank">MSI GS75 Stealth</a>. </p> <p>It’s incredibly powerful with a 144Hz 3ms screen, i9-9880H processor, Nvidia RTX 2080 Max-Q with 8Gb of GDDR6, and a 1TB NVMe SSD. It’s incredibly light at 4.96 pounds for a 17” screen! (Note that I bought a version with 4Tb of SSD, but that might be overkill for most.)</p> <p>In the past I opted for the 15” version, but this year I switched to the 17” version. I prefer the larger screen to work and play on when I am traveling, and it has a much longer battery life. If you are size constrained the 15” version (the MSI GS65 Stealth) is also a great option and only weighs 4.19 pounds.</p> <p><strong>Drone: Skydio 2</strong></p> <figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1230" height="506" src="https://fabricegrinda.com/wp-content/uploads/2019/11/Skydio_2.png" alt="" class="wp-image-9968"/></figure> <p>I own the Mavic 2 Zoom and it’s amazing. It works in high winds, so it’s the only drone you can use to record kite surfing, but it needs to be piloted. The Active Track function is primitive, and the drone loses you easily, even without obstacles. <br> <br> Last year I bought the Skydio R1 but could not quite recommend it. It was super expensive, noisy, battery life was limited, and it still lost you relatively often. Also, it could only follow you and could not be flown, so it only had 1 real use case. That said the fact that you could basically launch and forget it really impressed me.&nbsp;</p> <p>Enter the<a href="http://ww.skydio.com" target="_blank" rel="noreferrer noopener" aria-label=" Skydio 2 (opens in a new tab)"> Skydio 2</a>: it’s 50% quieter, has a much higher quality camera, high speed and battery life while being much cheaper at $999. You can also fly it and given its collision avoidance it does not require an experienced pilot. It can navigate regions with obstacles very effectively on its own while you simply tell it to go forward.&nbsp;</p> <p>Here is a video I took this September heliskiing in Chile captured by my Skydio R1.</p> <iframe loading="lazy" width="980" height="472" src="https://www.youtube.com/embed/7HLRzqOVhyM" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen=""></iframe> <p><br>I am looking forward to really putting the Skydio 2 through its paces in January and February for my next heliskiing trips in Canada. This time there will be tight trees so it will be a lot more challenging for it.&nbsp;</p> <p><strong>Video Games: Call of Duty Modern Warfare, Gears 5, Star Wars Jedi: Fallen Order, StarCraft 2 and Unity of Command 2</strong></p> <figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1045" height="299" src="https://fabricegrinda.com/wp-content/uploads/2019/11/Group-223.png" alt="" class="wp-image-9976"/></figure> <p>I had not played <strong>Call of Duty</strong> in many years as I had tired of the formula and the ever less realistic direction they were going in. The latest installment is a return to form and after years of hiatus, it was fun to scratch my first-person shooter itch. I also love the fact that the campaign has a multiplayer coop mode.&nbsp;</p> <p>I love third-person action adventure games. This year there are two great entrees in the genre: <strong>Gears 5 </strong>and <strong>Fallen Order</strong>. Gears 5does not have the minute controls of the Drake Unchartered or Tomb Raider games but is super fun to play especially as it’s the only third person adventure game with a multiplayer coop campaign (which is the only way I play the game). Fallen Order is an interesting hybrid between the Dark Soul and Unchartered games with a fun mix of exploration, combat and puzzle solving within the context of a super engaging single player campaign.&nbsp;</p> <p>You might be surprised by my recommendation of <strong>StarCraft 2</strong>, which is a decade old. However, I had never really tried the game when it came out. I had finally tired of <strong>Company of Heroes 2</strong> and was disappointed by the recent entries in the real time strategy genre. As StarCraft 2 was now free to play I decided to give it a real shot. I was shocked by how well balanced and nuanced the game is and immediately took to it. I am now a Diamond-level Zerg player despite being a newcomer and beginner to the game and am looking forward to having a lot of fun with the game for the foreseeable future. (Note that for RTS games I don’t play the campaigns and only play online multiplayer on the ladder.)</p> <p><strong>Unity of Command 2 </strong>is the best turn-based strategy game in years. I was a fan of <strong>Panzer General</strong> back in the day and am excited to be revisiting the genre. It has great gameplay, is beautiful (for the genre) and is fun and challenging, while being accessible for those new to the genre.&nbsp;</p> <p><strong>eReader: The new Kindle Oasis 2019</strong></p> <div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" width="814" height="740" src="https://fabricegrinda.com/wp-content/uploads/2019/11/Capture-d’écran-2019-11-26-à-19.29.49.png" alt="" class="wp-image-9969"/></figure></div> <p>In the past I always recommended the Kindle Paperwhite. It’s a much better value at $129.99 vs. the Oasis’ $249.99. Given how much I read (50-100 books per year), I thought it was worth splurging and trying the <a href="https://www.amazon.com/All-new-Kindle-Oasis-now-with-adjustable-warm-light/dp/B07F7TLZF4?ref_=ast_slp_dp" target="_blank" rel="noreferrer noopener" aria-label="Oasis (opens in a new tab)">Oasis</a> out. It was the right call. I am loving that the screen is 1” larger at 7”, that you can color adjust the integrated light, that it’s light, quick and fully waterproof. It’s the best e-reader on the market.&nbsp;</p> <p>If money is no object, it’s the e-reader to get.</p>

<p>Most of my recommendations from the 2017 &amp; 2018 Holiday Gadget Gift Guides still hold. For 2019, I &hellip; <a href="https://fabricegrinda.com/2019-holiday-gadget-gift-guide/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;2019 Holiday Gadget Gift Guide&#8221;</span></a></p>

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2019 Holiday Gadget Gift Guide. Categories - Tech Gadgets, Video Games. Date-Posted - 2019-11-26T18:55:38 . Most of my recommendations from the 2017 &amp; 2018 Holiday Gadget Gift Guides still hold. For 2019, I decided to focus on what changed from the past few years. Notebook: MSI GS75 Stealth I am a huge fan for MSI. My recommendations this year are the MSI GS75 Stealth. It’s incredibly powerful with a 144Hz 3ms screen, i9-9880H processor, Nvidia RTX 2080 Max-Q with 8Gb of GDDR6, and a 1TB NVMe SSD. It’s incredibly light at 4.96 pounds for a 17” screen! (Note that I bought a version with 4Tb of SSD, but that might be overkill for most.) In the past I opted for the 15” version, but this year I switched to the 17” version. I prefer the larger screen to work and play on when I am traveling, and it has a much longer battery life. If you are size constrained the 15” version (the MSI GS65 Stealth) is also a great option and only weighs 4.19 pounds. Drone: Skydio 2 I own the Mavic 2 Zoom and it’s amazing. It works in high winds, so it’s the only drone you can use to record kite surfing, but it needs to be piloted. The Active Track function is primitive, and the drone loses you easily, even without obstacles. Last year I bought the Skydio R1 but could not quite recommend it. It was super expensive, noisy, battery life was limited, and it still lost you relatively often. Also, it could only follow you and could not be flown, so it only had 1 real use case. That said the fact that you could basically launch and forget it really impressed me.&nbsp; Enter the Skydio 2: it’s 50% quieter, has a much higher quality camera, high speed and battery life while being much cheaper at $999. You can also fly it and given its collision avoidance it does not require an experienced pilot. It can navigate regions with obstacles very effectively on its own while you simply tell it to go forward.&nbsp; Here is a video I took this September heliskiing in Chile captured by my Skydio R1. I am looking forward to really putting the Skydio 2 through its paces in January and February for my next heliskiing trips in Canada. This time there will be tight trees so it will be a lot more challenging for it.&nbsp; Video Games: Call of Duty Modern Warfare, Gears 5, Star Wars Jedi: Fallen Order, StarCraft 2 and Unity of Command 2 I had not played Call of Duty in many years as I had tired of the formula and the ever less realistic direction they were going in. The latest installment is a return to form and after years of hiatus, it was fun to scratch my first-person shooter itch. I also love the fact that the campaign has a multiplayer coop mode.&nbsp; I love third-person action adventure games. This year there are two great entrees in the genre: Gears 5 and Fallen Order. Gears 5does not have the minute controls of the Drake Unchartered or Tomb Raider games but is super fun to play especially as it’s the only third person adventure game with a multiplayer coop campaign (which is the only way I play the game). Fallen Order is an interesting hybrid between the Dark Soul and Unchartered games with a fun mix of exploration, combat and puzzle solving within the context of a super engaging single player campaign.&nbsp; You might be surprised by my recommendation of StarCraft 2, which is a decade old. However, I had never really tried the game when it came out. I had finally tired of Company of Heroes 2 and was disappointed by the recent entries in the real time strategy genre. As StarCraft 2 was now free to play I decided to give it a real shot. I was shocked by how well balanced and nuanced the game is and immediately took to it. I am now a Diamond-level Zerg player despite being a newcomer and beginner to the game and am looking forward to having a lot of fun with the game for the foreseeable future. (Note that for RTS games I don’t play the campaigns and only play online multiplayer on the ladder.) Unity of Command 2 is the best turn-based strategy game in years. I was a fan of Panzer General back in the day and am excited to be revisiting the genre. It has great gameplay, is beautiful (for the genre) and is fun and challenging, while being accessible for those new to the genre.&nbsp; eReader: The new Kindle Oasis 2019 In the past I always recommended the Kindle Paperwhite. It’s a much better value at $129.99 vs. the Oasis’ $249.99. Given how much I read (50-100 books per year), I thought it was worth splurging and trying the Oasis out. It was the right call. I am loving that the screen is 1” larger at 7”, that you can color adjust the integrated light, that it’s light, quick and fully waterproof. It’s the best e-reader on the market.&nbsp; If money is no object, it’s the e-reader to get.

2019-11-19T21:13:53

2019-11-19T21:13:53

https://fabricegrinda.com/?p=9939

2021-05-28T06:54:31

2021-05-28T06:54:31

web-summit-panel-the-new-marketplaces

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https://fabricegrinda.com/web-summit-panel-the-new-marketplaces/

Web Summit Panel: The New Marketplaces

<figure class="wp-block-embed is-type-video is-provider-vimeo wp-block-embed-vimeo wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper"> <iframe loading="lazy" title="The new marketplaces" src="https://player.vimeo.com/video/371786330?dnt=1&amp;app_id=122963" width="840" height="473" frameborder="0" allow="autoplay; fullscreen" allowfullscreen></iframe> </div></figure> <p>Courtesy of Web Summit</p>

<p>Courtesy of Web Summit</p>

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Web Summit Panel: The New Marketplaces. Categories - Marketplaces, Panels &amp; Roundtable Discussions. Date-Posted - 2019-11-19T21:13:53 . Courtesy of Web Summit

2019-11-14T14:00:43

2019-11-14T14:00:43

https://fabricegrinda.com/?p=9930

2021-05-28T06:54:53

2021-05-28T06:54:53

web-summit-panel-ideas-are-easy-business-is-hard

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https://fabricegrinda.com/web-summit-panel-ideas-are-easy-business-is-hard/

Web Summit Panel : Ideas are easy, business is hard

<figure class="wp-block-embed is-type-video is-provider-vimeo wp-block-embed-vimeo wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper"> <iframe loading="lazy" title="Ideas are easy, business is hard" src="https://player.vimeo.com/video/371378768?dnt=1&amp;app_id=122963" width="840" height="473" frameborder="0" allow="autoplay; fullscreen" allowfullscreen></iframe> </div></figure> <p><em>Courtesy of Web Summit</em></p>

<p>Courtesy of Web Summit</p>

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Web Summit Panel : Ideas are easy, business is hard. Categories - Entrepreneurship, Panels &amp; Roundtable Discussions. Date-Posted - 2019-11-14T14:00:43 . Courtesy of Web Summit

2019-10-09T15:11:14

2019-10-09T15:11:14

https://fabricegrinda.com/?p=9918

2021-05-28T06:55:49

2021-05-28T06:55:49

interview-in-les-echos-in-french-tech-will-make-the-world-a-better-place

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Interview in Les Echos (in French): Tech will make the World a Better Place

<p>Two weeks ago, I had the pleasure of hosting a salon dinner with members of <a rel="noreferrer noopener" aria-label="French Founders (opens in a new tab)" href="https://www.frenchfounders.com/" target="_blank">French Founders</a> prior to giving a keynote on the state and future of technology. It became quickly apparent that I was way more optimistic than most about the future of technology and humanity on every topic imaginable, especially climate change. I was seated next to <a rel="noreferrer noopener" aria-label="Guillaume Bregeras (opens in a new tab)" href="https://www.lesechos.fr/@guillaume-bregeras" target="_blank">Guillaume Bregeras</a> of <a rel="noreferrer noopener" aria-label="Les Echos (opens in a new tab)" href="https://www.lesechos.fr/" target="_blank">Les Echos</a> who thought my perspective was interesting and interviewed me post my keynote. I am recreating the article. </p> <p><strong>GUILLAUME BREGERAS</strong><br><a rel="noreferrer noopener" aria-label="Original article (opens in a new tab)" href="https://business.lesechos.fr/entrepreneurs/communaute/0601966857504-fabrice-grinda-rien-ne-peut-affecter-la-croissance-de-la-tech-sur-le-long-terme-332092.php" target="_blank">Original article </a></p> <figure class="wp-block-image"><img loading="lazy" decoding="async" width="1000" height="533" src="https://fabricegrinda.com/wp-content/uploads/2019/10/332094_fabrice-grinda-rien-ne-peut-affecter-la-croissance-de-la-tech-sur-le-long-terme-web-tete-0601971858653_1000x533.jpg" alt="" class="wp-image-9919"/></figure> <h2 class="wp-block-heading">Ce business angel poids lourd investit de plus en plus dans les start-up françaises avec son fonds FJ Labs. Les « Echos » ont rencontré ce Français basé à New&nbsp;York qui reste très optimiste sur la capacité de la Tech à améliorer le monde.</h2> <p>L&#8217;exaltation est à son comble. Sur la scène du Transatlantic Leaders Forum à New&nbsp;York organisé fin septembre par le réseau&nbsp;&nbsp;<a rel="noreferrer noopener" href="https://business.lesechos.fr/entrepreneurs/communaute/0301546204816-frenchfounders-veut-etendre-son-outil-a-d-autres-communautes-320183.php" target="_blank">FrenchFounders</a>&nbsp;, Bertrand Picard, Luc Julia, Paul Graham et&nbsp;<strong>Fabrice Grinda</strong>&nbsp;viennent de se succéder. En coulisse, chacun d&#8217;entre eux est courtisé par les startuppeurs qui tentent de glaner au passage un conseil pour leur entreprise. Fabrice Grinda, l&#8217;entrepreneur et investisseur français (consacré&nbsp;<strong>premier business angel au monde par «&nbsp;Forbes&nbsp;» avec 545 investissements</strong>), accorde aux «&nbsp;Echos&nbsp;» une interview dans laquelle il aborde les secteurs qu&#8217;il privilégie pour investir, l&#8217;évolution de l&#8217;humanité et pourquoi il a choisi de ne&nbsp;<strong>vivre qu&#8217;avec moins de cent objets</strong>.</p> <p><strong><em>Pourquoi investissez-vous plus en France ?</em></strong></p> <p>Je suis opportuniste et je n&#8217;ai pas de règle géographique. Il s&#8217;avère que depuis deux ans, mon deal flow en France et l&#8217;écosystème français se sont nettement améliorés. Cela converge avec les mesures prises par le gouvernement en faveur de l&#8217;entrepreneuriat, ce qui explique nos&nbsp;&nbsp;<a rel="noreferrer noopener" href="https://business.lesechos.fr/entrepreneurs/financer-sa-creation/0601422487615-meero-decryptage-d-une-levee-record-a-230-millions-de-dollars-329987.php" target="_blank">récents investissements dans Meero</a>&nbsp;,&nbsp;&nbsp;<a rel="noreferrer noopener" href="https://business.lesechos.fr/entrepreneurs/actu/0601823502485-comet-retrouve-la-croissance-apres-une-annee-tempetueuse-331429.php" target="_blank">Comet</a>&nbsp;,&nbsp;&nbsp;<a rel="noreferrer noopener" href="https://business.lesechos.fr/entrepreneurs/actu/0302178585845-equimov-little-worker-ihou-le-startup-sum-up-35-322996.php" target="_blank">Little Worker</a>&nbsp;,&nbsp;&nbsp;<a rel="noreferrer noopener" href="https://business.lesechos.fr/entrepreneurs/management/fausse-bonne-idee-la-start-up-popchef-teste-les-vacances-illimitees-309917.php" target="_blank">PopChef</a>&nbsp;ou&nbsp;<strong>Urgence Docteurs</strong>.</p> <p><strong><em>Considérez-vous un retour en France ?</em></strong></p> <p>Je me sens chez moi à New York avec une vie sociale, artistique et intellectuelle qui me stimule davantage qu&#8217;à Paris. Ici, j&#8217;organise plus facilement des dîners où se mélangent des personnalités pour débattre de l&#8217;avenir de la religion, de l&#8217;humanité dans un monde post-singularité ou de l&#8217;éthique.</p> <p><strong><em>Comment analysez-vous les tensions sur la valorisation de la Tech, avec l&#8217;exemple de WeWork ?</em></strong></p> <p>Beaucoup d&#8217;investisseurs n&#8217;ont pas réfléchit sur la nature Tech de ces entreprises.&nbsp;<strong>WeWork</strong>&nbsp;est très visible, mais n&#8217;est-elle finalement pas qu&#8217;une société d&#8217;immobilier avec quelques éléments tech&nbsp;? Ces entreprises étaient valorisées selon les critères des entreprises Tech, alors qu&#8217;elles ne le sont pas, et le retour de bâton est dur.</p> <p><strong><em>Quels sont les sujets qui vous attirent en tant qu&#8217;investisseur ?</em></strong></p> <p>Je décline actuellement trois thèses d&#8217;investissement autour des&nbsp;<strong>places de marché</strong>&nbsp;: on verticalise par exemple eBay avec une market place de guitare. Cela peut paraître une petite niche, mais c&#8217;est un marché de 800 millions de dollars par an. On verticalise également UberEats avec une boite de commande de pizzas qui génère 400&nbsp;millions de dollars par an. Ensuite, nous investissons dans des places de marché qui choisissent le fournisseur pour le client final. C&#8217;est une nouvelle tendance que démontre&nbsp;&nbsp;<a rel="noreferrer noopener" href="https://business.lesechos.fr/entrepreneurs/financer-sa-creation/0601408666783-thomas-rebaud-meero-je-leve-230-millions-de-dollars-pour-disrupter-le-monde-de-la-photographie-329986.php" target="_blank">Meero</a>&nbsp;par exemple, qui choisit le photographe pour le client final car il sait optimiser sa sélection. La troisième tendance est la place de marché BtoB où le manque de transparence et le faible taux de digitalisation créent de nombreuses opportunités.</p> <p><strong><em>Comment les turbulences économiques et géopolitiques peuvent-elles affecter la croissance de la Tech ?</em></strong></p> <p>Sur le long terme, cela n&#8217;aura aucun impact. Sur les cent dernières années, malgré la grande dépression et les guerres mondiales, elle n&#8217;a pas été affectée. La qualité de vie n&#8217;est évidemment pas bonne durant ces événements, mais l&#8217;effet séculaire et macro de la tech améliore la qualité de vie des gens. Beaucoup de personnes se focalisent sur l&#8217;inégalité des revenus, mais si l&#8217;on regarde la mortalité infantile, l&#8217;espérance de vie où le nombre de jours de congés, tous les grands indicateurs se sont significativement améliorés. Mais tout n&#8217;est évidemment pas parfait. La tech évolue plus vite que nos systèmes politiques, le système éducatif n&#8217;est pas adapté aux emplois de demain, l&#8217;accès aux opportunités est très inégal en fonction de son lieu de naissance, et la mobilité sociale et géographique a baissé.</p> <p><strong><em>Comment expliquez-vous la friction entre les populations ?</em></strong></p> <p>Les gens ne se rendent pas compte de l&#8217;<strong>amélioration du niveau de vie</strong>, ne serait-ce que depuis 20&nbsp;ans, et du privilège que constitue le fait de vivre en Occident. Nous ne sommes pas construits autour d&#8217;une approche de&nbsp;&nbsp;<a rel="noreferrer noopener" href="https://business.lesechos.fr/entrepreneurs/management/cinq-attitudes-positives-pour-reussir-ce-que-vous-entreprenez-300572.php" target="_blank">gratitude</a>&nbsp;, d&#8217;autant que l&#8217;information en continu nous donne l&#8217;impression que tout va mal à tout instant. L&#8217;amygdale de notre cerveau nous sensibilise à l&#8217;information négative car il y a 50.000&nbsp;ans, lorsque nous étions dans la savane, il fallait être attentif aux dangers immédiats des prédateurs. Si ce monde n&#8217;existe plus, nous sommes toujours accrocs à ce type d&#8217;information.</p> <blockquote class="wp-block-quote"><span>Les chiffres clefsC&#8217;est le nombre de start-up dans lesquelles Fabrice Grinda a investi qui ont été vendues ou sont entrées en bourse. Il revendique un TRI (taux de rentabilité interne) de 60%.dans lesquelles l&#8217;investisseur a injecté des fonds, dont&nbsp;42 françaises (Meero,&nbsp; Privateaser ou VideDressing&#8230;)</span></blockquote> <p><em><strong>Les entreprises Tech survendent leur capacité à créer un monde meilleur. Croyez-vous dans leur capacité à améliorer les choses ?</strong></em></p> <p>Absolument ! Notamment si l&#8217;on se pose la question des grands problèmes auxquels on fait face, comme l&#8217;augmentation du CO2 dans l&#8217;atmosphère. Le prix de l&#8217;énergie solaire baisse et sa productivité augmente chaque année depuis 40&nbsp;ans. Dans plusieurs régions du monde, elle constitue déjà une alternative économiquement plus intéressante pour produire de l&#8217;électricité, et le coût du mégawatt sera bientôt tellement faible que l&#8217;on pourra régler beaucoup d&#8217;autres problèmes, comme la désalinisation de l&#8217;eau. Il y a par exemple aujourd&#8217;hui une start-up qui transforme l&#8217;humidité de l&#8217;atmosphère pour créer de l&#8217;eau potable. Une autre qui travaille sur le génome de la plante lui permettant de consommer dix fois plus de CO2 qu&#8217;une plante traditionnelle, tout en ayant des racines plus profondes pour éviter qu&#8217;elle ne le relâche dans l&#8217;atmosphère une fois qu&#8217;elle meurt. Notre avenir est magnifique pour les quinze prochaines années.</p> <p><strong><em>Il y a quelques années, vous avez décidé de ne plus rien posséder. Pourquoi ce choix radical ?</em></strong></p> <p>C&#8217;est une question d&#8217;allocation de temps. Lorsque vous détenez quelque chose, cela engendre du travail supplémentaire. J&#8217;avais une maison, un appartement, une voiture et le nombre d&#8217;heures passées chaque mois à les entretenir, à gérer l&#8217;aspect administratif n&#8217;avait plus de sens car il&nbsp;<strong>diminuait la qualité du temps passé avec mes amis</strong>. C&#8217;est un processus itératif et désormais je loge dans des Airbnb, et je vie avec moins de 100&nbsp;objets.</p> <blockquote class="wp-block-quote"><span>Les dates clés<br><strong>1974</strong>&nbsp;Naissance à Boulogne-Billancourt (92)&nbsp;<strong>1996</strong>&nbsp;Diplômé de Princeton et reçoit le prix de la meilleure thèse en économie. Il fonde sa première entreprise, International Computers.&nbsp;<strong>1998</strong>&nbsp;Cofonde et dirige Aucland, un site d&#8217;enchères qui s&#8217;inspire d&#8217;eBay.&nbsp;<strong>2002</strong>&nbsp;Fonde et dirige Zingy, une start-up spécialisée dans les jeux et sonneries pour mobiles, qu&#8217;il revend deux ans plus tard à ForSide pour 80&nbsp;millions de dollars.&nbsp;<strong>2006</strong>&nbsp;cofonde OLX, un site de petites annonces locales racheté par Naspers en&nbsp;2010 pour 189 millions de dollars.&nbsp;<strong>2014</strong>&nbsp;Vend toutes ses propriétés et ses biens pour retrouver une qualité de relation avec ses amis.</span></blockquote> <blockquote class="wp-block-quote"><span>À noterFabrice Grinda lit une centaine d&#8217;ouvrage par an. Le dernier à l&#8217;avoir marqué est «&nbsp;Why We Sleep&nbsp;» de Matthew Walker. Selon lui, il lui a permis de revoir radicalement son rapport au sommeil.</span></blockquote>

<p>Two weeks ago, I had the pleasure of hosting a salon dinner with members of French Founders prior &hellip; <a href="https://fabricegrinda.com/interview-in-les-echos-in-french-tech-will-make-the-world-a-better-place/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;Interview in Les Echos (in French): Tech will make the World a Better Place&#8221;</span></a></p>

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Interview in Les Echos (in French): Tech will make the World a Better Place. Categories - Entrepreneurship, Interesting Articles, Political Economy. Date-Posted - 2019-10-09T15:11:14 . Two weeks ago, I had the pleasure of hosting a salon dinner with members of French Founders prior to giving a keynote on the state and future of technology. It became quickly apparent that I was way more optimistic than most about the future of technology and humanity on every topic imaginable, especially climate change. I was seated next to Guillaume Bregeras of Les Echos who thought my perspective was interesting and interviewed me post my keynote. I am recreating the article. GUILLAUME BREGERASOriginal article Ce business angel poids lourd investit de plus en plus dans les start-up françaises avec son fonds FJ Labs. Les « Echos » ont rencontré ce Français basé à New&nbsp;York qui reste très optimiste sur la capacité de la Tech à améliorer le monde. L&#8217;exaltation est à son comble. Sur la scène du Transatlantic Leaders Forum à New&nbsp;York organisé fin septembre par le réseau&nbsp;&nbsp;FrenchFounders&nbsp;, Bertrand Picard, Luc Julia, Paul Graham et&nbsp;Fabrice Grinda&nbsp;viennent de se succéder. En coulisse, chacun d&#8217;entre eux est courtisé par les startuppeurs qui tentent de glaner au passage un conseil pour leur entreprise. Fabrice Grinda, l&#8217;entrepreneur et investisseur français (consacré&nbsp;premier business angel au monde par «&nbsp;Forbes&nbsp;» avec 545 investissements), accorde aux «&nbsp;Echos&nbsp;» une interview dans laquelle il aborde les secteurs qu&#8217;il privilégie pour investir, l&#8217;évolution de l&#8217;humanité et pourquoi il a choisi de ne&nbsp;vivre qu&#8217;avec moins de cent objets. Pourquoi investissez-vous plus en France ? Je suis opportuniste et je n&#8217;ai pas de règle géographique. Il s&#8217;avère que depuis deux ans, mon deal flow en France et l&#8217;écosystème français se sont nettement améliorés. Cela converge avec les mesures prises par le gouvernement en faveur de l&#8217;entrepreneuriat, ce qui explique nos&nbsp;&nbsp;récents investissements dans Meero&nbsp;,&nbsp;&nbsp;Comet&nbsp;,&nbsp;&nbsp;Little Worker&nbsp;,&nbsp;&nbsp;PopChef&nbsp;ou&nbsp;Urgence Docteurs. Considérez-vous un retour en France ? Je me sens chez moi à New York avec une vie sociale, artistique et intellectuelle qui me stimule davantage qu&#8217;à Paris. Ici, j&#8217;organise plus facilement des dîners où se mélangent des personnalités pour débattre de l&#8217;avenir de la religion, de l&#8217;humanité dans un monde post-singularité ou de l&#8217;éthique. Comment analysez-vous les tensions sur la valorisation de la Tech, avec l&#8217;exemple de WeWork ? Beaucoup d&#8217;investisseurs n&#8217;ont pas réfléchit sur la nature Tech de ces entreprises.&nbsp;WeWork&nbsp;est très visible, mais n&#8217;est-elle finalement pas qu&#8217;une société d&#8217;immobilier avec quelques éléments tech&nbsp;? Ces entreprises étaient valorisées selon les critères des entreprises Tech, alors qu&#8217;elles ne le sont pas, et le retour de bâton est dur. Quels sont les sujets qui vous attirent en tant qu&#8217;investisseur ? Je décline actuellement trois thèses d&#8217;investissement autour des&nbsp;places de marché&nbsp;: on verticalise par exemple eBay avec une market place de guitare. Cela peut paraître une petite niche, mais c&#8217;est un marché de 800 millions de dollars par an. On verticalise également UberEats avec une boite de commande de pizzas qui génère 400&nbsp;millions de dollars par an. Ensuite, nous investissons dans des places de marché qui choisissent le fournisseur pour le client final. C&#8217;est une nouvelle tendance que démontre&nbsp;&nbsp;Meero&nbsp;par exemple, qui choisit le photographe pour le client final car il sait optimiser sa sélection. La troisième tendance est la place de marché BtoB où le manque de transparence et le faible taux de digitalisation créent de nombreuses opportunités. Comment les turbulences économiques et géopolitiques peuvent-elles affecter la croissance de la Tech ? Sur le long terme, cela n&#8217;aura aucun impact. Sur les cent dernières années, malgré la grande dépression et les guerres mondiales, elle n&#8217;a pas été affectée. La qualité de vie n&#8217;est évidemment pas bonne durant ces événements, mais l&#8217;effet séculaire et macro de la tech améliore la qualité de vie des gens. Beaucoup de personnes se focalisent sur l&#8217;inégalité des revenus, mais si l&#8217;on regarde la mortalité infantile, l&#8217;espérance de vie où le nombre de jours de congés, tous les grands indicateurs se sont significativement améliorés. Mais tout n&#8217;est évidemment pas parfait. La tech évolue plus vite que nos systèmes politiques, le système éducatif n&#8217;est pas adapté aux emplois de demain, l&#8217;accès aux opportunités est très inégal en fonction de son lieu de naissance, et la mobilité sociale et géographique a baissé. Comment expliquez-vous la friction entre les populations ? Les gens ne se rendent pas compte de l&#8217;amélioration du niveau de vie, ne serait-ce que depuis 20&nbsp;ans, et du privilège que constitue le fait de vivre en Occident. Nous ne sommes pas construits autour d&#8217;une approche de&nbsp;&nbsp;gratitude&nbsp;, d&#8217;autant que l&#8217;information en continu nous donne l&#8217;impression que tout va mal à tout instant. L&#8217;amygdale de notre cerveau nous sensibilise à l&#8217;information négative car il y a 50.000&nbsp;ans, lorsque nous étions dans la savane, il fallait être attentif aux dangers immédiats des prédateurs. Si ce monde n&#8217;existe plus, nous sommes toujours accrocs à ce type d&#8217;information. Les chiffres clefsC&#8217;est le nombre de start-up dans lesquelles Fabrice Grinda a investi qui ont été vendues ou sont entrées en bourse. Il revendique un TRI (taux de rentabilité interne) de 60%.dans lesquelles l&#8217;investisseur a injecté des fonds, dont&nbsp;42 françaises (Meero,&nbsp; Privateaser ou VideDressing&#8230;) Les entreprises Tech survendent leur capacité à créer un monde meilleur. Croyez-vous dans leur capacité à améliorer les choses ? Absolument ! Notamment si l&#8217;on se pose la question des grands problèmes auxquels on fait face, comme l&#8217;augmentation du CO2 dans l&#8217;atmosphère. Le prix de l&#8217;énergie solaire baisse et sa productivité augmente chaque année depuis 40&nbsp;ans. Dans plusieurs régions du monde, elle constitue déjà une alternative économiquement plus intéressante pour produire de l&#8217;électricité, et le coût du mégawatt sera bientôt tellement faible que l&#8217;on pourra régler beaucoup d&#8217;autres problèmes, comme la désalinisation de l&#8217;eau. Il y a par exemple aujourd&#8217;hui une start-up qui transforme l&#8217;humidité de l&#8217;atmosphère pour créer de l&#8217;eau potable. Une autre qui travaille sur le génome de la plante lui permettant de consommer dix fois plus de CO2 qu&#8217;une plante traditionnelle, tout en ayant des racines plus profondes pour éviter qu&#8217;elle ne le relâche dans l&#8217;atmosphère une fois qu&#8217;elle meurt. Notre avenir est magnifique pour les quinze prochaines années. Il y a quelques années, vous avez décidé de ne plus rien posséder. Pourquoi ce choix radical ? C&#8217;est une question d&#8217;allocation de temps. Lorsque vous détenez quelque chose, cela engendre du travail supplémentaire. J&#8217;avais une maison, un appartement, une voiture et le nombre d&#8217;heures passées chaque mois à les entretenir, à gérer l&#8217;aspect administratif n&#8217;avait plus de sens car il&nbsp;diminuait la qualité du temps passé avec mes amis. C&#8217;est un processus itératif et désormais je loge dans des Airbnb, et je vie avec moins de 100&nbsp;objets. Les dates clés1974&nbsp;Naissance à Boulogne-Billancourt (92)&nbsp;1996&nbsp;Diplômé de Princeton et reçoit le prix de la meilleure thèse en économie. Il fonde sa première entreprise, International Computers.&nbsp;1998&nbsp;Cofonde et dirige Aucland, un site d&#8217;enchères qui s&#8217;inspire d&#8217;eBay.&nbsp;2002&nbsp;Fonde et dirige Zingy, une start-up spécialisée dans les jeux et sonneries pour mobiles, qu&#8217;il revend deux ans plus tard à ForSide pour 80&nbsp;millions de dollars.&nbsp;2006&nbsp;cofonde OLX, un site de petites annonces locales racheté par Naspers en&nbsp;2010 pour 189 millions de dollars.&nbsp;2014&nbsp;Vend toutes ses propriétés et ses biens pour retrouver une qualité de relation avec ses amis. À noterFabrice Grinda lit une centaine d&#8217;ouvrage par an. Le dernier à l&#8217;avoir marqué est «&nbsp;Why We Sleep&nbsp;» de Matthew Walker. Selon lui, il lui a permis de revoir radicalement son rapport au sommeil.

2019-10-03T14:51:55

2019-10-03T14:51:55

https://fabricegrinda.com/?p=9901

2021-05-28T06:56:08

2021-05-28T06:56:08

origins-podcast

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Origins Podcast

<p>We discuss coming to the U.S. for college, founding three companies (Aucland, Zingy, OLX), as well as starting and raising capital for FJ Labs, and how to live “asset-light.”</p> <p></p> <figure><iframe src="https://open.spotify.com/embed-podcast/episode/5mCU9DLg1RHfm3mkAZAe5Y" width="100%"></iframe></figure> <p></p> <ul><li><a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://bitly.com/OriginsPodcast" target="_blank">SUBSCRIBE ON ITUNES</a></li><li><a rel="noreferrer noopener" aria-label="LISTEN ON SPOTIFY (opens in a new tab)" href="https://open.spotify.com/show/23H0tOX63xMChV2SErQKnZ?si=UhKBUzRwTMyw5MldjEEcCw" target="_blank">LISTEN ON SPOTIFY</a></li><li><a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://play.google.com/music/m/I4z2oewtdqy4i7tahrov3lxvd4y?t=Origins_-_A_podcast_about_Limited_Partners_created_by_Notation_Capital" target="_blank">LISTEN ON GOOGLE PLAY</a></li><li><a href="https://soundcloud.com/notation-capital" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">LISTEN ON SOUNDCLOUD</a></li></ul>

<p>We discuss coming to the U.S. for college, founding three companies (Aucland, Zingy, OLX), as well as starting &hellip; <a href="https://fabricegrinda.com/origins-podcast/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;Origins Podcast&#8221;</span></a></p>

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Origins Podcast. Categories - Entrepreneurship, Interviews &amp; Fireside Chats. Date-Posted - 2019-10-03T14:51:55 . We discuss coming to the U.S. for college, founding three companies (Aucland, Zingy, OLX), as well as starting and raising capital for FJ Labs, and how to live “asset-light.” SUBSCRIBE ON ITUNESLISTEN ON SPOTIFYLISTEN ON GOOGLE PLAYLISTEN ON SOUNDCLOUD

2019-09-03T15:11:23

2019-09-03T15:11:23

https://fabricegrinda.com/?p=9884

2021-05-28T06:56:37

2021-05-28T06:56:37

the-latest-trend-in-marketplaces

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The latest trend in marketplaces

<p>I am attaching the slides I prepared as support for my <a href="https://fabricegrinda.com/noah-keynote-marketplaces-the-party-is-not-over/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Noah Keynote: Marketplaces: The Party is not Over!</a> It presents our current evaluation criteria and investment thesis as well as the latest trends in food, real estate, cars, jobs, home services, and lending marketplaces.</p> <div id="wppdfemb-frame-container-13690"><iframe id="wppdf-emb-iframe-13690" scrolling="no" data-pdf-index="5" class="pdfembed-iframe nonfullscreen" style="border: none; width:100%; max-width: 100%; min-height: 1000px;" src="https://fabricegrinda.com?pdfID=13690&#038;url=https%3A%2F%2Ffabricegrinda.com%2Fwp-content%2Fuploads%2F2019%2F09%2FThe-latest-trend-in-marketplaces.pdf&#038;index=5" ></iframe></div> <p></p>

<p>I am attaching the slides I prepared as support for my Noah Keynote: Marketplaces: The Party is not &hellip; <a href="https://fabricegrinda.com/the-latest-trend-in-marketplaces/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;The latest trend in marketplaces&#8221;</span></a></p>

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The latest trend in marketplaces. Categories - Entrepreneurship, Marketplaces. Date-Posted - 2019-09-03T15:11:23 . I am attaching the slides I prepared as support for my Noah Keynote: Marketplaces: The Party is not Over! It presents our current evaluation criteria and investment thesis as well as the latest trends in food, real estate, cars, jobs, home services, and lending marketplaces.

2019-08-23T18:28:30

2019-08-23T18:28:30

https://fabricegrinda.com/?p=9868

2021-05-28T06:57:39

2021-05-28T06:57:39

avoid-death-in-the-desert-75-packing-list-essentials-for-burning-man

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Avoid Death in the Desert: 75 Packing List Essentials for Burning Man

<p>As Burning Man is upon us, I wanted to share with all of you a packing list to make sure you don’t forget anything. A good friend of mine prepared this list for my first burn and I have been using it ever since.</p> <p>Some items may not be needed depending on your plan especially if you are in an RV. If you are going the ultimate radical self-reliance route of self-camping, as I do, you must also bring your own food and water. Here are a <a href="https://burningman.org/event/preparation/playa-living/water/" target="_blank" rel="noreferrer noopener" aria-label="few options for sourcing water (opens in a new tab)">few options for sourcing water</a>. If you come with the <a rel="noreferrer noopener" aria-label="Burner Express (opens in a new tab)" href="https://burnerexpress.burningman.org/burner-express-bus-information/" target="_blank">Burner Express</a>, you can simply add the water add-on option.<br><br><strong>Camping</strong></p> <figure class="wp-block-table"><table><tbody><tr><td> Sleeping bag &amp; pillow </td></tr><tr><td> Water bottle </td></tr><tr><td> Warmer blanket </td></tr><tr><td> Tent light decorations </td></tr><tr><td> Eye mask (to sleep in tent during the day) </td></tr><tr><td> Ear plugs </td></tr><tr><td> Cup for drinks at camps </td></tr><tr><td> Hand towel + towel </td></tr><tr><td> Portable phone charger </td></tr><tr><td> Mirror (costumes/fun face things) </td></tr><tr><td> Lantern </td></tr><tr><td> Big Ziplocs (to seal your post-burn clothes) </td></tr><tr><td> Trash bags (take your trash out with you) </td></tr><tr><td> Stakes (keep tent from blowing away) </td></tr><tr><td> Bungee cords (for tent) </td></tr><tr><td> Tarp (underneath/on top of tent &#8211; dust) </td></tr><tr><td> Electrolyte stuff </td></tr></tbody></table></figure> <p><strong>Venturing</strong></p> <figure class="wp-block-table"><table><tbody><tr><td> Backpack&nbsp; </td></tr><tr><td> Bike lock </td></tr><tr><td> Camelback </td></tr><tr><td> Tissues </td></tr><tr><td> Goggles </td></tr><tr><td> Sunglasses </td></tr><tr><td> Scarf (warmth) </td></tr><tr><td> Bandana (dust mask) </td></tr><tr><td> Cheap indestructible watch </td></tr><tr><td> Headlamp </td></tr><tr><td> Batteries </td></tr><tr><td> Lights for bike (functional, decoration) </td></tr></tbody></table></figure> <p><strong>Partying</strong></p> <figure class="wp-block-table"><table><tbody><tr><td> Lights for self (don&#8217;t get run over) </td></tr><tr><td> Vitamins </td></tr><tr><td> Face paint/face jewels </td></tr><tr><td> A gift to offer </td></tr></tbody></table></figure> <p><strong>Toiletries</strong></p> <figure class="wp-block-table"><table><tbody><tr><td> Wet Wipes (dust) </td></tr><tr><td> Face Wipes </td></tr><tr><td> Toothbrush </td></tr><tr><td> Toothpaste </td></tr><tr><td> Hand sanitizer </td></tr><tr><td> Deodorant </td></tr><tr><td> Dry shampoo </td></tr><tr><td> Sunscreen </td></tr><tr><td> Face Wash </td></tr><tr><td> Small body wash </td></tr><tr><td> Brush </td></tr><tr><td> Hair ties &amp; bobbies </td></tr><tr><td> Rx meds </td></tr><tr><td> Other meds (stomach, Advil, **nose spray**) </td></tr><tr><td> Makeup remover &amp; cloth balls </td></tr><tr><td> **Eye drops** </td></tr><tr><td> Toilet paper </td></tr></tbody></table></figure> <p><strong>Clothing</strong></p> <figure class="wp-block-table"><table><tbody><tr><td> Warm sleep clothing </td></tr><tr><td> Warm coat </td></tr><tr><td> Mid layer </td></tr><tr><td> Night outfits (warm) </td></tr><tr><td> Day outfits (sun) </td></tr><tr><td> Chill non-costumes e.g. linen pants </td></tr><tr><td> Jewelry/head pieces/fun accessories </td></tr><tr><td> Flip flops/sandals (around camp) </td></tr><tr><td> Boots </td></tr><tr><td> Bag for dirty clothes (dust) </td></tr><tr><td> Lots of socks </td></tr><tr><td> Hats </td></tr><tr><td> Clean PJs, clothes for plane/hotel for hotel (*seal* for after you leave) </td></tr></tbody></table></figure> <p><strong>Print/bring</strong></p> <figure class="wp-block-table"><table><tbody><tr><td> Bike rental receipt </td></tr><tr><td> Friends&#8217; camps list </td></tr><tr><td> Schedules (e.g.; iFeel cruise) </td></tr><tr><td> In/out transportation tickets </td></tr><tr><td> Camp volunteer schedule </td></tr></tbody></table></figure> <p><strong>Misc</strong></p> <figure class="wp-block-table"><table><tbody><tr><td> Cash for goodies </td></tr><tr><td> ID </td></tr><tr><td> Ticket </td></tr><tr><td> Safety pins </td></tr><tr><td> Band aids </td></tr><tr><td> Duct tape for bike light / zip ties </td></tr><tr><td> Scissors </td></tr></tbody></table></figure> <p>You can also find the <a href="https://drive.google.com/file/d/1zOnosPjmkIYw2aaeFy6JrRgNtnqDJgNF/view" target="_blank" rel="noreferrer noopener" aria-label="list formatted in Google Docs. (opens in a new tab)">list formatted in Google Docs.</a><br><br>A few tips:</p> <ul><li>*Do not forget your tickets* &#8211; somehow this happens, and they *will not let you in*</li><li>Prepare for not having phone service to access any info like flight details or friends&#8217; camp coordinates</li><li>Be prepared for the dust/dryness: goggles, bandana/face mask, wet wipes, nose spray, tissues, chap stick</li><li>Bring lights for yourself and your bike (+batteries and a way to attach the lights) &#8211; you can rent a bike to pick up on playa&nbsp;<a href="https://playabikerepair.com/products/burning-man-bike-rental" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">here</a></li><li>If you&#8217;re sleeping outside, a lantern for camp and lights for your tent are super helpful</li><li>Bring a portable cup if you want to drink at camps</li><li>Things like scissors, safety pins and duct tape come in handy</li><li>I&#8217;d recommend each having whatever you need individually in your backpacks (sunscreen, water bottle, lights&#8230;) in case you end up in a classic &#8220;I wandered off for a sec to see what those cool lights were at 11 pm and ended up following this awesome girl I met onto on an art car,&nbsp;headed to the other side of the playa and one thing led to another and now it&#8217;s 7am&#8221; situation 🙂</li></ul>

<p>As Burning Man is upon us, I wanted to share with all of you a packing list to &hellip; <a href="https://fabricegrinda.com/avoid-death-in-the-desert-75-packing-list-essentials-for-burning-man/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;Avoid Death in the Desert: 75 Packing List Essentials for Burning Man&#8221;</span></a></p>

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Avoid Death in the Desert: 75 Packing List Essentials for Burning Man. Categories - Personal Musings, Travels. Date-Posted - 2019-08-23T18:28:30 . As Burning Man is upon us, I wanted to share with all of you a packing list to make sure you don’t forget anything. A good friend of mine prepared this list for my first burn and I have been using it ever since. Some items may not be needed depending on your plan especially if you are in an RV. If you are going the ultimate radical self-reliance route of self-camping, as I do, you must also bring your own food and water. Here are a few options for sourcing water. If you come with the Burner Express, you can simply add the water add-on option.Camping Sleeping bag &amp; pillow Water bottle Warmer blanket Tent light decorations Eye mask (to sleep in tent during the day) Ear plugs Cup for drinks at camps Hand towel + towel Portable phone charger Mirror (costumes/fun face things) Lantern Big Ziplocs (to seal your post-burn clothes) Trash bags (take your trash out with you) Stakes (keep tent from blowing away) Bungee cords (for tent) Tarp (underneath/on top of tent &#8211; dust) Electrolyte stuff Venturing Backpack&nbsp; Bike lock Camelback Tissues Goggles Sunglasses Scarf (warmth) Bandana (dust mask) Cheap indestructible watch Headlamp Batteries Lights for bike (functional, decoration) Partying Lights for self (don&#8217;t get run over) Vitamins Face paint/face jewels A gift to offer Toiletries Wet Wipes (dust) Face Wipes Toothbrush Toothpaste Hand sanitizer Deodorant Dry shampoo Sunscreen Face Wash Small body wash Brush Hair ties &amp; bobbies Rx meds Other meds (stomach, Advil, **nose spray**) Makeup remover &amp; cloth balls **Eye drops** Toilet paper Clothing Warm sleep clothing Warm coat Mid layer Night outfits (warm) Day outfits (sun) Chill non-costumes e.g. linen pants Jewelry/head pieces/fun accessories Flip flops/sandals (around camp) Boots Bag for dirty clothes (dust) Lots of socks Hats Clean PJs, clothes for plane/hotel for hotel (*seal* for after you leave) Print/bring Bike rental receipt Friends&#8217; camps list Schedules (e.g.; iFeel cruise) In/out transportation tickets Camp volunteer schedule Misc Cash for goodies ID Ticket Safety pins Band aids Duct tape for bike light / zip ties Scissors You can also find the list formatted in Google Docs.A few tips: *Do not forget your tickets* &#8211; somehow this happens, and they *will not let you in*Prepare for not having phone service to access any info like flight details or friends&#8217; camp coordinatesBe prepared for the dust/dryness: goggles, bandana/face mask, wet wipes, nose spray, tissues, chap stickBring lights for yourself and your bike (+batteries and a way to attach the lights) &#8211; you can rent a bike to pick up on playa&nbsp;hereIf you&#8217;re sleeping outside, a lantern for camp and lights for your tent are super helpfulBring a portable cup if you want to drink at campsThings like scissors, safety pins and duct tape come in handyI&#8217;d recommend each having whatever you need individually in your backpacks (sunscreen, water bottle, lights&#8230;) in case you end up in a classic &#8220;I wandered off for a sec to see what those cool lights were at 11 pm and ended up following this awesome girl I met onto on an art car,&nbsp;headed to the other side of the playa and one thing led to another and now it&#8217;s 7am&#8221; situation 🙂

2019-08-16T16:04:48

2019-08-16T16:04:48

https://fabricegrinda.com/?p=9858

2021-05-28T06:58:11

2021-05-28T06:58:11

noah-keynote-marketplaces-the-party-is-not-over

publish

post

https://fabricegrinda.com/noah-keynote-marketplaces-the-party-is-not-over/

Noah Keynote: Marketplaces: The Party is not Over!

<p>It seems to come as a surprise to many, but we are only at the beginning of the marketplace revolution. This keynote presents our current thesis and the latest trends in food, real estate, cars, home services, labor and lending. The keynote is a bit rushed because they told me I had 15 minutes, but the timer only had 10 minutes and I had practiced for exactly a 15 minute delivery, but it presents our current thinking reasonably effectively.</p> <figure><iframe loading="lazy" src="https://www.youtube.com/embed/0H6Zvmtprn0" allowfullscreen="" width="840" height="472"></iframe></figure>

<p>It seems to come as a surprise to many, but we are only at the beginning of the &hellip; <a href="https://fabricegrinda.com/noah-keynote-marketplaces-the-party-is-not-over/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;Noah Keynote: Marketplaces: The Party is not Over!&#8221;</span></a></p>

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Noah Keynote: Marketplaces: The Party is not Over!. Categories - Entrepreneurship, Marketplaces, Speeches. Date-Posted - 2019-08-16T16:04:48 . It seems to come as a surprise to many, but we are only at the beginning of the marketplace revolution. This keynote presents our current thesis and the latest trends in food, real estate, cars, home services, labor and lending. The keynote is a bit rushed because they told me I had 15 minutes, but the timer only had 10 minutes and I had practiced for exactly a 15 minute delivery, but it presents our current thinking reasonably effectively.

2019-08-13T14:58:06

2019-08-13T14:58:06

https://fabricegrinda.com/?p=9834

2021-05-28T06:58:42

2021-05-28T06:58:42

founder-storiez-podcast

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post

https://fabricegrinda.com/founder-storiez-podcast/

Founder Storiez Podcast

<p>I had the pleasure of having a far reaching conversation with Ephraim Yarmak whom I had the pleasure to meet at a <a href="https://www.yjp.org/" target="_blank" rel="noreferrer noopener" aria-label="YJP (opens in a new tab)">YJP</a> event.</p> <figure><iframe loading="lazy" src="https://player.simplecast.com/a97beabb-adcd-40f9-8d37-d012f37c5613?dark=true" width="100%" height="200px"></iframe></figure> <p><a href="https://cdn.simplecast.com/audio/348656/348656b4-0f95-481d-892c-e845be7a5b10/a97beabb-adcd-40f9-8d37-d012f37c5613/Episode_34_Fabrice_Grinda_Founder_FJ_LABS_1_Angel_Investor_In_The_World_tc.mp3" target="_blank" rel="noreferrer noopener" aria-label="Download (opens in a new tab)">Download</a></p> <figure><iframe loading="lazy" src="https://www.youtube.com/embed/96chY4nBZOk" allowfullscreen="" width="924" height="520"></iframe></figure> <p><br>In this interview, we speak with&nbsp;Fabrice&nbsp;Grinda Founder FJ Labs</p> <p>Fabrice&nbsp;is a serial entrepreneur and life enthusiast. The companies he founded have raised $100s of Millions and he sold his companies for $100s of millions.&nbsp;</p> <p>He has an incredibly inspiring story of a shy kid from a small village in France to become the #1 Angel Investor in the world.&nbsp;</p> <p>He has invested in more than 400 startups and 150+ exits. He has invested in the likes of Alibaba, Airbnb, Knotel, Uber, Palantir &amp; many more.&nbsp;</p> <p>He has a great journey, and in this interview, we learn about his life and entrepreneurship &amp; Investor journey.&nbsp;</p> <p>Enjoy.&nbsp;<br><br><br><strong>About FounderStoriez.&nbsp;</strong></p> <p>FounderStoriez is a podcast that interviews entrepreneurs, investors, and people that are making a difference in the world and inspiring others.&nbsp;&nbsp;</p> <p>We interview and share their stories so we can learn from and implement into our own life.&nbsp;<br><br>0:00 &#8211; 0:56&nbsp; &nbsp; Welcoming notes&nbsp;</p> <p>0:58 &#8211; 3:20 &nbsp; &nbsp; Origin / Upbringing / Being the chosen one and spoiled / Shy &amp; introverted as a kid /&nbsp; Got the first computer at 10 and fell in love at first sight&nbsp;</p> <p>3:23 &#8211; 11:20&nbsp; &nbsp; How he was able to bring out his extroverted side / Went to Princeton / Always knew he wanted to be a tech entrepreneur / His first job after college was at Mckinsey / Learning EQ &amp; Social skills&nbsp; / After Mckinsey went ahead and launched his first startup / As a founder you are a salesperson and need to be able to storytelling / His unconventional unorthodox way of overcoming rejection and scoring a date&nbsp;</p> <p>11:21 &#8211; 15:29 &nbsp; &nbsp; Fear of failure / How to build up emotional resilience / Learn to fail early / Being flexible and not set on one path / Learning from your mistakes / Having humility&nbsp;</p> <p>15:30 &#8211; 18:39 &nbsp; &nbsp; His biggest failure / Choosing the wrong investor / Ebay offered to buy his company for $300 Million cash / Lost everything&nbsp;</p> <p>18:40 &#8211; 25:16 &nbsp; &nbsp; How to scale a startup from day 0 &#8211; to sale / Zingy / Build a business where unit economics make sense / Become profitable as soon as you can / Selling his company / OLX /&nbsp;</p> <p>25:17 &#8211; 27:09&nbsp; &nbsp; Do you need to have a passion for your product&nbsp;</p> <p>27:10 &#8211; 30:59 &nbsp; &nbsp; Craiglist / Trying to run Cuba / Building another Necker Island&nbsp;</p> <p>31:00 &#8211; 33:32 &nbsp; &nbsp; FJ Labs / 400 Investments, 150 + exits / Investment thesis&nbsp;&nbsp;</p> <p>33:33 &#8211; 35:49&nbsp; &nbsp; &nbsp; Difference between starting a startup in 1998 and 2019&nbsp;</p> <p>35:50 &#8211; 41:00&nbsp; &nbsp; &nbsp; Most common mistakes founders make that should be avoided / why most people fail / Picking the right idea from a theoretical approach / Know why you are approaching a VC / Investment Philosophy + Thesis&nbsp;&nbsp;</p> <p>41:01 &#8211; 42:30 &nbsp; &nbsp; &nbsp; What do you look for in an entrepreneur / Storytelling, tenacity, knowing your numbers, passion&nbsp;</p> <p>42:31 &#8211; 47:02&nbsp; &nbsp; &nbsp; &nbsp; Non-obvious habits that changed your life/adrenaline junkie / not having a set path / Living life to the fullest&nbsp;</p> <p>47:05 &#8211; 49:39&nbsp; &nbsp; &nbsp; &nbsp; How to read a 100 books a year / Most mind-boggling book Sapiens&nbsp;</p> <p>49:40 &#8211; 58:45 &nbsp; &nbsp; &nbsp; &nbsp; Framework for making important decisions in your life /&nbsp;Fabrice&nbsp;Grinda Book&nbsp;</p> <p>58:46 &#8211; 1:01:19&nbsp; &nbsp; &nbsp; One tip someone can implement into their life right now to change their life / Have everything scheduled in your calendar&nbsp;</p> <p>1:01:20 &#8211; 1:04:04 &nbsp; &nbsp; &nbsp; Message to younger self / Be emotionally intelligent&nbsp;</p> <p>1:04:08 &#8211; 1:06:18 &nbsp; &nbsp; &nbsp; Closing notes / Expressing gratitude&nbsp;</p>

<p>I had the pleasure of having a far reaching conversation with Ephraim Yarmak whom I had the pleasure &hellip; <a href="https://fabricegrinda.com/founder-storiez-podcast/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;Founder Storiez Podcast&#8221;</span></a></p>

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Founder Storiez Podcast. Categories - Entrepreneurship, Interviews &amp; Fireside Chats. Date-Posted - 2019-08-13T14:58:06 . I had the pleasure of having a far reaching conversation with Ephraim Yarmak whom I had the pleasure to meet at a YJP event. Download In this interview, we speak with&nbsp;Fabrice&nbsp;Grinda Founder FJ Labs Fabrice&nbsp;is a serial entrepreneur and life enthusiast. The companies he founded have raised $100s of Millions and he sold his companies for $100s of millions.&nbsp; He has an incredibly inspiring story of a shy kid from a small village in France to become the #1 Angel Investor in the world.&nbsp; He has invested in more than 400 startups and 150+ exits. He has invested in the likes of Alibaba, Airbnb, Knotel, Uber, Palantir &amp; many more.&nbsp; He has a great journey, and in this interview, we learn about his life and entrepreneurship &amp; Investor journey.&nbsp; Enjoy.&nbsp;About FounderStoriez.&nbsp; FounderStoriez is a podcast that interviews entrepreneurs, investors, and people that are making a difference in the world and inspiring others.&nbsp;&nbsp; We interview and share their stories so we can learn from and implement into our own life.&nbsp;0:00 &#8211; 0:56&nbsp; &nbsp; Welcoming notes&nbsp; 0:58 &#8211; 3:20 &nbsp; &nbsp; Origin / Upbringing / Being the chosen one and spoiled / Shy &amp; introverted as a kid /&nbsp; Got the first computer at 10 and fell in love at first sight&nbsp; 3:23 &#8211; 11:20&nbsp; &nbsp; How he was able to bring out his extroverted side / Went to Princeton / Always knew he wanted to be a tech entrepreneur / His first job after college was at Mckinsey / Learning EQ &amp; Social skills&nbsp; / After Mckinsey went ahead and launched his first startup / As a founder you are a salesperson and need to be able to storytelling / His unconventional unorthodox way of overcoming rejection and scoring a date&nbsp; 11:21 &#8211; 15:29 &nbsp; &nbsp; Fear of failure / How to build up emotional resilience / Learn to fail early / Being flexible and not set on one path / Learning from your mistakes / Having humility&nbsp; 15:30 &#8211; 18:39 &nbsp; &nbsp; His biggest failure / Choosing the wrong investor / Ebay offered to buy his company for $300 Million cash / Lost everything&nbsp; 18:40 &#8211; 25:16 &nbsp; &nbsp; How to scale a startup from day 0 &#8211; to sale / Zingy / Build a business where unit economics make sense / Become profitable as soon as you can / Selling his company / OLX /&nbsp; 25:17 &#8211; 27:09&nbsp; &nbsp; Do you need to have a passion for your product&nbsp; 27:10 &#8211; 30:59 &nbsp; &nbsp; Craiglist / Trying to run Cuba / Building another Necker Island&nbsp; 31:00 &#8211; 33:32 &nbsp; &nbsp; FJ Labs / 400 Investments, 150 + exits / Investment thesis&nbsp;&nbsp; 33:33 &#8211; 35:49&nbsp; &nbsp; &nbsp; Difference between starting a startup in 1998 and 2019&nbsp; 35:50 &#8211; 41:00&nbsp; &nbsp; &nbsp; Most common mistakes founders make that should be avoided / why most people fail / Picking the right idea from a theoretical approach / Know why you are approaching a VC / Investment Philosophy + Thesis&nbsp;&nbsp; 41:01 &#8211; 42:30 &nbsp; &nbsp; &nbsp; What do you look for in an entrepreneur / Storytelling, tenacity, knowing your numbers, passion&nbsp; 42:31 &#8211; 47:02&nbsp; &nbsp; &nbsp; &nbsp; Non-obvious habits that changed your life/adrenaline junkie / not having a set path / Living life to the fullest&nbsp; 47:05 &#8211; 49:39&nbsp; &nbsp; &nbsp; &nbsp; How to read a 100 books a year / Most mind-boggling book Sapiens&nbsp; 49:40 &#8211; 58:45 &nbsp; &nbsp; &nbsp; &nbsp; Framework for making important decisions in your life /&nbsp;Fabrice&nbsp;Grinda Book&nbsp; 58:46 &#8211; 1:01:19&nbsp; &nbsp; &nbsp; One tip someone can implement into their life right now to change their life / Have everything scheduled in your calendar&nbsp; 1:01:20 &#8211; 1:04:04 &nbsp; &nbsp; &nbsp; Message to younger self / Be emotionally intelligent&nbsp; 1:04:08 &#8211; 1:06:18 &nbsp; &nbsp; &nbsp; Closing notes / Expressing gratitude&nbsp;

2019-08-06T17:20:27

2019-08-06T17:20:27

https://fabricegrinda.com/?p=9829

2021-05-28T07:00:21

2021-05-28T07:00:21

thanks-for-the-perfect-day

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Thanks for the perfect day!

<figure class="wp-block-image"><img loading="lazy" decoding="async" width="4032" height="3024" src="https://fabricegrinda.com/wp-content/uploads/2019/08/Photo1.jpg" alt="" class="wp-image-9846"/></figure> <p>Birthdays are a great time for reflection and this one especially made me feel extremely grateful for the life I had. I had the perfect day: friends, family, kiting, foiling, massage, tennis and more!</p> <figure class="wp-block-image"><img loading="lazy" decoding="async" width="907" height="2175" src="https://fabricegrinda.com/wp-content/uploads/2019/08/Group-9-2.jpg" alt="" class="wp-image-9849"/></figure> <p>My only wish is for more of the same.</p> <figure class="wp-block-video aligncenter"><video controls src="https://fabricegrinda.com/wp-content/uploads/2019/08/Video-Aug-03-10-47-58-PM-1.mp4"></video></figure> <p>Thank you!</p>

<p>Birthdays are a great time for reflection and this one especially made me feel extremely grateful for the &hellip; <a href="https://fabricegrinda.com/thanks-for-the-perfect-day/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;Thanks for the perfect day!&#8221;</span></a></p>

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Thanks for the perfect day!. Categories - Personal Musings. Date-Posted - 2019-08-06T17:20:27 . Birthdays are a great time for reflection and this one especially made me feel extremely grateful for the life I had. I had the perfect day: friends, family, kiting, foiling, massage, tennis and more! My only wish is for more of the same. Thank you!

2019-07-09T16:52:37

2019-07-09T16:52:37

https://fabricegrinda.com/?p=9814

2021-05-28T07:00:47

2021-05-28T07:00:47

why-we-sleep-is-a-must-read-and-may-be-the-scariest-book-i-ever-read

publish

post

https://fabricegrinda.com/why-we-sleep-is-a-must-read-and-may-be-the-scariest-book-i-ever-read/

Why we sleep is a must read and may be the scariest book I ever read

<p>Over the years I prided myself in being able to thrive on very little sleep. As the evidence provided by Matthew Walker in <em><a href="https://www.amazon.com/Why-We-Sleep-Unlocking-Dreams/dp/1501144324/ref=sr_1_1?keywords=why+we+sleep&amp;qid=1562691573&amp;s=gateway&amp;sr=8-1" target="_blank" rel="noreferrer noopener" aria-label="Why We Sleep (opens in a new tab)">Why We Sleep</a></em> shows this was misguided. Not sleeping enough conclusively leads to and contributes to many ails including cancer, heart disease and dementia. It also dramatically shortens your life. In other words, the saying “I’ll sleep when I’m dead” could not be further from the truth as not sleeping enough will undoubtedly lead to an earlier death.&nbsp;</p> <p>On top of that being under slept significantly reduces mental acuity, willpower, creativity and new memory formation. Also, while there are differences in circadian cycles between night owls and early birds, it’s not enough to just get the recommended 8 hours of sleep, you also need to go to sleep at the right time to get the proper amounts of both NREM and REM sleep. Going to bed at 2 am instead of 11 pm for instance essentially eliminated deep NREM sleep in most people.&nbsp;</p> <p>The book shed light on many other facts I was not aware of:&nbsp;</p> <ul><li>Decaffeinated is not the same as caffeine free and has 3% to 30% of the caffeine of fully caffeinated drinks</li><li>The half life of caffeine is 6 hours, meaning that if you drink a coffee at 4 pm, at 10 pm you still have 50% of the caffeine in your system</li><li>Alcohol makes you sleepy, but severely impacts sleep quality, leading the author tongue in cheek to recommend that if you must drink, you should do so first thing in the morning</li><li>Sleeping pills, while they make you sleep, prevent you from reaching high quality sleep and should be avoided at all cost</li><li>Your body cools down at night which is why our minds have a Pavlovian response and become sleepier when we get colder</li><li>A hot bath before bed will increase the cooling rate of your body which is the reason it puts you to sleep</li></ul> <p>I’ve been a bad sleeper my entire life. It’s very hard for me to fall asleep and it takes very little to wake me up which means that for years I averaged less than 6 hours of sleep per night (as tracked by my Fitbit). I am also the least sexy sleeper alive with my face mask, ear plugs and mouth guard.&nbsp;</p> <p>Post reading the book, I’ve made many changes to my sleep routine following the suggestions of the author:</p> <ul><li>I try to go to bed at 11 pm every night</li><li>I try to be in bed for 9 hours from 11 pm to 8 am targeting 8 hours of sleep (as we are awake at least one hour per night)</li><li>I cool the room temperature from 75 degrees to 68 degrees at night</li><li>I regularly take a hot bath before bed</li><li>I put black tape on every single source of light in my bedroom and have blackout shades for the room to be pitch black&nbsp;</li><li>I play white noise to cover outside noise</li><li>I don’t have a TV in the bedroom to train my mind to associate the bed only with sleep and sex</li><li>I blue shift my electronic devices after 9 pm</li><li>I try to do a quick calming meditation right before bed</li><li>I don’t consume caffeinated drinks post noon and decaf coffee post 2 pm</li><li>I don’t consume any alcohol (which was not a big change as I did not consume alcohol before either)</li></ul> <p>With all those changes I am a better sleeper, though I rarely manage 7 hours of sleep per night. However, it’s a work in progress and an ongoing life goal. I recommend everyone adopts most of the elements in this routine to get the quality of sleep and rest they deserve to live a happy, healthy life.&nbsp;</p> <div class="wp-block-image"><figure class="aligncenter is-resized"><a href="https://www.amazon.com/Why-We-Sleep-Unlocking-Dreams/dp/1501144324/ref=sr_1_1?keywords=why+we+sleep&amp;qid=1562691573&amp;s=gateway&amp;sr=8-1" target="_blank" rel="noreferrer noopener"><img loading="lazy" decoding="async" src="https://fabricegrinda.com/wp-content/uploads/2019/07/81w6RZ6xm1L.jpg" alt="" class="wp-image-9816" width="306" height="462"/></a></figure></div>

<p>Over the years I prided myself in being able to thrive on very little sleep. As the evidence &hellip; <a href="https://fabricegrinda.com/why-we-sleep-is-a-must-read-and-may-be-the-scariest-book-i-ever-read/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;Why we sleep is a must read and may be the scariest book I ever read&#8221;</span></a></p>

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Why we sleep is a must read and may be the scariest book I ever read. Categories - Books. Date-Posted - 2019-07-09T16:52:37 . Over the years I prided myself in being able to thrive on very little sleep. As the evidence provided by Matthew Walker in Why We Sleep shows this was misguided. Not sleeping enough conclusively leads to and contributes to many ails including cancer, heart disease and dementia. It also dramatically shortens your life. In other words, the saying “I’ll sleep when I’m dead” could not be further from the truth as not sleeping enough will undoubtedly lead to an earlier death.&nbsp; On top of that being under slept significantly reduces mental acuity, willpower, creativity and new memory formation. Also, while there are differences in circadian cycles between night owls and early birds, it’s not enough to just get the recommended 8 hours of sleep, you also need to go to sleep at the right time to get the proper amounts of both NREM and REM sleep. Going to bed at 2 am instead of 11 pm for instance essentially eliminated deep NREM sleep in most people.&nbsp; The book shed light on many other facts I was not aware of:&nbsp; Decaffeinated is not the same as caffeine free and has 3% to 30% of the caffeine of fully caffeinated drinksThe half life of caffeine is 6 hours, meaning that if you drink a coffee at 4 pm, at 10 pm you still have 50% of the caffeine in your systemAlcohol makes you sleepy, but severely impacts sleep quality, leading the author tongue in cheek to recommend that if you must drink, you should do so first thing in the morningSleeping pills, while they make you sleep, prevent you from reaching high quality sleep and should be avoided at all costYour body cools down at night which is why our minds have a Pavlovian response and become sleepier when we get colderA hot bath before bed will increase the cooling rate of your body which is the reason it puts you to sleep I’ve been a bad sleeper my entire life. It’s very hard for me to fall asleep and it takes very little to wake me up which means that for years I averaged less than 6 hours of sleep per night (as tracked by my Fitbit). I am also the least sexy sleeper alive with my face mask, ear plugs and mouth guard.&nbsp; Post reading the book, I’ve made many changes to my sleep routine following the suggestions of the author: I try to go to bed at 11 pm every nightI try to be in bed for 9 hours from 11 pm to 8 am targeting 8 hours of sleep (as we are awake at least one hour per night)I cool the room temperature from 75 degrees to 68 degrees at nightI regularly take a hot bath before bedI put black tape on every single source of light in my bedroom and have blackout shades for the room to be pitch black&nbsp;I play white noise to cover outside noiseI don’t have a TV in the bedroom to train my mind to associate the bed only with sleep and sexI blue shift my electronic devices after 9 pmI try to do a quick calming meditation right before bedI don’t consume caffeinated drinks post noon and decaf coffee post 2 pmI don’t consume any alcohol (which was not a big change as I did not consume alcohol before either) With all those changes I am a better sleeper, though I rarely manage 7 hours of sleep per night. However, it’s a work in progress and an ongoing life goal. I recommend everyone adopts most of the elements in this routine to get the quality of sleep and rest they deserve to live a happy, healthy life.&nbsp;

2019-07-02T16:47:40

2019-07-02T16:47:40

https://fabricegrinda.com/?p=9802

2021-05-28T07:01:29

2021-05-28T07:01:29

podcast-on-health-and-well-being

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https://fabricegrinda.com/podcast-on-health-and-well-being/

I had the pleasure of being a guest on the #PopHealth show to discuss the importance of health and well-being

<p>I had the pleasure of being invited to the <a href="https://soundcloud.com/pophealth" target="_blank" rel="noreferrer noopener" aria-label="#PopHealth Show (opens in a new tab)">#PopHealth Show</a>. While we started by discussing FJ’s investments in health and food tech, the conversation veered personal. I elaborated on my routine of following a strict ketogenic diet with intermittent fasting 3 or 4 times per week, while trying (though rarely succeeding) to sleep 8 hours per night.&nbsp;</p> <iframe loading="lazy" width="90%" height="166" scrolling="no" frameborder="no" allow="autoplay" src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/633173226&amp;color=%23ff5500&amp;auto_play=false&amp;hide_related=false&amp;show_comments=true&amp;show_user=true&amp;show_reposts=false&amp;show_teaser=true"></iframe> <p><br>You can also find the podcast on:<br> 1.&nbsp;<a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://podcasts.apple.com/us/podcast/fabrice-grinda-fj-labs-well-being-is-everything/id1185510482?i=1000440859498" target="_blank">iTunes</a><br> 2.&nbsp;<a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://open.spotify.com/episode/5MM32074D5rKs8pv1ZcOkH" target="_blank">Spotify</a><br> 3.&nbsp;<a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://www.stitcher.com/podcast/health-hero-2/the-pophealth-show/e/61760280" target="_blank">Stitcher</a></p>

<p>I had the pleasure of being invited to the #PopHealth Show. While we started by discussing FJ’s investments &hellip; <a href="https://fabricegrinda.com/podcast-on-health-and-well-being/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;I had the pleasure of being a guest on the #PopHealth show to discuss the importance of health and well-being&#8221;</span></a></p>

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I had the pleasure of being a guest on the #PopHealth show to discuss the importance of health and well-being. Categories - Personal Musings. Date-Posted - 2019-07-02T16:47:40 . I had the pleasure of being invited to the #PopHealth Show. While we started by discussing FJ’s investments in health and food tech, the conversation veered personal. I elaborated on my routine of following a strict ketogenic diet with intermittent fasting 3 or 4 times per week, while trying (though rarely succeeding) to sleep 8 hours per night.&nbsp; You can also find the podcast on: 1.&nbsp;iTunes 2.&nbsp;Spotify 3.&nbsp;Stitcher

2019-06-27T11:52:20

2019-06-27T11:52:20

https://fabricegrinda.com/?p=9794

2021-05-28T07:02:03

2021-05-28T07:02:03

fun-podcast-in-french-on-french-morning

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https://fabricegrinda.com/fun-podcast-in-french-on-french-morning/

Fun podcast in French on French Morning

<p>In this 30 minute conversation, we covered my path from nerd to entrepreneur and investor with all the highs and lows of entrepreneurship along the way.</p> <a class="spreaker-player" href="https://www.spreaker.com/user/frenchmorning/fabrice-grinda" data-resource="episode_id=18184783" data-theme="light" data-autoplay="false" data-playlist="false" data-cover="https://d3wo5wojvuv7l.cloudfront.net/images.spreaker.com/original/2c79885e0c6f6fb3ffc9995b37954c04.jpg" data-width="100%" data-height="400px" target="_blank" rel="noopener">Listen to &#8220;Episode 9: Fabrice Grinda, de &#8220;geek asocial&#8221; à roi des &#8220;angel investors&#8221;&#8221; on Spreaker.</a><script async="" src="https://widget.spreaker.com/widgets.js"></script> <p>Listen this podcast on <a href="https://podcasts.apple.com/us/podcast/french-boss/id1458753750" target="_blank" rel="noopener">iTunes</a></p>

<p>In this 30 minute conversation, we covered my path from nerd to entrepreneur and investor with all the &hellip; <a href="https://fabricegrinda.com/fun-podcast-in-french-on-french-morning/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;Fun podcast in French on French Morning&#8221;</span></a></p>

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Fun podcast in French on French Morning. Categories - Entrepreneurship, Interviews &amp; Fireside Chats. Date-Posted - 2019-06-27T11:52:20 . In this 30 minute conversation, we covered my path from nerd to entrepreneur and investor with all the highs and lows of entrepreneurship along the way. Listen to &#8220;Episode 9: Fabrice Grinda, de &#8220;geek asocial&#8221; à roi des &#8220;angel investors&#8221;&#8221; on Spreaker. Listen this podcast on iTunes

2019-06-19T13:48:26

2019-06-19T13:48:26

https://fabricegrinda.com/?p=9779

2023-11-17T13:38:40

2023-11-17T13:38:40

a-framework-for-making-important-decisions-step-4-4

publish

post

https://fabricegrinda.com/a-framework-for-making-important-decisions-step-4-4/

A framework for making important decisions: Step 4/4

<p>I was originally going to only have three steps in my decision-making framework. The idea was that at the end of the third step, when the timing called for it, you would go through the exercise all over again. Upon reflection, I decided to add a fourth step of reflecting on the experience to identify the lessons learned along the way.&nbsp;</p> <p><strong>Step 4: Ponder lessons learned before going back to Step 1 when appropriate</strong></p> <p>As you probably surmised in reading my&nbsp;<a href="https://fabricegrinda.com/a-framework-for-making-important-decisions-step-3-4/">Step 3 of the decision making process</a>, post-leaving OLX the path that led me to my current professional and personal life setup was windy and fraught with failure. Most of the things I attempted were unsuccessful. That said, failure itself was not the issue. When you throw a lot of spaghetti on the wall, it’s not surprising that much of it does not stick. The key is learning the right lessons from the failure.</p> <p>Upon reflection, I made similar fundamental mistakes on two of my projects. As I pointed out in my&nbsp;<a href="https://fabricegrinda.com/2018-giving-up-and-moving-on/">2018 year in review</a>, I finally gave up on my Silicon Cabarete and Age of Nations game project last year. In hindsight, I should have given up on those projects much earlier.</p> <p>I pride myself on using KPIs (Key Performance Indicators) to objectively assess whether I am making progress against my goals. The issue was that in both cases I used the wrong KPIs. In the case of Silicon Cabarete, I kept a checklist of all the things required to commence construction. Over the last 7 years, it always felt like we were making progress against the checklist which is why I kept going. The issue is that in a country, like the Dominican Republic, given the intentional complexity to create opportunities for corruption, the requirements kept changing, approvals that had been given were arbitrarily rescinded, and everything moved glacially. I came to realize the government could just keep expanding the requirements to keep me going in an ever-going flywheel. The reality is that my checklist was irrelevant.&nbsp;</p> <p>I should have used a more objective measure of whether we were making real progress towards finishing construction and being able to enjoy the playground of my dreams. I originally bought the land when I was 38. I expected to be able to celebrate my 40th&nbsp;birthday there. When that came and went, with millions spent on legal, consulting and administrative fees, I should have pulled the plug. By the time I turned 44, not a single brick had been laid. Clearly, we were not making real progress regardless of what my tracker was saying.&nbsp;</p> <p>In a way the KPIs should have been simpler:</p> <ul> <li>Did the construction start?</li> <li>What is the estimated completion date?</li> <li>How far off are we from the budget?</li> </ul> <p>Utilizing these KPIs I would have pulled the plug a lot earlier, especially as I should have put clear red lines in the sand in terms of unacceptable timings. Because I did not do that, 7 years went by during which I did not have a real home or the playground with all the activities I adore. From 2005 to 2012, my home had a padel court, tennis court, remote controlled car racing track, paintball field, game room with shuffle board, foosball, pool, ping pong and poker, a movie theater with a 220” screen, and PC gaming and console gaming rooms for friends to play together or against each other. Yes, I know I am really 15 years old&nbsp;</p> <p>I expected to have this again 2014 onwards, after my 40th&nbsp;birthday. Unfortunately, it did not happen and has not happened to this day. It’s not as though those are life essentials and I was deprived. Quite the contrary, I had amazing life experiences in asset light living (see&nbsp;<a href="https://fabricegrinda.com/the-very-big-downgrade/">The Very Big Downgrade</a>&nbsp;&amp;&nbsp;<a href="https://fabricegrinda.com/update-on-the-very-big-downgrade/">Update on the Very Big Downgrade</a>). I traveled extensively and went on many adventures, but I must admit I do miss the convenience of being able to play tennis and padel every day or just to have my friends come over for a LAN party.</p> <p>I did a detailed analysis when I picked Cabarete in the Dominican Republic (see<a href="https://fabricegrinda.com/why-i-chose-cabarete/">&nbsp;Why I chose Cabarete</a>). Cabarete came on top because it was gorgeous, raw and authentic. It feels like remote areas of South East Asia. It has direct three and a half hour flights from New York and is 20 minutes from the airport. The water temperature is 77 degrees or warmer the entire year. It does not rain that much. There is great wind for kite surfing. Land, labor and construction are inexpensive. It’s a “proper” country with 10 million people with a good labor force and a large enough tax base that tariffs are reasonable and it’s easy to immigrate to and/or bring people to work there.&nbsp;</p> <p>The mistake I made is that I did not put enough weight to some of the other variables such as rule of law, corruption and safety. At the same time, I underestimated the complexities of construction projects which require time and attention that I don’t have. In hindsight, I should have just bought an already built house that I can just move in, in a stable country where I could buy inexpensive nearby land to build my playground and call it a day. It would not fulfill my grandiose vision of building a “Necker Island 2.0” to invite a community of entrepreneurs, artists and intellectuals to hang out, nor would it have my specific aesthetic preferences, but it would have the convenience of being immediately useful and to play the role of gathering point for friends, family and colleagues.</p> <p>This led me to buy a house in Turks &amp; Caicos to serve as my replacement for Cabarete in my alternating life setup (see&nbsp;<a href="https://fabricegrinda.com/a-framework-for-making-important-decisions-step-3-4/">A framework for making important decisions: Step 3 of 4</a>). I now spend one month in New York, then go to Turks for a month and alternate every month. It gives me enough consecutive time in both places to have the time to live the full New York life, and then to properly disconnect in Turks.</p> <p>Turks is very built out and does not have the raw authenticity of Cabarete. There are fewer days of wind for kiting, and it’s insanely expensive. However, it has the most beautiful water in the world. The weather is fantastic all year long. The flights are only three hours from New York. It’s English speaking and uses the dollar as its currency. The safety, flat water and gorgeous beaches, not to mention the absence of Zika, Chikungunya and dengue make it appealing for all my friends and their families, and not just my adventurous friends who liked the rougher conditions of my Cabarete dwelling with its massive spiders, rats and cockroaches&nbsp;</p> <p>Having learned from my prior experiences, I decided to buy a house on Providenciales on Long Bay Beach where I can kite directly from the house and play tennis at the house. I opted not to buy on the other islands despite significantly lower prices and the availability of more land, because the lack of infrastructure makes things way more complicated and expensive. It’s also inconvenient to go for a few days if upon landing you need to be driven to a boat to get to your destination. I will now buy a little bit of inexpensive non-beachfront property to build the missing elements of my playground starting with the all-important padel court.</p> <p>Another clear observation from my experimentation between 2012 and 2019 is that the projects that require other people’s approval are much less likely to succeed. Craig &amp; Jim did not agree to let me run or buy Craigslist. The Castros did not allow me to run a Special Economic Zone in Cuba. eBay ultimately decided not to sell eBay Classifieds in 2015. The Dominican government did not give me the permits required to build my entrepreneurial playground. By contrast, part of the reason&nbsp;<a href="https://fjlabs.com/" target="_blank" rel="noopener">FJ Labs</a>&nbsp;is what stuck out of all the things I tried, is that it does not take anyone’s permission to invest in startups or create startups.</p> <p>That said, the conclusion is not to stop pursuing these huge “crazy” ideas. Quite the contrary, they can be life altering and societally impactful, but as I pursue them, I need to be cognizant of their lower probability of success and plan accordingly. I’m pursuing one such project as we speak and hope that this time I setup my time allocation and KPIs appropriately and objectively. I will report back on how it plays out in a few years.&nbsp;</p> <p>When it’s all said and done, I would recommend going through the exercise again starting with&nbsp;<a href="https://fabricegrinda.com/a-framework-for-making-important-decisions-step-1-3/">Step 1 of the decision making framework</a>&nbsp;whenever you are facing a major life altering decision, or when you feel a sense of malaise, or simply if you have not done it in the past two years. Because of the power of momentum and how busy we are with our modern lives, it’s easy to keep running without ever taking a step back to question our decisions and assess our state of mind.</p> <p>In the case of FJ Labs, because we find ourselves raising money for third party investors every two to three years, those are good check-in points. I went through this exercise as we decided to raise a second institutional fund last year which in turn led to this blog post series and an upcoming blog post on the current meaning of my life.&nbsp;</p>

<p>I was originally going to only have three steps in my decision-making framework. The idea was that at &hellip; <a href="https://fabricegrinda.com/a-framework-for-making-important-decisions-step-4-4/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;A framework for making important decisions: Step 4/4&#8221;</span></a></p>

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A framework for making important decisions: Step 4/4. Categories - Business Musings, Entrepreneurship, Featured Posts, How to make the most important decisions in your life, Personal Musings. Date-Posted - 2019-06-19T13:48:26 . I was originally going to only have three steps in my decision-making framework. The idea was that at the end of the third step, when the timing called for it, you would go through the exercise all over again. Upon reflection, I decided to add a fourth step of reflecting on the experience to identify the lessons learned along the way.&nbsp; Step 4: Ponder lessons learned before going back to Step 1 when appropriate As you probably surmised in reading my&nbsp;Step 3 of the decision making process, post-leaving OLX the path that led me to my current professional and personal life setup was windy and fraught with failure. Most of the things I attempted were unsuccessful. That said, failure itself was not the issue. When you throw a lot of spaghetti on the wall, it’s not surprising that much of it does not stick. The key is learning the right lessons from the failure. Upon reflection, I made similar fundamental mistakes on two of my projects. As I pointed out in my&nbsp;2018 year in review, I finally gave up on my Silicon Cabarete and Age of Nations game project last year. In hindsight, I should have given up on those projects much earlier. I pride myself on using KPIs (Key Performance Indicators) to objectively assess whether I am making progress against my goals. The issue was that in both cases I used the wrong KPIs. In the case of Silicon Cabarete, I kept a checklist of all the things required to commence construction. Over the last 7 years, it always felt like we were making progress against the checklist which is why I kept going. The issue is that in a country, like the Dominican Republic, given the intentional complexity to create opportunities for corruption, the requirements kept changing, approvals that had been given were arbitrarily rescinded, and everything moved glacially. I came to realize the government could just keep expanding the requirements to keep me going in an ever-going flywheel. The reality is that my checklist was irrelevant.&nbsp; I should have used a more objective measure of whether we were making real progress towards finishing construction and being able to enjoy the playground of my dreams. I originally bought the land when I was 38. I expected to be able to celebrate my 40th&nbsp;birthday there. When that came and went, with millions spent on legal, consulting and administrative fees, I should have pulled the plug. By the time I turned 44, not a single brick had been laid. Clearly, we were not making real progress regardless of what my tracker was saying.&nbsp; In a way the KPIs should have been simpler: Did the construction start? What is the estimated completion date? How far off are we from the budget? Utilizing these KPIs I would have pulled the plug a lot earlier, especially as I should have put clear red lines in the sand in terms of unacceptable timings. Because I did not do that, 7 years went by during which I did not have a real home or the playground with all the activities I adore. From 2005 to 2012, my home had a padel court, tennis court, remote controlled car racing track, paintball field, game room with shuffle board, foosball, pool, ping pong and poker, a movie theater with a 220” screen, and PC gaming and console gaming rooms for friends to play together or against each other. Yes, I know I am really 15 years old&nbsp; I expected to have this again 2014 onwards, after my 40th&nbsp;birthday. Unfortunately, it did not happen and has not happened to this day. It’s not as though those are life essentials and I was deprived. Quite the contrary, I had amazing life experiences in asset light living (see&nbsp;The Very Big Downgrade&nbsp;&amp;&nbsp;Update on the Very Big Downgrade). I traveled extensively and went on many adventures, but I must admit I do miss the convenience of being able to play tennis and padel every day or just to have my friends come over for a LAN party. I did a detailed analysis when I picked Cabarete in the Dominican Republic (see&nbsp;Why I chose Cabarete). Cabarete came on top because it was gorgeous, raw and authentic. It feels like remote areas of South East Asia. It has direct three and a half hour flights from New York and is 20 minutes from the airport. The water temperature is 77 degrees or warmer the entire year. It does not rain that much. There is great wind for kite surfing. Land, labor and construction are inexpensive. It’s a “proper” country with 10 million people with a good labor force and a large enough tax base that tariffs are reasonable and it’s easy to immigrate to and/or bring people to work there.&nbsp; The mistake I made is that I did not put enough weight to some of the other variables such as rule of law, corruption and safety. At the same time, I underestimated the complexities of construction projects which require time and attention that I don’t have. In hindsight, I should have just bought an already built house that I can just move in, in a stable country where I could buy inexpensive nearby land to build my playground and call it a day. It would not fulfill my grandiose vision of building a “Necker Island 2.0” to invite a community of entrepreneurs, artists and intellectuals to hang out, nor would it have my specific aesthetic preferences, but it would have the convenience of being immediately useful and to play the role of gathering point for friends, family and colleagues. This led me to buy a house in Turks &amp; Caicos to serve as my replacement for Cabarete in my alternating life setup (see&nbsp;A framework for making important decisions: Step 3 of 4). I now spend one month in New York, then go to Turks for a month and alternate every month. It gives me enough consecutive time in both places to have the time to live the full New York life, and then to properly disconnect in Turks. Turks is very built out and does not have the raw authenticity of Cabarete. There are fewer days of wind for kiting, and it’s insanely expensive. However, it has the most beautiful water in the world. The weather is fantastic all year long. The flights are only three hours from New York. It’s English speaking and uses the dollar as its currency. The safety, flat water and gorgeous beaches, not to mention the absence of Zika, Chikungunya and dengue make it appealing for all my friends and their families, and not just my adventurous friends who liked the rougher conditions of my Cabarete dwelling with its massive spiders, rats and cockroaches&nbsp; Having learned from my prior experiences, I decided to buy a house on Providenciales on Long Bay Beach where I can kite directly from the house and play tennis at the house. I opted not to buy on the other islands despite significantly lower prices and the availability of more land, because the lack of infrastructure makes things way more complicated and expensive. It’s also inconvenient to go for a few days if upon landing you need to be driven to a boat to get to your destination. I will now buy a little bit of inexpensive non-beachfront property to build the missing elements of my playground starting with the all-important padel court. Another clear observation from my experimentation between 2012 and 2019 is that the projects that require other people’s approval are much less likely to succeed. Craig &amp; Jim did not agree to let me run or buy Craigslist. The Castros did not allow me to run a Special Economic Zone in Cuba. eBay ultimately decided not to sell eBay Classifieds in 2015. The Dominican government did not give me the permits required to build my entrepreneurial playground. By contrast, part of the reason&nbsp;FJ Labs&nbsp;is what stuck out of all the things I tried, is that it does not take anyone’s permission to invest in startups or create startups. That said, the conclusion is not to stop pursuing these huge “crazy” ideas. Quite the contrary, they can be life altering and societally impactful, but as I pursue them, I need to be cognizant of their lower probability of success and plan accordingly. I’m pursuing one such project as we speak and hope that this time I setup my time allocation and KPIs appropriately and objectively. I will report back on how it plays out in a few years.&nbsp; When it’s all said and done, I would recommend going through the exercise again starting with&nbsp;Step 1 of the decision making framework&nbsp;whenever you are facing a major life altering decision, or when you feel a sense of malaise, or simply if you have not done it in the past two years. Because of the power of momentum and how busy we are with our modern lives, it’s easy to keep running without ever taking a step back to question our decisions and assess our state of mind. In the case of FJ Labs, because we find ourselves raising money for third party investors every two to three years, those are good check-in points. I went through this exercise as we decided to raise a second institutional fund last year which in turn led to this blog post series and an upcoming blog post on the current meaning of my life.&nbsp;

2019-04-16T17:05:39

2019-04-16T17:05:39

https://fabricegrinda.com/?p=9723

2021-05-28T07:03:18

2021-05-28T07:03:18

fabrice-grinda-400x-angel-alibaba-knotel-opendoor-flexport-and-many-x-co-founder-of-auclan-zingy-olx-and-company-builder-fj-labs

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https://fabricegrinda.com/fabrice-grinda-400x-angel-alibaba-knotel-opendoor-flexport-and-many-x-co-founder-of-auclan-zingy-olx-and-company-builder-fj-labs/

Fabrice Grinda, 400x angel (Alibaba, Knotel, OpenDoor, Flexport) and many X co-founder of Aucland, Zingy, OLX and company-builder FJ Labs

<p>Amol Sarva (Knotel cofounder) takes In the Know to talk with with the angel and founder Fabrice Grinda about his 100s of startup experiences and mainly about systems — the system for selecting the right businesses for Fabrice, originally his 9 Business Selection Criteria along with its brand new update, and about happiness. Fabrice is a world-recognized expert on happiness, and we talk about the happiness of groups, not just individuals.</p> <p><!--[if lt IE 9]><script>document.createElement('audio');</script><![endif]--> <audio class="wp-audio-shortcode" id="audio-9723-1" preload="none" style="width: 100%;" controls="controls"><source type="audio/mpeg" src="http://amol.sarva.co/wp-content/uploads/2019/04/22-grinda.mp3?_=1" /><a href="http://amol.sarva.co/wp-content/uploads/2019/04/22-grinda.mp3" target="_blank" rel="noopener">http://amol.sarva.co/wp-content/uploads/2019/04/22-grinda.mp3</a></audio></p> <p><a href="http://amol.sarva.co/podcast-download/4517/fabrice-grinda-400x-angel-alibaba-knotel-opendoor-flexport-and-many-x-co-founder-of-auclan-zingy-olx-and-company-builder-fj-labs.mp3?ref=download" target="_blank" rel="noopener noreferrer">Download file</a> | <a href="http://amol.sarva.co/wp-content/uploads/2019/04/22-grinda.mp3" target="_blank" rel="noopener noreferrer">Play in new window</a>| Duration: 51:53</p> <p>Original interview&nbsp;<a href="http://amol.sarva.co/podcast/fabrice-grinda-400x-angel-alibaba-knotel-opendoor-flexport-and-many-x-co-founder-of-auclan-zingy-olx-and-company-builder-fj-labs/" target="_blank" rel="noopener noreferrer">here</a></p>

<p>Amol Sarva (Knotel cofounder) takes In the Know to talk with with the angel and founder Fabrice Grinda &hellip; <a href="https://fabricegrinda.com/fabrice-grinda-400x-angel-alibaba-knotel-opendoor-flexport-and-many-x-co-founder-of-auclan-zingy-olx-and-company-builder-fj-labs/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;Fabrice Grinda, 400x angel (Alibaba, Knotel, OpenDoor, Flexport) and many X co-founder of Aucland, Zingy, OLX and company-builder FJ Labs&#8221;</span></a></p>

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Fabrice Grinda, 400x angel (Alibaba, Knotel, OpenDoor, Flexport) and many X co-founder of Aucland, Zingy, OLX and company-builder FJ Labs. Categories - Entrepreneurship, Interviews &amp; Fireside Chats, Personal Musings. Date-Posted - 2019-04-16T17:05:39 . Amol Sarva (Knotel cofounder) takes In the Know to talk with with the angel and founder Fabrice Grinda about his 100s of startup experiences and mainly about systems — the system for selecting the right businesses for Fabrice, originally his 9 Business Selection Criteria along with its brand new update, and about happiness. Fabrice is a world-recognized expert on happiness, and we talk about the happiness of groups, not just individuals. http://amol.sarva.co/wp-content/uploads/2019/04/22-grinda.mp3 Download file | Play in new window| Duration: 51:53 Original interview&nbsp;here

2019-04-09T13:04:29

2019-04-09T13:04:29

https://fabricegrinda.com/?p=9691

2021-05-28T07:03:40

2021-05-28T07:03:40

creator-lab-podcast-fabrice-grinda-1-angel-investor-in-the-world-future-of-marketplaces

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https://fabricegrinda.com/creator-lab-podcast-fabrice-grinda-1-angel-investor-in-the-world-future-of-marketplaces/

Creator Lab Podcast: Fabrice Grinda, #1 Angel Investor In The World // Future Of Marketplaces

<p><center><iframe loading="lazy" style="border: none;" src="//html5-player.libsyn.com/embed/episode/id/9256916/height/90/theme/custom/thumbnail/yes/direction/backward/render-playlist/no/custom-color/fc4100/" scrolling="no" allowfullscreen="allowfullscreen" width="100%" height="90"></iframe></center><center></center><a href="https://itunes.apple.com/us/podcast/creator-lab/id1145198837?mt=2&amp;app=podcast" target="_blank" rel="noopener noreferrer"><img loading="lazy" decoding="async" class="alignnone size-full wp-image-9704" src="https://fabricegrinda.com/wp-content/uploads/2019/04/listen-apple-podcasts-1200x307-1025x262.png" alt="" width="102" height="26"></a><a href="https://open.spotify.com/show/1WOKaiG9F2etrzBzINRBGa" target="_blank" rel="noopener noreferrer"><img loading="lazy" decoding="async" class="alignnone size-full wp-image-9711" src="https://fabricegrinda.com/wp-content/uploads/2019/04/téléchargement.png" alt="" width="102" height="20"></a></p> <p><center><iframe loading="lazy" src="https://www.youtube.com/embed/SGPMfHxFmgo" allowfullscreen="allowfullscreen" width="840" height="472" frameborder="0"></iframe></center>&nbsp;</p> <p>Fabrice Grinda has been called the most prolific angel investor in the world, even being ranked #1 in <a href="https://www.forbes.com/sites/alejandrocremades/2018/08/05/top-50-angel-investors-based-on-investment-volume-and-successful-exits/#6e2111247748" target="_blank" rel="noopener noreferrer">Forbes</a> based on investment volume + number of exits.</p> <p>He’s exited hundreds of millions of dollars from 500+ investments in companies like <em>Alibaba, Viagogo, Tencent, Airbnb, Betterment, Uber, Fanduel &amp; Palantir.</em></p> <p>Before setting up his “startup studio” &amp; investment fund, he started and sold multiple companies including OLX, the leading “Craigslist” marketplace of countries like India, Brazil &amp; Pakistan.</p> <p>But things weren’t always so rosy.</p> <p>Fabrice shares stories of living on $2/day, living in his office because he couldn’t afford an apartment &amp; missing payroll 27 times!</p> <p>We also discuss the future of marketplaces, how he’d think of business ideas if starting today, the science of happiness, minimalism, and why we’re still at the very beginning of the tech revolution.</p> <h3>Show Notes</h3> <p>Here are five things to listen out for:</p> <p>(1) Reasons to be optimistic – why we’re the luckiest people in the world to be alive at this time and why we’re only at 1% of the tech revolution</p> <p>(2) Minimalism – from living on a 20-acre estate in Bedford, New York, to “island shopping” and then selling all his possessions – Fabrice has lived both extremes and shares his perspective on a healthy balance</p> <p>(3) The Science of Happiness – factors that make people happy and hacks to maximize your own “mean level of happiness”</p> <p>(4) The Future of Marketplaces – 3 trends in marketplace businesses and a framework for thinking about business ideas</p> <p>(5) How Venture Capital Works – the typical startup investing cycle, from initial investment to venture capital funding levels at series A, B, C etc.</p> <p>Original interview at: <a href="https://www.creatorlab.fm/fabrice-grinda-fj-labs-interview/" target="_blank" rel="noopener noreferrer">https://www.creatorlab.fm/fabrice-grinda-fj-labs-interview/</a></p>

<p>&nbsp; Fabrice Grinda has been called the most prolific angel investor in the world, even being ranked #1 &hellip; <a href="https://fabricegrinda.com/creator-lab-podcast-fabrice-grinda-1-angel-investor-in-the-world-future-of-marketplaces/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;Creator Lab Podcast: Fabrice Grinda, #1 Angel Investor In The World // Future Of Marketplaces&#8221;</span></a></p>

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Creator Lab Podcast: Fabrice Grinda, #1 Angel Investor In The World // Future Of Marketplaces. Categories - Entrepreneurship, Interviews &amp; Fireside Chats, Marketplaces, Personal Musings. Date-Posted - 2019-04-09T13:04:29 . &nbsp; Fabrice Grinda has been called the most prolific angel investor in the world, even being ranked #1 in Forbes based on investment volume + number of exits. He’s exited hundreds of millions of dollars from 500+ investments in companies like Alibaba, Viagogo, Tencent, Airbnb, Betterment, Uber, Fanduel &amp; Palantir. Before setting up his “startup studio” &amp; investment fund, he started and sold multiple companies including OLX, the leading “Craigslist” marketplace of countries like India, Brazil &amp; Pakistan. But things weren’t always so rosy. Fabrice shares stories of living on $2/day, living in his office because he couldn’t afford an apartment &amp; missing payroll 27 times! We also discuss the future of marketplaces, how he’d think of business ideas if starting today, the science of happiness, minimalism, and why we’re still at the very beginning of the tech revolution. Show Notes Here are five things to listen out for: (1) Reasons to be optimistic – why we’re the luckiest people in the world to be alive at this time and why we’re only at 1% of the tech revolution (2) Minimalism – from living on a 20-acre estate in Bedford, New York, to “island shopping” and then selling all his possessions – Fabrice has lived both extremes and shares his perspective on a healthy balance (3) The Science of Happiness – factors that make people happy and hacks to maximize your own “mean level of happiness” (4) The Future of Marketplaces – 3 trends in marketplace businesses and a framework for thinking about business ideas (5) How Venture Capital Works – the typical startup investing cycle, from initial investment to venture capital funding levels at series A, B, C etc. Original interview at: https://www.creatorlab.fm/fabrice-grinda-fj-labs-interview/

2019-03-19T14:21:40

2019-03-19T14:21:40

https://fabricegrinda.com/?p=9678

2023-11-17T13:38:55

2023-11-17T13:38:55

a-framework-for-making-important-decisions-step-3-4

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https://fabricegrinda.com/a-framework-for-making-important-decisions-step-3-4/

A framework for making important decisions: Step 3/4

<p>Usually through the process of writing down thoughts and discussing them with friends and advisors, the correct answer comes naturally, often when you expect it the least. Sometimes it takes days, and sometimes months, but it will come if the decision you are considering is binary. This typically involves a choice between continuing what you are doing or moving on to something else. For instance, I wrote the email considering leaving OLX on July 30, 2012, and I left on December 17, 2012. I laid out the logic of that decision in <a href="https://fabricegrinda.com/why-i-am-leaving-olx/" target="_blank" rel="noopener noreferrer">Why I am leaving OLX</a> which was much more fleshed out and thoughtful than my general sense of malaise and followed a long personal cost / benefit analysis.</p> <p>Once the decision was made, I felt relieved, happy and confident that I had made the right choice. What was less clear was what to do next, which leads me to Step 3 in the decision-making framework.</p> <p><strong>Step 3: Explore many paths, find what sticks, iterate</strong></p> <p>As entrepreneurs we throw a lot of spaghetti on the wall to see what sticks. Once we find things that stick, we iterate on all their aspects: design, product, funnels, business model, team composition&#8230; Ultimately disruptive product change and success are the result of 1% improvements done 1,000 times over (though until you are at scale you need to find things that move the needle more to get statistical significance).</p> <p>We don’t do enough of either of those steps in our personal and professional lives. Coming out of OLX, I decided to open my mind and free up time to try as many things as possible. To increase my flexibility and not tie myself down to my existing choices, I gave up my house in Bedford, my apartment in New York and sold my car. I gave 75% of my non-financial material possessions to charity and the rest to my friends and family. I detailed this in <a href="https://fabricegrinda.com/the-very-big-downgrade/" target="_blank" rel="noopener noreferrer">The Very Big Downgrade</a> and explained <a href="https://fabricegrinda.com/asset-light-living/" target="_blank" rel="noopener noreferrer">how I went down to 50 items</a> which fit in my carry on, backpack and tennis bag. This allowed me to experiment in my personal and professional lives.</p> <p><strong>Personal Experimentation</strong></p> <p>On the personal side, I had two objectives: reconnect in a deeper and more meaningful way with my friends and family and find a work life balance that works for me. As I detailed in <a href="https://fabricegrinda.com/update-on-the-very-big-downgrade/" target="_blank" rel="noopener noreferrer">Update on The Very Big Downgrade</a>, I tried lots of different approaches. I had the feeling that my friendships were fraying and becoming shallower. First, I tried to live on my friends’ couches and guest bedrooms. It was an utter failure and total disaster. As Benjamin Franklin once said house guests, like fish, start smelling after 3 days. The issue is that embedding yourself in other people’s lives while they still have obligations with work, their kids etc. only creates incremental burden for them. My vision of hanging out and remaking the world for hours on end was just not realistic given the constraints in their lives. That said I did not let that discourage me and kept trying. I organized vacations with friends testing every variable possible: time of year, group size, location etc. It took me a long time to find the solution because the ultimate answer went against all my core instincts.</p> <p>My preference is to go on remote adventure trips when no one else is going on vacation. However, to really have my friends and family present during the vacation and not stressed or distracted we had to meet in a safe, comfortable, yet inexpensive place that is easy to reach, during traditional school and work vacations with lots of activities and supervision organized for their kids. Once I figured that model, it was easy to reconnect in a more meaningful way especially as it connected well with my new model for work life balance.</p> <p>I started emitting ideas for life design in the “other considerations” section of <a href="https://fabricegrinda.com/a-framework-for-making-important-decisions-step-1-3/" target="_blank" rel="noopener noreferrer">Step 1 of the decision-making framework</a>. I love New York. It’s the place where I feel at home. I love its intellectual, social, artistic and professional opportunities. As a result, my time in New York is always extraordinarily intense personally and professionally. Over the years, I realized I also needed to get away from the hustle and bustle and be in a place where the 15-year-old in me can run wild.</p> <p>Sands Point and Bedford played that role: I installed a paintball field, padel court and remote-controlled car race track in the garden. I setup a movie room, console gaming room and PC gaming room. Tennis and go-kart racing were easily available. However, the setup was not ideal. Spending Friday, Saturday and Sunday outside the city was socially isolating. It took a lot of effort and organization to get people to come visit and I disliked the transaction costs inherent in going from one place to the other every 3 or 4 days.</p> <p>The Mediterranean boy in me also yearned for warmth and sun. I started to suspect that a setup where I spent an extended period in New York City proper would combine well with spending an extended period in a place where there was little to do – ideally where I could work during the day, kite surf and play tennis in the evenings and that was it. It would be a place where I could be reflective and spend time reading, writing and thinking. After a pleasant period of “island shopping,” my heart settled on Cabarete (read <a href="https://fabricegrinda.com/why-i-chose-cabarete/" target="_blank" rel="noopener noreferrer">Why I Chose Cabarete</a>) which was suitable both for my work / life balance setup and as a gathering point for friends and family.</p> <p>I then iterated a lot on time split between New York and Cabarete, how often to be alone versus have people come visit, group sizes and much more. Traveling from one to the other every week proved too tiring. Only making the trip every 2 months made me lose ties to the place I was not in. I ultimately settled on the following model: spend one month in New York, then go to Cabarete for a month and alternate every month. It gives me enough consecutive time in both places to have the time to live the full New York life, and then to properly disconnect in Cabarete.</p> <p>During my Cabarete stints, I settled on splitting my time between being fully alone and having small groups of colleagues, friends and family come visit. This allows me to reflect, think through trends, read, and rebuild my energy half the time, while strengthening my relationships and being social the other half. In both cases a typical day includes several hours of emails, Zoom and Skype calls, an hour of kiting and an hour of tennis. The Dominican Republic also started serving as the gathering point for friends and family several times a year during school holidays.</p> <p>I complement this setup with a few real vacations in different locales every year. I go heli-skiing the last week of January in the Revelstoke area. I organize a friends and family ski trip for President&#8217;s Day weekend in February. I spend a week in June in Nice visiting my family. I also go on two other week-long trips in exotic locales with a few close friends (no more than 4 of us typically) every year.</p> <p><strong>Professional Experimentation</strong></p> <p>Now that I had my set up, the time came to figure out what I was going to do next professionally. Given that I settled on Cabarete, I started working on my Silicon Cabarete project. However, it was just never meant to be a full-time project, but just a fun development and gathering point for entrepreneurs, my friends and family. Having left OLX, I went back to the July 2012 email to try to pursue the seven ideas I had emitted in <a href="https://fabricegrinda.com/a-framework-for-making-important-decisions-step-1-3/" target="_blank" rel="noopener noreferrer">Step 1 of the decision making framework</a>.</p> <p><strong>Try to convince Craigslist to let me run them</strong></p> <p>I had first approached Craigslist back in 2005 after I sold Zingy. I was impressed by their liquidity but had been disappointed by their horrible product and non-existent content moderation. I asked them to let me run product, content moderation, and their international expansion efforts. They were not interested at the time, nor were they interested in selling the company. Admittedly, their reluctance was understandable as I did not have credibility in this space, despite being a successful entrepreneur (I had grown Zingy into a profitable company with $200M in annual revenues).</p> <p>I approached them again in 2013, after I left OLX, thinking that by now, I had earned the credibility. I had built a classifieds site that was larger than Craigslist with over 300 million unique visitors per month, 5,000 employees and with a much higher net promoter score. We had built what Craigslist should be: a mobile-first, spam free, murder free, prostitution-free, personals free, classified site, catering to the primary decision makers in all household purchases: women, creating a safe environment for them to trade.</p> <p>I reached out to Craig and Jim and offered to run Craigslist for free for a year. Should they be happy with my work, they could compensate me in equity after a year&#8217;s worth of work and should they not be happy, they could let me go at no cost to them. I was sadly not able to convince them that this made sense. They frankly didn&#8217;t care to improve Craigslist. They were also not interested in selling to me despite the multi-billion dollar offers I was putting on the table. It was also amusing to note that every time we interacted, they seemed to have forgotten we had ever talked before.</p> <p><strong>Try to extract the non-strategic countries out of OLX to have a dividend stream + try the classifieds 3.0 strategy</strong></p> <p>Failing to convince Jim and Craig, I moved on to my next idea. I tried to convince Naspers to let me buy out their non-core countries, like the US, to launch a classifieds 3.0 strategy. Sadly, they were also not interested. They felt it was complicated to extract some countries and it did not move the needle enough for them to be worth considering.</p> <p>I considered independently launching a new mobile classifieds site to go after Craigslist in the US. I reached out to my head of mobile at OLX after he also left OLX. Unfortunately, he was tired of classifieds and decided to pursue other paths, so I set the idea aside.</p> <p><strong>Think through the new idea I should build or company I should run</strong></p> <p>Inherently I prefer building companies to investing in companies. I get a stronger sense of fulfillment by creating something out of nothing and directly impacting the lives of my employees and users. In fact, I had never meant to sell OLX. I would have been happy to run it forever given the positive contribution we were making to millions of people’s lives and the scale we had reached. Sadly, when Schibsted, a publicly traded competitor, started aggressively attacking us in our core markets, we needed the capital to fight back which led us to partner with Naspers. They proved to be the right partner and we won the war but had lost our independence. After I left OLX, I started thinking through new companies I could build. As I mentioned in Step 1 of the decision-making framework, I considered building a competitor to <a href="http://www.justanswer.com" target="_blank" rel="noopener noreferrer">www.justanswer.com</a>. I put a lot of thought into 3D printing. I also considered bringing <a href="http://www.made.com" target="_blank" rel="noopener noreferrer">www.made.com</a> to the US.</p> <p>Ultimately, I decided that none of these opportunities were large enough to warrant my full-time commitment and decided to stay open to new opportunities as they presented themselves.</p> <p><strong>Try to buy the IP for Rise of Nations</strong></p> <p>Rise of Nations was my favorite real time strategy game after Age of Empires II. Big Huge Games, the parent company, went bankrupt trying to build an RPG game and its various assets were placed for sale. I bid on Rise of Nations but was outbid.</p> <p>Frankly I am not sure it would have been easy to improve the game to fulfill the vision I had for it of improving the graphics, creating multiplayer auto-match and adding the tactical unit control with cover of a game like Company of Heroes 2.</p> <p>The buyers just re-released it as is on Steam which was a bit disappointing, but easier to do.</p> <p><strong>Become a credible public intellectual</strong></p> <p>Because of my intellectual curiosity and voracious reading, I fancy myself a bit of a polymath. While I sometimes worry that having so many interests might make me a bit of a dilettante, I’ve often felt I had the knowledge to opine intelligently on many issues. This is especially true when it comes to economics.</p> <p>I’ve always been both an economist and an entrepreneur at heart. I studied economics at Princeton because it created a framework that I felt fit best the world we lived in. It’s my fascination with markets as an economist that led me to focus on building and investing in marketplaces as an entrepreneur.</p> <p>Over the years, I have <a href="https://fabricegrinda.com/category/political-economy/" target="_blank" rel="noopener noreferrer">written a lot about economics</a> and spend a fair amount of free time thinking about macroeconomics and microeconomics. I thought it could be interesting to have my thoughts reach a broader audience.</p> <p>I reached out to public intellectuals to understand the journey they took to get there. There seemed to be two components to the answer:</p> <ol> <li>Write op-eds for well-respected newspapers such as the New York Times or the Washington Post. Op-eds have a reasonably rigid format and are around 800 words long.</li> <li>Write on a reasonably narrow range of issues to associate your brand with that issue. This is generally true for the likes of Paul Krugman, Nouriel Roubini, Nassim Taleb and Niall Ferguson.</li> </ol> <p>I started going down the path, but upon writing a few op-eds, I realized that I didn&#8217;t like the exercise. I preferred the flexibility and freedom offered to me by writing a blog like this one. It also occurred to me that given that people have a limited mind-space and associate one site with one topic, I would have more traffic if I only wrote about entrepreneurship where I am considered the most legitimate.</p> <p>That said it’s not the way my mind works. I like sharing about all my adventures, travails and random thoughts, whether it’s book or gadget reviews, thoughts on entrepreneurship, economics or how to make important decisions 🙂</p> <p>I also took the time to write an 11,000-word article: <a href="https://fabricegrinda.com/the-optimistic-thought-experiment-2/" target="_blank" rel="noopener noreferrer">The Economy: An Optimistic Thought Experiment</a></p> <p><strong>New Options</strong></p> <p>While I came up with a total of 8 options in Step 1 of the decision-making framework, they were just a starting point. As I went down certain avenues and exchanged ideas with friends, I came up with many other opportunities and went down many a rabbit hole.</p> <p><strong>Age of Nations</strong></p> <p>For instance, while I was bidding for the Rise of Nations IP, I talked to lots of game studios who could help improve the game. When I failed to buy the game, my brother <a href="https://oliviergrinda.com/)" target="_blank" rel="noopener noreferrer">Olivier</a> and I decided to hire one of them to build the real time strategy game of our dreams. As I detail in <a href="https://fabricegrinda.com/2018-giving-up-and-moving-on/" target="_blank" rel="noopener noreferrer">2018: Giving Up and Moving On</a>, it ultimately turned out to be a failure, but it was an interesting experience nonetheless.</p> <p><strong>Build and Run Special Economic Zone in Cuba</strong></p> <p>In 2013, as I was thinking and writing about economics and starting to work on Silicon Cabarete, the Cuban government started to liberalize the economy and announced they were interested in having Special Economic Zones (SEZs) in the country. At the time the average Cuban salary was $19 per month and the annual FDI was $110 million. Given the quality of the education in Cuba, its geographic proximity to the US, and how badly the formal economy was being run, I felt there was a real opportunity to create a zone which would be a beacon of growth and hope which would better the lives of millions of Cubans.</p> <p>I collected commitments for investments of $300 million to launch the project, with the intent to invest over $1 billion over 4 years. I originally pitched them for an SEZ in Mariel, and in 2014 pitched other locations when they decided to do a SEZ in Mariel with Brazil.</p> <p>Given the economic situation in the country, I felt we could do no wrong provided, we had the right to operate freely. The issue is that from a technical perspective it really needed to be more of a Special Administrative Zone (SAZ) rather than a SEZ. I pitched it as a SEZ for marketing purposes but included all the elements we needed: a convertible currency (not the Cuban peso) and an independent constitution. This constitution protected private property ownership, personal and corporate business rights. The idea was that it would be valid and prevail for the granted territory over the national constitution for a list of pre-agreed bylaws that covered the rights we needed. The national constitution would be valid in the SEZ for everything which was not specified in the SEZ constitution.</p> <p>The zone was to be called Nueva Libertad or New Liberty. You can find the last version of my pitch to the Castros below.</p> <p></p> <div id="wppdfemb-frame-container-13687"><iframe id="wppdf-emb-iframe-13687" scrolling="no" data-pdf-index="6" class="pdfembed-iframe nonfullscreen" style="border: none; width:100%; max-width: 100%; min-height: 1000px;" src="https://fabricegrinda.com?pdfID=13687&#038;url=https%3A%2F%2Ffabricegrinda.com%2Fwp-content%2Fuploads%2F2019%2F03%2FA-framework-for-making-important-decisions.pdf&#038;index=6" ></iframe></div> <p>Ultimately, they were not comfortable with setting up a region that had a different currency and legal system, and I was not comfortable following through with the project unless it did, so I regretfully moved on to other projects.</p> <p><strong>Trying to buy eBay Classifieds in 2015</strong></p> <p>After my attempt to build a special economic zone in Cuba fell through, the most ambitious project I worked on was to try to buy eBay Classifieds from eBay in 2015. Over the years, I had become friendly with John Donahoe who was CEO of eBay from 2008 to 2015. As eBay was splitting its core marketplace assets from Paypal, I partnered with a private equity firm to try to convince them to sell us their classified assets which I was interested in running. We did a lot of work on the project, but sadly eBay ultimately decided to retain its classifieds assets.</p> <p><strong>The Genesis of FJ Labs</strong></p> <p>While most of the ideas I tried failed, two ideas from my Step 1 email from 2012 really worked: angel investing in marketplace startups and helping build a new startup every year.</p> <ol> <li><strong>The Accidental Creation of a Startup Studio:</strong></li> </ol> <p>To improve deal flow and processes, I had already started doing all my angel investments with Jose Marin. When I left OLX, we had already made over 100 angel investments. In fact, despite being a full time CEO, I was often more known as an angel investor, than as a founder. Given how busy I was running OLX, I decided to only invest in things I knew innately, marketplaces, and I created a set of heuristics to decide whether to invest in a company in a 1-hour meeting. Despite this, I was stretched very thin simultaneously running a large company while investing in many startups.</p> <p>Fortunately, I was approached by Morgan Hermand-Waiche, a hungry, young entrepreneur. He originally wanted feedback on his idea, but after a number of iterations (read <a href="https://fabricegrinda.com/grit-perseverance-and-happenstance-the-genesis-of-our-apprenticeship-program/" target="_blank" rel="noreferrer noopener">Grit, Perseverance, and Happenstance: The Genesis of our Apprenticeship Program</a>) he joined me part time while in this second year at HBS to help me filter my inbound deal flow and to find a new idea for him to launch. This forced me to explicitly codify my heuristics and test whether my processes could be imparted unto others. It turned out they could.</p> <p>It also led to the creation of <a href="https://www.adoreme.com/" target="_blank" rel="noreferrer noopener">AdoreMe</a>. Given the success of having an apprentice to help filter the crazy amount of inbound deal flow and the success of AdoreMe, Jose and I created a formal apprenticeship program. We started having apprentices from the top business schools every year. We taught them venture capital during the summer between their first and second year, and part-time, 15 hours a week, during their second year until they graduated. The idea was that upon graduation they would become full time Entrepreneurs in Residence (EIRs) with the objective of becoming co-founders with us of companies we would build together.</p> <p>As we were ideating for the next company to build, we went to Indonesia to consider launching an OTA like Expedia.com there. While the opportunity was real, we ultimately decided we did not want to deal with the Indonesia-specific legal issues and regulatory framework or deal with the 12-hour time difference. While we abandoned the idea of building that company, we kept ideating and iterating on new ideas to bring to the world and ended up creating several new startups in addition to AdoreMe:</p> <ul> <li><a href="http://www.lofty.com" target="_blank" rel="noreferrer noopener">Lofty</a>, an art marketplace</li> <li>Beepi, a managed car marketplace</li> <li><a href="http://www.rebag.com" target="_blank" rel="noreferrer noopener">Rebag</a>, a managed handbag marketplace</li> <li>Poncho, an insurance marketplace</li> <li><a href="http://www.instacarro.com" target="_blank" rel="noreferrer noopener">Instacarro</a>, a consumer to dealer marketplace in Brazil</li> <li><a href="http://www.merlinjobs.com" target="_blank" rel="noreferrer noopener">Merlin</a>, a blue-collar job site</li> <li><a href="http://www.goproperly.com" target="_blank" rel="noreferrer noopener">Properly</a>, a transactional real estate marketplace in Canada</li> </ul> <p>Not all succeeded, in fact Beepi infamously blew up after raising $149 million, but our startup studio model proved successful in attracting amazing talent, led to the creation of several successful startups and was fun to partake in.</p> <p>We iterated a lot on the model before settling on the model as it stands today. We train the apprentices for a year, then they join as EIRs. We jointly ideate until we come up with an idea we want to build together. Jose or I join as co-founders and executive chairmen and invest $750k for 35% of the company. The team collectively has 65%. We also have the right to invest the next $2 million at either $8 million pre-money or at market terms if the entrepreneurs can get a higher valuation.</p> <p>We help de-risk the project given the time we take to ideate and test models. We allow the entrepreneurs to focus fully on executing for the first two years by allowing them not to have to seek pre-seed or seed funding if they don’t want to. We also help actively with marketplace design, recruiting and fundraising. This model has allowed us to attract amazing entrepreneurs in the program. Every year 250 first-year MBA students from Harvard, Columbia, MIT, Stanford and Wharton (and we’ll add Stern next year) vie for 2 to 3 spots.</p> <p>There are many companies we want to build. A recent brainstorm at our Turks &amp; Caicos offsite led us to come up with over 140 ideas! I am sure that one of them will germinate soon enough and I look forward to being able to tell you about it soon.</p> <ol start="2"> <li><strong>The scaling of our angel investing activities:</strong></li> </ol> <p>At the same time, angel investing took on a life of its own and we ended up investing in 60-130 startups every year. As an entrepreneur, I hated that I never knew where I stood with VCs. I would have a meeting which seemingly went very well but would not hear back from them for weeks, if ever. Meetings would be spread across many months. I suppose most VCs don’t want to pass explicitly on a deal to preserve optionality, but it’s extraordinarily frustrating as an entrepreneur. As a result, we decided to evaluate startups in no more than 2 1-hour meetings that take place in less than 2 weeks and to always tell the entrepreneurs where they stand: why we are investing and more importantly for most, why we are not investing and what we would have to see to change our mind.</p> <p>That approached proved appealing to many entrepreneurs and our deal flow kept increasing, as was our reputation as friendly value-added investors. We don’t lead, price, take board seats, have reporting requirements, or have minimum ownership requirements which allows us to be very flexible. We are also comfortable investing at every stage and internationally. 65% of our investments are pre-seed and seed, 25% are Series A &amp; B and 10% are late stage. 70% of our investments are in the US and Canada, 20% in Europe and the Nordics and 10% Brazil and India.</p> <p>While we invest in every geography at every stage, we do have a specificity: we focus on marketplaces and are thesis driven. 70% of the companies we invest in meet our thesis and they all meet our heuristics. That approach of extreme flexibility while being thesis and heuristics driven proved to be very successful. To date we invested in 475 startups, had 163 exits. On these exits we had a realized average multiple of 4.4x and IRR of 61% including all the failures.</p> <ol start="3"> <li><strong>The formal creation of FJ Labs</strong></li> </ol> <p>While we scaled both our startup studio operations and our angel investing activities, it was still not a given that it required the creation of a venture fund. While our approach has been extremely successful, there is a relatively low maximum to the amount of capital we can deploy with our strategy. Because we are not leading and pricing rounds, this puts a maximum check size that we can invest in any given round. We don’t want to compete with traditional VCs, but instead be valuable thought partners for them and a source of differentiated deal flow. With today’s round sizes we can invest a maximum of $225k at pre-seed, $450k at seed, $1M in a Series A and a few million in a Series B but are often limited to smaller investments.</p> <p>Given that we don’t start many companies because our hands-on approach is not very scalable and only invest the first $2.75M, that also does not create an opportunity to deploy a huge amount of capital. Back testing our model, it looked like we could perhaps deploy $100M per year without changing our strategy. We were not successful enough to deploy anywhere near that amount of money, but it was not an issue. We were happy investing in our own name, working with just the apprentices. It would have been nice to have more firepower, but we did not want to lose our flexibility or bother fundraising from institutional LPs who would run away in the other direction when they heard of our crazy investment approach.</p> <p>On top of that the economics of small funds are not particularly appealing. If you deploy $100M and do a 3x, you have $200M of profits. With a 20% carry, you have $40M in profits which you split between the partners. That’s pretty good, but not particularly impressive. However, if you deploy $100M of personal money and do a 3x, you get $200M of profits for yourself. In other words. small funds only really make sense if you are deploying a lot of your personal capital alongside the fund because that’s where the real returns come from. It’s nice to have more firepower and some fees to cover our costs by raising external capital, but it’s not worth going out of our way to pursue.</p> <p>As we were having this reflection, we were approached by <a href="http://www.telenor.com" target="_blank" rel="noreferrer noopener">Telenor</a>, a Norwegian telecom operator with a large presence in South East Asia and 174 million subscribers. To my great chagrin, Telenor had funded Schibsted in its war with OLX which is ultimately what led me to sell OLX to Naspers. That said, OLX’s merger with Schibsted in Brazil and other markets was very profitable for Telenor and gave them direct ownership of several classified assets in South East Asia. Given Telenor’s digital and marketplace ambitions, they reached out to us to see if they could invest in us in order to have a looking glass into the future by having exposure to US tech trends to either defend against them or bring them to their markets.</p> <p>As they were comfortable with our crazy strategy, while it gave us more firepower, and provided a small fee base to start building a real team, we decided to pull the trigger and FJ Labs was formally born in January 2016 with a $50M investment from Telenor complementing our personal capital and the small entrepreneur’s fund we run on <a href="https://angel.co/l/ZF4nx" target="_blank" rel="noreferrer noopener">Angelist</a>.</p> <p>As the relationship proved successful all around, we decided to scale up the partnership and open it to other strategic investors and family offices. Our second institutional fund should close in the coming months with $150M of external capital.</p> <p><strong>Sellit / Wallapop / LetGo</strong></p> <p>The beauty of the FJ Labs setup from my perspective is that it has the flexibility for me to step in operational roles should the situation call for it as it might have had the Craigslist, Cuba or eBay Classifieds opportunities had materialized. In 2014, I circled back to my 2012 idea of building a mobile classifieds site to attack Craigslist in the US. OfferUp had since launched and it would have been clearly better to launch in 2012 when I first had the idea, but they were not following the OLX playbook or the best practices in classifieds and I felt the market was still open. I scaled back my involvement in FJ Labs to the weekly investment committee calls and set about building and running Sellit.</p> <p>We launched in New York, proved out our playbook and started fundraising. In the meantime, the category had gotten very competitive with the launch of several well-funded players such as Close5, VarageSale and most importantly LetGo, backed by OLX, which was launched by Alec Oxenford, my OLX co-founder using the playbook I had helped put together. While we got several term sheets, I felt it would be best to align with a well-funded competitor, so we merged with <a href="http://www.wallapop.com" target="_blank" rel="noreferrer noopener">Wallapop</a>, the leading horizontal classifieds site in Spain. They were backed by Accel, Insight, DST, NEA, 14W and others and had the firepower to properly take on the opportunity. I became chairman of Wallapop and CEO of the US operations.</p> <p>We aggressively competed and grew the business. However, having witnessed firsthand the massive benefits of consolidation at OLX when we merged with Schibsted in Brazil and with Avito in Russia, it quickly became apparent it did not make sense to have two players pursuing the exact same strategy. We merged Wallapop’s US operations with LetGo’s in May 2016, giving the majority of the company to LetGo (and hence OLX). I retired as CEO, left LetGo in Alec’s capable hands, and returned to my normal FJ Labs duties.</p> <p><strong>Conclusion</strong></p> <p>All that to say that since that Step 1 email, I threw a lot of spaghetti on the wall both in my personal and professional lives. There were epic failures along the way, but I stuck to what worked and kept iterating. In the end I found both a personal life setup that worked for me and a new exciting professional adventure.</p>

<p>Usually through the process of writing down thoughts and discussing them with friends and advisors, the correct answer &hellip; <a href="https://fabricegrinda.com/a-framework-for-making-important-decisions-step-3-4/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;A framework for making important decisions: Step 3/4&#8221;</span></a></p>

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A framework for making important decisions: Step 3/4. Categories - Business Musings, Entrepreneurship, Featured Posts, How to make the most important decisions in your life, Personal Musings. Date-Posted - 2019-03-19T14:21:40 . Usually through the process of writing down thoughts and discussing them with friends and advisors, the correct answer comes naturally, often when you expect it the least. Sometimes it takes days, and sometimes months, but it will come if the decision you are considering is binary. This typically involves a choice between continuing what you are doing or moving on to something else. For instance, I wrote the email considering leaving OLX on July 30, 2012, and I left on December 17, 2012. I laid out the logic of that decision in Why I am leaving OLX which was much more fleshed out and thoughtful than my general sense of malaise and followed a long personal cost / benefit analysis. Once the decision was made, I felt relieved, happy and confident that I had made the right choice. What was less clear was what to do next, which leads me to Step 3 in the decision-making framework. Step 3: Explore many paths, find what sticks, iterate As entrepreneurs we throw a lot of spaghetti on the wall to see what sticks. Once we find things that stick, we iterate on all their aspects: design, product, funnels, business model, team composition&#8230; Ultimately disruptive product change and success are the result of 1% improvements done 1,000 times over (though until you are at scale you need to find things that move the needle more to get statistical significance). We don’t do enough of either of those steps in our personal and professional lives. Coming out of OLX, I decided to open my mind and free up time to try as many things as possible. To increase my flexibility and not tie myself down to my existing choices, I gave up my house in Bedford, my apartment in New York and sold my car. I gave 75% of my non-financial material possessions to charity and the rest to my friends and family. I detailed this in The Very Big Downgrade and explained how I went down to 50 items which fit in my carry on, backpack and tennis bag. This allowed me to experiment in my personal and professional lives. Personal Experimentation On the personal side, I had two objectives: reconnect in a deeper and more meaningful way with my friends and family and find a work life balance that works for me. As I detailed in Update on The Very Big Downgrade, I tried lots of different approaches. I had the feeling that my friendships were fraying and becoming shallower. First, I tried to live on my friends’ couches and guest bedrooms. It was an utter failure and total disaster. As Benjamin Franklin once said house guests, like fish, start smelling after 3 days. The issue is that embedding yourself in other people’s lives while they still have obligations with work, their kids etc. only creates incremental burden for them. My vision of hanging out and remaking the world for hours on end was just not realistic given the constraints in their lives. That said I did not let that discourage me and kept trying. I organized vacations with friends testing every variable possible: time of year, group size, location etc. It took me a long time to find the solution because the ultimate answer went against all my core instincts. My preference is to go on remote adventure trips when no one else is going on vacation. However, to really have my friends and family present during the vacation and not stressed or distracted we had to meet in a safe, comfortable, yet inexpensive place that is easy to reach, during traditional school and work vacations with lots of activities and supervision organized for their kids. Once I figured that model, it was easy to reconnect in a more meaningful way especially as it connected well with my new model for work life balance. I started emitting ideas for life design in the “other considerations” section of Step 1 of the decision-making framework. I love New York. It’s the place where I feel at home. I love its intellectual, social, artistic and professional opportunities. As a result, my time in New York is always extraordinarily intense personally and professionally. Over the years, I realized I also needed to get away from the hustle and bustle and be in a place where the 15-year-old in me can run wild. Sands Point and Bedford played that role: I installed a paintball field, padel court and remote-controlled car race track in the garden. I setup a movie room, console gaming room and PC gaming room. Tennis and go-kart racing were easily available. However, the setup was not ideal. Spending Friday, Saturday and Sunday outside the city was socially isolating. It took a lot of effort and organization to get people to come visit and I disliked the transaction costs inherent in going from one place to the other every 3 or 4 days. The Mediterranean boy in me also yearned for warmth and sun. I started to suspect that a setup where I spent an extended period in New York City proper would combine well with spending an extended period in a place where there was little to do – ideally where I could work during the day, kite surf and play tennis in the evenings and that was it. It would be a place where I could be reflective and spend time reading, writing and thinking. After a pleasant period of “island shopping,” my heart settled on Cabarete (read Why I Chose Cabarete) which was suitable both for my work / life balance setup and as a gathering point for friends and family. I then iterated a lot on time split between New York and Cabarete, how often to be alone versus have people come visit, group sizes and much more. Traveling from one to the other every week proved too tiring. Only making the trip every 2 months made me lose ties to the place I was not in. I ultimately settled on the following model: spend one month in New York, then go to Cabarete for a month and alternate every month. It gives me enough consecutive time in both places to have the time to live the full New York life, and then to properly disconnect in Cabarete. During my Cabarete stints, I settled on splitting my time between being fully alone and having small groups of colleagues, friends and family come visit. This allows me to reflect, think through trends, read, and rebuild my energy half the time, while strengthening my relationships and being social the other half. In both cases a typical day includes several hours of emails, Zoom and Skype calls, an hour of kiting and an hour of tennis. The Dominican Republic also started serving as the gathering point for friends and family several times a year during school holidays. I complement this setup with a few real vacations in different locales every year. I go heli-skiing the last week of January in the Revelstoke area. I organize a friends and family ski trip for President&#8217;s Day weekend in February. I spend a week in June in Nice visiting my family. I also go on two other week-long trips in exotic locales with a few close friends (no more than 4 of us typically) every year. Professional Experimentation Now that I had my set up, the time came to figure out what I was going to do next professionally. Given that I settled on Cabarete, I started working on my Silicon Cabarete project. However, it was just never meant to be a full-time project, but just a fun development and gathering point for entrepreneurs, my friends and family. Having left OLX, I went back to the July 2012 email to try to pursue the seven ideas I had emitted in Step 1 of the decision making framework. Try to convince Craigslist to let me run them I had first approached Craigslist back in 2005 after I sold Zingy. I was impressed by their liquidity but had been disappointed by their horrible product and non-existent content moderation. I asked them to let me run product, content moderation, and their international expansion efforts. They were not interested at the time, nor were they interested in selling the company. Admittedly, their reluctance was understandable as I did not have credibility in this space, despite being a successful entrepreneur (I had grown Zingy into a profitable company with $200M in annual revenues). I approached them again in 2013, after I left OLX, thinking that by now, I had earned the credibility. I had built a classifieds site that was larger than Craigslist with over 300 million unique visitors per month, 5,000 employees and with a much higher net promoter score. We had built what Craigslist should be: a mobile-first, spam free, murder free, prostitution-free, personals free, classified site, catering to the primary decision makers in all household purchases: women, creating a safe environment for them to trade. I reached out to Craig and Jim and offered to run Craigslist for free for a year. Should they be happy with my work, they could compensate me in equity after a year&#8217;s worth of work and should they not be happy, they could let me go at no cost to them. I was sadly not able to convince them that this made sense. They frankly didn&#8217;t care to improve Craigslist. They were also not interested in selling to me despite the multi-billion dollar offers I was putting on the table. It was also amusing to note that every time we interacted, they seemed to have forgotten we had ever talked before. Try to extract the non-strategic countries out of OLX to have a dividend stream + try the classifieds 3.0 strategy Failing to convince Jim and Craig, I moved on to my next idea. I tried to convince Naspers to let me buy out their non-core countries, like the US, to launch a classifieds 3.0 strategy. Sadly, they were also not interested. They felt it was complicated to extract some countries and it did not move the needle enough for them to be worth considering. I considered independently launching a new mobile classifieds site to go after Craigslist in the US. I reached out to my head of mobile at OLX after he also left OLX. Unfortunately, he was tired of classifieds and decided to pursue other paths, so I set the idea aside. Think through the new idea I should build or company I should run Inherently I prefer building companies to investing in companies. I get a stronger sense of fulfillment by creating something out of nothing and directly impacting the lives of my employees and users. In fact, I had never meant to sell OLX. I would have been happy to run it forever given the positive contribution we were making to millions of people’s lives and the scale we had reached. Sadly, when Schibsted, a publicly traded competitor, started aggressively attacking us in our core markets, we needed the capital to fight back which led us to partner with Naspers. They proved to be the right partner and we won the war but had lost our independence. After I left OLX, I started thinking through new companies I could build. As I mentioned in Step 1 of the decision-making framework, I considered building a competitor to www.justanswer.com. I put a lot of thought into 3D printing. I also considered bringing www.made.com to the US. Ultimately, I decided that none of these opportunities were large enough to warrant my full-time commitment and decided to stay open to new opportunities as they presented themselves. Try to buy the IP for Rise of Nations Rise of Nations was my favorite real time strategy game after Age of Empires II. Big Huge Games, the parent company, went bankrupt trying to build an RPG game and its various assets were placed for sale. I bid on Rise of Nations but was outbid. Frankly I am not sure it would have been easy to improve the game to fulfill the vision I had for it of improving the graphics, creating multiplayer auto-match and adding the tactical unit control with cover of a game like Company of Heroes 2. The buyers just re-released it as is on Steam which was a bit disappointing, but easier to do. Become a credible public intellectual Because of my intellectual curiosity and voracious reading, I fancy myself a bit of a polymath. While I sometimes worry that having so many interests might make me a bit of a dilettante, I’ve often felt I had the knowledge to opine intelligently on many issues. This is especially true when it comes to economics. I’ve always been both an economist and an entrepreneur at heart. I studied economics at Princeton because it created a framework that I felt fit best the world we lived in. It’s my fascination with markets as an economist that led me to focus on building and investing in marketplaces as an entrepreneur. Over the years, I have written a lot about economics and spend a fair amount of free time thinking about macroeconomics and microeconomics. I thought it could be interesting to have my thoughts reach a broader audience. I reached out to public intellectuals to understand the journey they took to get there. There seemed to be two components to the answer: Write op-eds for well-respected newspapers such as the New York Times or the Washington Post. Op-eds have a reasonably rigid format and are around 800 words long. Write on a reasonably narrow range of issues to associate your brand with that issue. This is generally true for the likes of Paul Krugman, Nouriel Roubini, Nassim Taleb and Niall Ferguson. I started going down the path, but upon writing a few op-eds, I realized that I didn&#8217;t like the exercise. I preferred the flexibility and freedom offered to me by writing a blog like this one. It also occurred to me that given that people have a limited mind-space and associate one site with one topic, I would have more traffic if I only wrote about entrepreneurship where I am considered the most legitimate. That said it’s not the way my mind works. I like sharing about all my adventures, travails and random thoughts, whether it’s book or gadget reviews, thoughts on entrepreneurship, economics or how to make important decisions 🙂 I also took the time to write an 11,000-word article: The Economy: An Optimistic Thought Experiment New Options While I came up with a total of 8 options in Step 1 of the decision-making framework, they were just a starting point. As I went down certain avenues and exchanged ideas with friends, I came up with many other opportunities and went down many a rabbit hole. Age of Nations For instance, while I was bidding for the Rise of Nations IP, I talked to lots of game studios who could help improve the game. When I failed to buy the game, my brother Olivier and I decided to hire one of them to build the real time strategy game of our dreams. As I detail in 2018: Giving Up and Moving On, it ultimately turned out to be a failure, but it was an interesting experience nonetheless. Build and Run Special Economic Zone in Cuba In 2013, as I was thinking and writing about economics and starting to work on Silicon Cabarete, the Cuban government started to liberalize the economy and announced they were interested in having Special Economic Zones (SEZs) in the country. At the time the average Cuban salary was $19 per month and the annual FDI was $110 million. Given the quality of the education in Cuba, its geographic proximity to the US, and how badly the formal economy was being run, I felt there was a real opportunity to create a zone which would be a beacon of growth and hope which would better the lives of millions of Cubans. I collected commitments for investments of $300 million to launch the project, with the intent to invest over $1 billion over 4 years. I originally pitched them for an SEZ in Mariel, and in 2014 pitched other locations when they decided to do a SEZ in Mariel with Brazil. Given the economic situation in the country, I felt we could do no wrong provided, we had the right to operate freely. The issue is that from a technical perspective it really needed to be more of a Special Administrative Zone (SAZ) rather than a SEZ. I pitched it as a SEZ for marketing purposes but included all the elements we needed: a convertible currency (not the Cuban peso) and an independent constitution. This constitution protected private property ownership, personal and corporate business rights. The idea was that it would be valid and prevail for the granted territory over the national constitution for a list of pre-agreed bylaws that covered the rights we needed. The national constitution would be valid in the SEZ for everything which was not specified in the SEZ constitution. The zone was to be called Nueva Libertad or New Liberty. You can find the last version of my pitch to the Castros below. Ultimately, they were not comfortable with setting up a region that had a different currency and legal system, and I was not comfortable following through with the project unless it did, so I regretfully moved on to other projects. Trying to buy eBay Classifieds in 2015 After my attempt to build a special economic zone in Cuba fell through, the most ambitious project I worked on was to try to buy eBay Classifieds from eBay in 2015. Over the years, I had become friendly with John Donahoe who was CEO of eBay from 2008 to 2015. As eBay was splitting its core marketplace assets from Paypal, I partnered with a private equity firm to try to convince them to sell us their classified assets which I was interested in running. We did a lot of work on the project, but sadly eBay ultimately decided to retain its classifieds assets. The Genesis of FJ Labs While most of the ideas I tried failed, two ideas from my Step 1 email from 2012 really worked: angel investing in marketplace startups and helping build a new startup every year. The Accidental Creation of a Startup Studio: To improve deal flow and processes, I had already started doing all my angel investments with Jose Marin. When I left OLX, we had already made over 100 angel investments. In fact, despite being a full time CEO, I was often more known as an angel investor, than as a founder. Given how busy I was running OLX, I decided to only invest in things I knew innately, marketplaces, and I created a set of heuristics to decide whether to invest in a company in a 1-hour meeting. Despite this, I was stretched very thin simultaneously running a large company while investing in many startups. Fortunately, I was approached by Morgan Hermand-Waiche, a hungry, young entrepreneur. He originally wanted feedback on his idea, but after a number of iterations (read Grit, Perseverance, and Happenstance: The Genesis of our Apprenticeship Program) he joined me part time while in this second year at HBS to help me filter my inbound deal flow and to find a new idea for him to launch. This forced me to explicitly codify my heuristics and test whether my processes could be imparted unto others. It turned out they could. It also led to the creation of AdoreMe. Given the success of having an apprentice to help filter the crazy amount of inbound deal flow and the success of AdoreMe, Jose and I created a formal apprenticeship program. We started having apprentices from the top business schools every year. We taught them venture capital during the summer between their first and second year, and part-time, 15 hours a week, during their second year until they graduated. The idea was that upon graduation they would become full time Entrepreneurs in Residence (EIRs) with the objective of becoming co-founders with us of companies we would build together. As we were ideating for the next company to build, we went to Indonesia to consider launching an OTA like Expedia.com there. While the opportunity was real, we ultimately decided we did not want to deal with the Indonesia-specific legal issues and regulatory framework or deal with the 12-hour time difference. While we abandoned the idea of building that company, we kept ideating and iterating on new ideas to bring to the world and ended up creating several new startups in addition to AdoreMe: Lofty, an art marketplace Beepi, a managed car marketplace Rebag, a managed handbag marketplace Poncho, an insurance marketplace Instacarro, a consumer to dealer marketplace in Brazil Merlin, a blue-collar job site Properly, a transactional real estate marketplace in Canada Not all succeeded, in fact Beepi infamously blew up after raising $149 million, but our startup studio model proved successful in attracting amazing talent, led to the creation of several successful startups and was fun to partake in. We iterated a lot on the model before settling on the model as it stands today. We train the apprentices for a year, then they join as EIRs. We jointly ideate until we come up with an idea we want to build together. Jose or I join as co-founders and executive chairmen and invest $750k for 35% of the company. The team collectively has 65%. We also have the right to invest the next $2 million at either $8 million pre-money or at market terms if the entrepreneurs can get a higher valuation. We help de-risk the project given the time we take to ideate and test models. We allow the entrepreneurs to focus fully on executing for the first two years by allowing them not to have to seek pre-seed or seed funding if they don’t want to. We also help actively with marketplace design, recruiting and fundraising. This model has allowed us to attract amazing entrepreneurs in the program. Every year 250 first-year MBA students from Harvard, Columbia, MIT, Stanford and Wharton (and we’ll add Stern next year) vie for 2 to 3 spots. There are many companies we want to build. A recent brainstorm at our Turks &amp; Caicos offsite led us to come up with over 140 ideas! I am sure that one of them will germinate soon enough and I look forward to being able to tell you about it soon. The scaling of our angel investing activities: At the same time, angel investing took on a life of its own and we ended up investing in 60-130 startups every year. As an entrepreneur, I hated that I never knew where I stood with VCs. I would have a meeting which seemingly went very well but would not hear back from them for weeks, if ever. Meetings would be spread across many months. I suppose most VCs don’t want to pass explicitly on a deal to preserve optionality, but it’s extraordinarily frustrating as an entrepreneur. As a result, we decided to evaluate startups in no more than 2 1-hour meetings that take place in less than 2 weeks and to always tell the entrepreneurs where they stand: why we are investing and more importantly for most, why we are not investing and what we would have to see to change our mind. That approached proved appealing to many entrepreneurs and our deal flow kept increasing, as was our reputation as friendly value-added investors. We don’t lead, price, take board seats, have reporting requirements, or have minimum ownership requirements which allows us to be very flexible. We are also comfortable investing at every stage and internationally. 65% of our investments are pre-seed and seed, 25% are Series A &amp; B and 10% are late stage. 70% of our investments are in the US and Canada, 20% in Europe and the Nordics and 10% Brazil and India. While we invest in every geography at every stage, we do have a specificity: we focus on marketplaces and are thesis driven. 70% of the companies we invest in meet our thesis and they all meet our heuristics. That approach of extreme flexibility while being thesis and heuristics driven proved to be very successful. To date we invested in 475 startups, had 163 exits. On these exits we had a realized average multiple of 4.4x and IRR of 61% including all the failures. The formal creation of FJ Labs While we scaled both our startup studio operations and our angel investing activities, it was still not a given that it required the creation of a venture fund. While our approach has been extremely successful, there is a relatively low maximum to the amount of capital we can deploy with our strategy. Because we are not leading and pricing rounds, this puts a maximum check size that we can invest in any given round. We don’t want to compete with traditional VCs, but instead be valuable thought partners for them and a source of differentiated deal flow. With today’s round sizes we can invest a maximum of $225k at pre-seed, $450k at seed, $1M in a Series A and a few million in a Series B but are often limited to smaller investments. Given that we don’t start many companies because our hands-on approach is not very scalable and only invest the first $2.75M, that also does not create an opportunity to deploy a huge amount of capital. Back testing our model, it looked like we could perhaps deploy $100M per year without changing our strategy. We were not successful enough to deploy anywhere near that amount of money, but it was not an issue. We were happy investing in our own name, working with just the apprentices. It would have been nice to have more firepower, but we did not want to lose our flexibility or bother fundraising from institutional LPs who would run away in the other direction when they heard of our crazy investment approach. On top of that the economics of small funds are not particularly appealing. If you deploy $100M and do a 3x, you have $200M of profits. With a 20% carry, you have $40M in profits which you split between the partners. That’s pretty good, but not particularly impressive. However, if you deploy $100M of personal money and do a 3x, you get $200M of profits for yourself. In other words. small funds only really make sense if you are deploying a lot of your personal capital alongside the fund because that’s where the real returns come from. It’s nice to have more firepower and some fees to cover our costs by raising external capital, but it’s not worth going out of our way to pursue. As we were having this reflection, we were approached by Telenor, a Norwegian telecom operator with a large presence in South East Asia and 174 million subscribers. To my great chagrin, Telenor had funded Schibsted in its war with OLX which is ultimately what led me to sell OLX to Naspers. That said, OLX’s merger with Schibsted in Brazil and other markets was very profitable for Telenor and gave them direct ownership of several classified assets in South East Asia. Given Telenor’s digital and marketplace ambitions, they reached out to us to see if they could invest in us in order to have a looking glass into the future by having exposure to US tech trends to either defend against them or bring them to their markets. As they were comfortable with our crazy strategy, while it gave us more firepower, and provided a small fee base to start building a real team, we decided to pull the trigger and FJ Labs was formally born in January 2016 with a $50M investment from Telenor complementing our personal capital and the small entrepreneur’s fund we run on Angelist. As the relationship proved successful all around, we decided to scale up the partnership and open it to other strategic investors and family offices. Our second institutional fund should close in the coming months with $150M of external capital. Sellit / Wallapop / LetGo The beauty of the FJ Labs setup from my perspective is that it has the flexibility for me to step in operational roles should the situation call for it as it might have had the Craigslist, Cuba or eBay Classifieds opportunities had materialized. In 2014, I circled back to my 2012 idea of building a mobile classifieds site to attack Craigslist in the US. OfferUp had since launched and it would have been clearly better to launch in 2012 when I first had the idea, but they were not following the OLX playbook or the best practices in classifieds and I felt the market was still open. I scaled back my involvement in FJ Labs to the weekly investment committee calls and set about building and running Sellit. We launched in New York, proved out our playbook and started fundraising. In the meantime, the category had gotten very competitive with the launch of several well-funded players such as Close5, VarageSale and most importantly LetGo, backed by OLX, which was launched by Alec Oxenford, my OLX co-founder using the playbook I had helped put together. While we got several term sheets, I felt it would be best to align with a well-funded competitor, so we merged with Wallapop, the leading horizontal classifieds site in Spain. They were backed by Accel, Insight, DST, NEA, 14W and others and had the firepower to properly take on the opportunity. I became chairman of Wallapop and CEO of the US operations. We aggressively competed and grew the business. However, having witnessed firsthand the massive benefits of consolidation at OLX when we merged with Schibsted in Brazil and with Avito in Russia, it quickly became apparent it did not make sense to have two players pursuing the exact same strategy. We merged Wallapop’s US operations with LetGo’s in May 2016, giving the majority of the company to LetGo (and hence OLX). I retired as CEO, left LetGo in Alec’s capable hands, and returned to my normal FJ Labs duties. Conclusion All that to say that since that Step 1 email, I threw a lot of spaghetti on the wall both in my personal and professional lives. There were epic failures along the way, but I stuck to what worked and kept iterating. In the end I found both a personal life setup that worked for me and a new exciting professional adventure.

2019-03-13T16:29:45

2019-03-13T16:29:45

https://fabricegrinda.com/?p=9671

2021-05-28T07:04:44

2021-05-28T07:04:44

fireside-chat-about-building-marketplaces-with-jason-goldlist-at-techtoronto

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Fireside Chat about building marketplaces with Jason Goldlist at TechToronto

<p>The chat was fun, detailed and far ranging.</p> <p><center><iframe loading="lazy" src="https://www.youtube.com/embed/rcUdEv4-vZw" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" width="840" height="472" frameborder="0"></iframe></center></p>

<p>The chat was fun, detailed and far ranging.</p>

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Fireside Chat about building marketplaces with Jason Goldlist at TechToronto. Categories - Entrepreneurship, Interviews &amp; Fireside Chats, Marketplaces. Date-Posted - 2019-03-13T16:29:45 . The chat was fun, detailed and far ranging.

2019-02-12T16:05:17

2019-02-12T16:05:17

https://fabricegrinda.com/?p=9658

2023-02-03T09:36:24

2023-02-03T09:36:24

a-week-in-paradise-snow-20-below

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https://fabricegrinda.com/a-week-in-paradise-snow-20-below/

A Week in Paradise: Snow &#038; 20 Below :)

<p>I am very grateful my parents introduced me to skiing when I was young and that I was able to practice it extensively growing up. It’s a little-known fact that there are amazing ski resorts less than 90 minutes from my hometown in Nice (France), a town usually associated with beach vacations.</p> <p>This exposure allowed me to develop a viscerally positive reaction to skiing. Somehow, I am filled with raw happiness when I float on powder. It stems from an odd mix of seemingly contradictory emotions: the adrenaline rush that comes from navigating tight trees on a steep slope, the natural grace and beauty of the surroundings, and the Zen-like serenity and peace of the entire experience.</p> <p>As adult life started interfering with skiing, I traded off quantity of skiing with quality. I now go heliskiing every year during the last week of January in the Revelstoke area known for the best tree skiing in the world. My last trip two weeks ago was particularly epic as you can see and hear from my screams of delight below.</p> <p><iframe loading="lazy" width="1280" height="720" src="https://www.youtube.com/embed/u_i48xje9CM?rel=0" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen=""></iframe></p> <p>As an aside, I’ve had amazing experiences with all operators but have been most impressed with <a href="https://www.kingfisherheli.com/" rel="noopener noreferrer" target="_blank">Kingfisher</a>. They have a huge tenure. Their lodge is a 7-minute flight from Kelowna airport avoiding the typical 5+ hour bus trips from Calgary or Kelowna. We are only 3 guests per Astar B3 helicopter with a lead and tail guide. They listen to feedback and build out the program to our specifications.</p> <p>I should also mention how impressed I am with Go Pro Quik video editing software on the iPhone (though not the PC version which I found clunky). It takes content from all sources, not just Go Pro photos and videos, and is a rare combination of powerful yet very easy to use. I made the video above in around 1 hour.</p>

<p>I am very grateful my parents introduced me to skiing when I was young and that I was &hellip; <a href="https://fabricegrinda.com/a-week-in-paradise-snow-20-below/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;A Week in Paradise: Snow &#038; 20 Below :)&#8221;</span></a></p>

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A Week in Paradise: Snow &#038; 20 Below :). Categories - Travels. Date-Posted - 2019-02-12T16:05:17 . I am very grateful my parents introduced me to skiing when I was young and that I was able to practice it extensively growing up. It’s a little-known fact that there are amazing ski resorts less than 90 minutes from my hometown in Nice (France), a town usually associated with beach vacations. This exposure allowed me to develop a viscerally positive reaction to skiing. Somehow, I am filled with raw happiness when I float on powder. It stems from an odd mix of seemingly contradictory emotions: the adrenaline rush that comes from navigating tight trees on a steep slope, the natural grace and beauty of the surroundings, and the Zen-like serenity and peace of the entire experience. As adult life started interfering with skiing, I traded off quantity of skiing with quality. I now go heliskiing every year during the last week of January in the Revelstoke area known for the best tree skiing in the world. My last trip two weeks ago was particularly epic as you can see and hear from my screams of delight below. As an aside, I’ve had amazing experiences with all operators but have been most impressed with Kingfisher. They have a huge tenure. Their lodge is a 7-minute flight from Kelowna airport avoiding the typical 5+ hour bus trips from Calgary or Kelowna. We are only 3 guests per Astar B3 helicopter with a lead and tail guide. They listen to feedback and build out the program to our specifications. I should also mention how impressed I am with Go Pro Quik video editing software on the iPhone (though not the PC version which I found clunky). It takes content from all sources, not just Go Pro photos and videos, and is a rare combination of powerful yet very easy to use. I made the video above in around 1 hour.

2019-01-28T15:25:12

2019-01-28T15:25:12

https://fabricegrinda.com/?p=9648

2022-03-29T08:38:46

2022-03-29T08:38:46

fj-labs-2018-year-in-review

publish

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https://fabricegrinda.com/fj-labs-2018-year-in-review/

FJ LABS 2018 Year in Review

<p></p> <p></p> <p></p><center><img loading="lazy" decoding="async" class="alignnone size-full wp-image-12460" src="https://fabricegrinda.com/wp-content/uploads/2019/01/Artboard-–-3.png" alt="" width="1800" height="8980" srcset="https://fabricegrinda.com/wp-content/uploads/2019/01/Artboard-–-3.png 1800w, https://fabricegrinda.com/wp-content/uploads/2019/01/Artboard-–-3-768x3831.png 768w, https://fabricegrinda.com/wp-content/uploads/2019/01/Artboard-–-3-308x1536.png 308w, https://fabricegrinda.com/wp-content/uploads/2019/01/Artboard-–-3-1200x5987.png 1200w, https://fabricegrinda.com/wp-content/uploads/2019/01/Artboard-–-3-1320x6585.png 1320w" sizes="(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 1362px) 62vw, 840px" /></center><p></p>

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FJ LABS 2018 Year in Review. Categories - Entrepreneurship, FJ Labs. Date-Posted - 2019-01-28T15:25:12 .

2019-01-15T14:55:41

2019-01-15T14:55:41

https://fabricegrinda.com/?p=9605

2023-11-10T05:38:56

2023-11-10T05:38:56

2018-giving-up-and-moving-on

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post

https://fabricegrinda.com/2018-giving-up-and-moving-on/

2018: Giving Up and Moving On

<p>The title reflects my most important life lesson of 2018: I gave up and moved from two personally important projects I pursued for the last 6 years. Back in 2012, while I was still CEO of OLX, I wrote myself a long email considering whether I should leave OLX, and if so, what I should do next. I shared this email in a blog post entitled A framework for making important decisions: <a href="https://fabricegrinda.com/a-framework-for-making-important-decisions-step-1-3/" target="_blank" rel="noopener noreferrer">Step 1 of 4</a>. In the subsequent years, I pursued many of the ideas on the list as I will detail in Step 3 of 4 in an upcoming blog post.</p> <p>Pursuing these opportunities led me down different rabbit holes. That said, the two projects I spent the most time and money on were trying to build a kind of Necker Island 2.0 in Cabarete in the Dominican Republic, a project called La Boca, and a new real time strategy game called Age of Nations.</p> <p>Both were love projects. I spent some time with Richard Branson on <a href="https://www.virginlimitededition.com/en/necker-island" target="_blank" rel="noopener noreferrer">Necker Island</a> back in 2013. I absolutely loved it, and felt I could build a much less expensive, larger and more modern version of it which could also serve as a tech accelerator and incubator for cash starved entrepreneurs to start their startups. After careful analysis, I chose to build it in Cabarete (read <a href="https://fabricegrinda.com/why-i-chose-cabarete/" target="_blank" rel="noopener noreferrer">Why I chose Cabarete</a>) and started going down the path of making my project a reality. I bought over 150 acres of land on the beach, hired the best architects and designers to build a project that would be completely off grid and eco-friendly on less than 8% of the land.</p> <center><img loading="lazy" decoding="async" class="alignnone size-full wp-image-9607" src="https://fabricegrinda.com/wp-content/uploads/2019/01/Group.png" alt="" width="906" height="502"></center> <p>&nbsp;</p> <p>We even built a few startups from an improvised space in the meantime (read <a href="https://fabricegrinda.com/silicon-cabarete-mvp/" target="_blank" rel="noopener noreferrer">Silicon Cabarete MVP</a>). I bought land and built houses for all my Dominican staff. I became the largest local donor to <a href="http://www.dominicandream.org/" target="_blank" rel="noopener noreferrer">DREAM project</a> funding the education of 10,000 kids and built a tech center for the kids to have access to the Internet. Despite the support of most of the local community, the combination of corruption, ever changing requirements and the opposition of a few local expats meant that after 6 years and millions of dollars invested, I had nothing to show for my efforts. I made a last-ditch effort to get the project irrevocably approved as you can see in the presentation below.</p> <p>&nbsp;</p> <div id="wppdfemb-frame-container-13682"><iframe id="wppdf-emb-iframe-13682" scrolling="no" data-pdf-index="7" class="pdfembed-iframe nonfullscreen" style="border: none; width:100%; max-width: 100%; min-height: 1000px;" src="https://fabricegrinda.com?pdfID=13682&#038;url=https%3A%2F%2Ffabricegrinda.com%2Fwp-content%2Fuploads%2F2019%2F01%2FGiving-Up-and-Moving-On.pdf&#038;index=7" ></iframe></div> <p>Sadly, while I kept getting assurances that they would approve the project, there were no irrevocable guarantees. It felt like more of the same where I would get some approvals only to have them move the goalpost in terms of what they required. As we had not yet been allowed to lay a single brick, I decided the time had come to move on. It was emotionally painful, but I pulled the plug and sold the land.</p> <p>I also stopped the development of Age of Nations. I have been obsessed with real time strategy games ever since their introduction with <a href="https://en.wikipedia.org/wiki/Dune_2" target="_blank" rel="noreferrer noopener">Dune 2</a>. The genre was then expanded and bettered by&nbsp;<a href="http://en.wikipedia.org/wiki/Warcraft" target="_blank" rel="noreferrer noopener">Warcraft</a>&nbsp;(II especially),&nbsp;<a href="https://en.wikipedia.org/wiki/Command_%26_Conquer" target="_blank" rel="noreferrer noopener">Command &amp; Conquer</a>,&nbsp;<a href="https://en.wikipedia.org/wiki/Age_of_Empires" target="_blank" rel="noreferrer noopener">Age of Empires</a>&nbsp;and&nbsp;<a href="https://en.wikipedia.org/wiki/Rise_of_Nations" target="_blank" rel="noreferrer noopener">Rise of Nations</a>, especially since they brought multiplayer gaming. By 2013, I felt that PC gaming was in decline (read <a href="https://fabricegrinda.com/the-rise-and-fall-of-pc-gaming/" target="_blank" rel="noreferrer noopener">The Rise and Fall of PC Gaming</a>) and that no new interesting real time strategy game had been introduced other than <a href="http://www.companyofheroes.com" target="_blank" rel="noreferrer noopener">Company of Heroes</a>. I yearned to build a next generation real time strategy game that combining the strategic decision making you find in games like Age of Empires and Rise of Nations (but abstracting the tediousness of their resource management) with the tactical unit control you find in Company of Heroes 2. I also toyed with the idea of adding a meta-layer with a persistent universe with clans where the gameplay when territories are contested happens to be in the Age of Nations game session.</p> <p class="has-text-align-center">I tried to buy the IP for Rise of Nations when it went on sale, but failing to acquire it, I hired development team to build my own game: Age of Nations. We built a really nice alpha version that spanned two ages (Napoleonic &amp; WW1), had city building and resource management, 2-4 person multiplayer and all the key game mechanics: cover, flanking, elevation, retreating, healing, special unit abilities, resource management and victory points.</p> <p class="has-text-align-center"><img loading="lazy" decoding="async" class="aligncenter" src="https://fabricegrinda.com/wp-content/uploads/2019/01/Group4.png" alt="" width="904" height="502"></p> <p>&nbsp;</p> <p>Unfortunately, even to get to that point took a lot longer and cost a lot more than expected. I realized that to build the game I wanted to build would cost a lot more money and take a lot longer. I tried to raise money for it through an ICO and looked for publishers, but after years of effort and much more invested than I had intended I also pulled the plug. Now my hopes rely on <a href="https://www.linkedin.com/in/quinn-duffy/" target="_blank" rel="noreferrer noopener">Quinn Duffy</a> &amp; <a href="https://www.relic.com/" target="_blank" rel="noreferrer noopener">Relic Entertainment</a>, game designer and developer of Company of Heroes whom I hope will build an amazing <a href="https://www.ageofempires.com/games/age-of-empires-iv/" target="_blank" rel="noreferrer noopener">Age of Empires 4</a>.</p> <p>Both projects had the commonality of not being commercial in nature. I just wanted them to exist. I thought they could be built as side projects. Ultimately, I realized that I could make either or both projects come to fruition, but that I would have to dedicate all my time to them. In the case of La Boca, it would have involved spending time on a recurring basis with the key stakeholders. I would have needed to hang out with the mayor of Cabarete, take the ministers of environment and tourism to dinner, fund various political campaigns and generally be much more involved.</p> <p>That was never my intent. Building and investing in startups has much greater societal impact and is a much greater source of meaning. As such, I did not allocate that much time to the project especially considering I did not care for the nature of the work required. I also realized that the rules of the offline world are much more onerous and subject to arbitrary changes than in the online world. For instance, I did not need government approval to build OLX, but would have had to get a government license if I had wanted to become a hair dresser. Needing approval from third parties inherently leads to lower probability outcomes.</p> <p>The conclusion is not to abandon pursuing projects that require third parties to approve them, but to set clearer milestones of success and use clear maximum budgets and deadlines. Had I been more rigorous on that front, I would have pulled the plug on both projects years earlier.</p> <p>I also learned to outsource many of these frustrating seemingly nonsensical offline interactions for my personal sanity. For instance, all communications with the board of my building in New York go through my real estate lawyer. It’s significantly more expensive, but best for all parties as I easily get annoyed by the ridiculous rules and bureaucracy created by people who want to have the illusion of power and importance.</p> <p>It took a while to sell La Boca, but once I gave up and moved on from both projects, an emotional and financial burden was lifted. It also eliminated a massive time sink. This allowed me to have an amazing year on both the personal and professional fronts. I started playing tennis again, started writing more and did tons of adventure travel.</p> <p>Highlights were:</p> <ul> <li>Skiing in Niseko, Hokkaido for the first time and discovering the amazing snow there</li> <li>Heliskiing with Kingfisher, an amazing new heli operator, near Kelowna</li> <li>Exploring Cape Town while staying in a gorgeous <a href="http://www.saota.com" target="_blank" rel="noreferrer noopener">SAOTA</a> house</li> <li>Frolicking on <a href="https://www.north-island.com/" target="_blank" rel="noopener">North Island</a> in Seychelles</li> <li>Exploring Moscow</li> <li>Visiting Florence for the first time</li> <li>Hiking Mount Moosilauke near Dartmouth</li> <li>Boating around Corsica</li> <li>Hiking and biking in Cinque Terre and around Lake Como</li> <li>Hiking Antelope Canyon</li> <li>Going the radical self-reliance route by self-camping at Burning Man</li> <li>Hanging out with friends and family in Punta Cana</li> <li>Discovering the street art of Mexico City</li> <li>Visiting Turks &amp; Caicos for the first time</li> <li>Exploring Cartagena and Las Islas</li> <li>Playing Nathan Drake / Indiana Jones trekking in the rainforest of Guyana</li> <li>Partaking in the insane festivities of Suriname for New Year</li> </ul> <p class="has-text-align-center"><img decoding="async" class="aligncenter" src="https://fabricegrinda.com/wp-content/uploads/2019/01/Group7.jpg" alt="" width="453"></p> <p class="has-text-align-center">I also spent a lot of time visiting my family in Nice. It felt amazing to be back in my hometown enjoying the amazing food and playing tons of padel. I met my nephew Edouard for the first time.<img decoding="async" class="aligncenter" src="https://fabricegrinda.com/wp-content/uploads/2019/01/Group-nice.png" alt="" width="800"></p> <p>FJ Labs continued to rock. In 2018, the team grew to 19 people. We deployed $53M. We made 128 investments, 97 first time investments and 31 follow-on investments. We had 31 exits, of which 16 were successful including the <a href="https://fabricegrinda.com/better-lucky-than-good/" target="_blank" rel="noreferrer noopener">acquisition of Gram Games by Zynga</a>, and the IPOs of Spotify and Farfetch. I was also named the <a href="https://fabricegrinda.com/forbes-just-named-me-the-1-angel-investor-in-the-world/" target="_blank" rel="noreferrer noopener">#1 Angel Investor in the world by Forbes</a>!</p> <p class="has-text-align-center">Since our inception, we invested in 475 unique companies, had 169 exits (including partial exits where we more than recouped our cost basis), and currently have 354 active investments. We’ve had realized returns of 61% IRR and a 4.4x average multiple.<img decoding="async" class="aligncenter" src="https://fabricegrinda.com/wp-content/uploads/2019/01/FJ-Labs-2018.png" alt="" width="800"></p> <p>I gave a keynote at the marketplace and classifieds conference in Miami on lessons learned building marketplaces. I shared our current thesis and framework for both making investment decisions and deciding which new marketplace to build.</p> <div id="wppdfemb-frame-container-13683"><iframe id="wppdf-emb-iframe-13683" scrolling="no" data-pdf-index="8" class="pdfembed-iframe nonfullscreen" style="border: none; width:100%; max-width: 100%; min-height: 1000px;" src="https://fabricegrinda.com?pdfID=13683&#038;url=https%3A%2F%2Ffabricegrinda.com%2Fwp-content%2Fuploads%2F2019%2F01%2F2018-giving-up.pdf&#038;index=8" ></iframe></div> <p>I also shared a lot of my entrepreneurial lessons learned in a series of podcasts and video interviews:</p> <ul> <li><a href="https://fabricegrinda.com/42-questions-fabrice-grinda-fj-labs/" target="_blank" rel="noreferrer noopener">42 Questions with Fabrice Grinda of FJ Labs</a></li> <li>Fun “<a href="https://fabricegrinda.com/fun-ask-me-anything-conversation-with-heidi-moore/" target="_blank" rel="noreferrer noopener">Ask Me Anything</a>” conversation with Heidi Moore</li> <li><a href="https://fabricegrinda.com/fun-podcast-in-french-covering-my-nerdy-youth-and-much-more/" target="_blank" rel="noreferrer noopener">Fun podcast in French covering my nerdy youth and much more!</a></li> <li>Fabrice Grinda: Lay Out The Options</li> <li><a href="https://fabricegrinda.com/far-ranging-and-fun-podcast-with-meb-faber/" target="_blank" rel="noreferrer noopener">Far ranging and fun podcast with Meb Faber</a></li> <li><a href="https://fabricegrinda.com/great-interview-podcast-in-forbes-with-alejandro-cremades/" target="_blank" rel="noreferrer noopener">Great Interview &amp; Podcast in Forbes</a> with Alejandro Cremades</li> </ul> <p>I did not write as much I as I wanted to in 2018 but was able to start restart writing long form thoughtful pieces at the end of the year starting with the framework for making important decisions in life. I published the first two steps and intend to write the next two in 2019 as well as a blog post on the current meaning of my life and my thoughts in the state of venture capital.</p> <p>My best blog posts of 2018 were:</p> <ul> <li><a href="https://fabricegrinda.com/a-framework-for-making-important-decisions-step-1-3/" target="_blank" rel="noreferrer noopener">A framework for making important decisions: Step 1 of 4</a></li> <li><a href="https://fabricegrinda.com/a-framework-for-making-important-decisions-step-2-4/" target="_blank" rel="noreferrer noopener">A framework for making important decisions: Step 2 of 4</a></li> <li><a href="https://fabricegrinda.com/better-lucky-than-good/" target="_blank" rel="noreferrer noopener">Better lucky than good!</a></li> <li><a href="https://fabricegrinda.com/hacked-cryptocurrencies-stolen/" target="_blank" rel="noreferrer noopener">How I was hacked, and all my cryptocurrencies were stolen!</a></li> </ul> <p>My economic predictions for 2018 were correct: the US economy did well, blue collar workers finally saw an improvement in their lot, and tech remained the sector to be in. 2019 is harder to predict. Should the expansion continue until July, it will be the longest expansion on record. We are late in the economic cycle and there are there are several trouble spots:</p> <ul> <li>The world is more indebted today than it was before the start of the global financial crisis: global debt Is 217% of GDP at the end of 2017, up more than 20% from 2007.</li> <li>Emerging market debt is 50% higher making these countries particularly vulnerable to a rise in interest rate, especially in the US as much of their debt is dollar denominated.</li> <li>The trade war with China might exacerbate inflationary pressures in the US and may lead the Fed to tighten quicker than expected.</li> <li>Global economies are no longer in a synchronized upswing.</li> </ul> <p>That said, the US economy is still doing well. We are at full employment. The fiscal stimulus will continue to put a tailwind on the economy in 2019. Baring a black swan, which is sadly possible given the geopolitical tensions created by the current slew of world &#8220;leaders,&#8221; the US economy should continue to grow in 2019. My analysis is that the largest risk to the world economy is a budget crisis in Italy. It would put the Euro project at risk and lead to a massive flight to safety, creating the next global recession.</p> <p>Despite the significant drop in the valuations of the top publicly traded technology companies, I remain bullish on early stage venture capital. Late stage funds like Softbank, Sequoia and Insight recently closed multi-billion-dollar funds. They will be putting the capital to work in the next few years. If ultimate exit valuations prove disappointing in 2-3 years, they may have more difficulty raising their next funds, but in the meantime Seed and Series A funded startups will have access to plenty of capital. The technology sector remains the engine of productivity and economic growth and will continue to do well in 2019.</p> <p>Happy new year!</p>

<p>The title reflects my most important life lesson of 2018: I gave up and moved from two personally &hellip; <a href="https://fabricegrinda.com/2018-giving-up-and-moving-on/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;2018: Giving Up and Moving On&#8221;</span></a></p>

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2018: Giving Up and Moving On. Categories - Featured Posts, Year in Review, Personal Musings, Year in Review. Date-Posted - 2019-01-15T14:55:41 . The title reflects my most important life lesson of 2018: I gave up and moved from two personally important projects I pursued for the last 6 years. Back in 2012, while I was still CEO of OLX, I wrote myself a long email considering whether I should leave OLX, and if so, what I should do next. I shared this email in a blog post entitled A framework for making important decisions: Step 1 of 4. In the subsequent years, I pursued many of the ideas on the list as I will detail in Step 3 of 4 in an upcoming blog post. Pursuing these opportunities led me down different rabbit holes. That said, the two projects I spent the most time and money on were trying to build a kind of Necker Island 2.0 in Cabarete in the Dominican Republic, a project called La Boca, and a new real time strategy game called Age of Nations. Both were love projects. I spent some time with Richard Branson on Necker Island back in 2013. I absolutely loved it, and felt I could build a much less expensive, larger and more modern version of it which could also serve as a tech accelerator and incubator for cash starved entrepreneurs to start their startups. After careful analysis, I chose to build it in Cabarete (read Why I chose Cabarete) and started going down the path of making my project a reality. I bought over 150 acres of land on the beach, hired the best architects and designers to build a project that would be completely off grid and eco-friendly on less than 8% of the land. &nbsp; We even built a few startups from an improvised space in the meantime (read Silicon Cabarete MVP). I bought land and built houses for all my Dominican staff. I became the largest local donor to DREAM project funding the education of 10,000 kids and built a tech center for the kids to have access to the Internet. Despite the support of most of the local community, the combination of corruption, ever changing requirements and the opposition of a few local expats meant that after 6 years and millions of dollars invested, I had nothing to show for my efforts. I made a last-ditch effort to get the project irrevocably approved as you can see in the presentation below. &nbsp; Sadly, while I kept getting assurances that they would approve the project, there were no irrevocable guarantees. It felt like more of the same where I would get some approvals only to have them move the goalpost in terms of what they required. As we had not yet been allowed to lay a single brick, I decided the time had come to move on. It was emotionally painful, but I pulled the plug and sold the land. I also stopped the development of Age of Nations. I have been obsessed with real time strategy games ever since their introduction with Dune 2. The genre was then expanded and bettered by&nbsp;Warcraft&nbsp;(II especially),&nbsp;Command &amp; Conquer,&nbsp;Age of Empires&nbsp;and&nbsp;Rise of Nations, especially since they brought multiplayer gaming. By 2013, I felt that PC gaming was in decline (read The Rise and Fall of PC Gaming) and that no new interesting real time strategy game had been introduced other than Company of Heroes. I yearned to build a next generation real time strategy game that combining the strategic decision making you find in games like Age of Empires and Rise of Nations (but abstracting the tediousness of their resource management) with the tactical unit control you find in Company of Heroes 2. I also toyed with the idea of adding a meta-layer with a persistent universe with clans where the gameplay when territories are contested happens to be in the Age of Nations game session. I tried to buy the IP for Rise of Nations when it went on sale, but failing to acquire it, I hired development team to build my own game: Age of Nations. We built a really nice alpha version that spanned two ages (Napoleonic &amp; WW1), had city building and resource management, 2-4 person multiplayer and all the key game mechanics: cover, flanking, elevation, retreating, healing, special unit abilities, resource management and victory points. &nbsp; Unfortunately, even to get to that point took a lot longer and cost a lot more than expected. I realized that to build the game I wanted to build would cost a lot more money and take a lot longer. I tried to raise money for it through an ICO and looked for publishers, but after years of effort and much more invested than I had intended I also pulled the plug. Now my hopes rely on Quinn Duffy &amp; Relic Entertainment, game designer and developer of Company of Heroes whom I hope will build an amazing Age of Empires 4. Both projects had the commonality of not being commercial in nature. I just wanted them to exist. I thought they could be built as side projects. Ultimately, I realized that I could make either or both projects come to fruition, but that I would have to dedicate all my time to them. In the case of La Boca, it would have involved spending time on a recurring basis with the key stakeholders. I would have needed to hang out with the mayor of Cabarete, take the ministers of environment and tourism to dinner, fund various political campaigns and generally be much more involved. That was never my intent. Building and investing in startups has much greater societal impact and is a much greater source of meaning. As such, I did not allocate that much time to the project especially considering I did not care for the nature of the work required. I also realized that the rules of the offline world are much more onerous and subject to arbitrary changes than in the online world. For instance, I did not need government approval to build OLX, but would have had to get a government license if I had wanted to become a hair dresser. Needing approval from third parties inherently leads to lower probability outcomes. The conclusion is not to abandon pursuing projects that require third parties to approve them, but to set clearer milestones of success and use clear maximum budgets and deadlines. Had I been more rigorous on that front, I would have pulled the plug on both projects years earlier. I also learned to outsource many of these frustrating seemingly nonsensical offline interactions for my personal sanity. For instance, all communications with the board of my building in New York go through my real estate lawyer. It’s significantly more expensive, but best for all parties as I easily get annoyed by the ridiculous rules and bureaucracy created by people who want to have the illusion of power and importance. It took a while to sell La Boca, but once I gave up and moved on from both projects, an emotional and financial burden was lifted. It also eliminated a massive time sink. This allowed me to have an amazing year on both the personal and professional fronts. I started playing tennis again, started writing more and did tons of adventure travel. Highlights were: Skiing in Niseko, Hokkaido for the first time and discovering the amazing snow there Heliskiing with Kingfisher, an amazing new heli operator, near Kelowna Exploring Cape Town while staying in a gorgeous SAOTA house Frolicking on North Island in Seychelles Exploring Moscow Visiting Florence for the first time Hiking Mount Moosilauke near Dartmouth Boating around Corsica Hiking and biking in Cinque Terre and around Lake Como Hiking Antelope Canyon Going the radical self-reliance route by self-camping at Burning Man Hanging out with friends and family in Punta Cana Discovering the street art of Mexico City Visiting Turks &amp; Caicos for the first time Exploring Cartagena and Las Islas Playing Nathan Drake / Indiana Jones trekking in the rainforest of Guyana Partaking in the insane festivities of Suriname for New Year I also spent a lot of time visiting my family in Nice. It felt amazing to be back in my hometown enjoying the amazing food and playing tons of padel. I met my nephew Edouard for the first time. FJ Labs continued to rock. In 2018, the team grew to 19 people. We deployed $53M. We made 128 investments, 97 first time investments and 31 follow-on investments. We had 31 exits, of which 16 were successful including the acquisition of Gram Games by Zynga, and the IPOs of Spotify and Farfetch. I was also named the #1 Angel Investor in the world by Forbes! Since our inception, we invested in 475 unique companies, had 169 exits (including partial exits where we more than recouped our cost basis), and currently have 354 active investments. We’ve had realized returns of 61% IRR and a 4.4x average multiple. I gave a keynote at the marketplace and classifieds conference in Miami on lessons learned building marketplaces. I shared our current thesis and framework for both making investment decisions and deciding which new marketplace to build. I also shared a lot of my entrepreneurial lessons learned in a series of podcasts and video interviews: 42 Questions with Fabrice Grinda of FJ Labs Fun “Ask Me Anything” conversation with Heidi Moore Fun podcast in French covering my nerdy youth and much more! Fabrice Grinda: Lay Out The Options Far ranging and fun podcast with Meb Faber Great Interview &amp; Podcast in Forbes with Alejandro Cremades I did not write as much I as I wanted to in 2018 but was able to start restart writing long form thoughtful pieces at the end of the year starting with the framework for making important decisions in life. I published the first two steps and intend to write the next two in 2019 as well as a blog post on the current meaning of my life and my thoughts in the state of venture capital. My best blog posts of 2018 were: A framework for making important decisions: Step 1 of 4 A framework for making important decisions: Step 2 of 4 Better lucky than good! How I was hacked, and all my cryptocurrencies were stolen! My economic predictions for 2018 were correct: the US economy did well, blue collar workers finally saw an improvement in their lot, and tech remained the sector to be in. 2019 is harder to predict. Should the expansion continue until July, it will be the longest expansion on record. We are late in the economic cycle and there are there are several trouble spots: The world is more indebted today than it was before the start of the global financial crisis: global debt Is 217% of GDP at the end of 2017, up more than 20% from 2007. Emerging market debt is 50% higher making these countries particularly vulnerable to a rise in interest rate, especially in the US as much of their debt is dollar denominated. The trade war with China might exacerbate inflationary pressures in the US and may lead the Fed to tighten quicker than expected. Global economies are no longer in a synchronized upswing. That said, the US economy is still doing well. We are at full employment. The fiscal stimulus will continue to put a tailwind on the economy in 2019. Baring a black swan, which is sadly possible given the geopolitical tensions created by the current slew of world &#8220;leaders,&#8221; the US economy should continue to grow in 2019. My analysis is that the largest risk to the world economy is a budget crisis in Italy. It would put the Euro project at risk and lead to a massive flight to safety, creating the next global recession. Despite the significant drop in the valuations of the top publicly traded technology companies, I remain bullish on early stage venture capital. Late stage funds like Softbank, Sequoia and Insight recently closed multi-billion-dollar funds. They will be putting the capital to work in the next few years. If ultimate exit valuations prove disappointing in 2-3 years, they may have more difficulty raising their next funds, but in the meantime Seed and Series A funded startups will have access to plenty of capital. The technology sector remains the engine of productivity and economic growth and will continue to do well in 2019. Happy new year!

2018-12-10T16:21:26

2018-12-10T16:21:26

https://fabricegrinda.com/?p=9569

2023-11-17T13:39:11

2023-11-17T13:39:11

a-framework-for-making-important-decisions-step-2-4

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https://fabricegrinda.com/a-framework-for-making-important-decisions-step-2-4/

A framework for making important decisions: Step 2/4

<p>The process of putting your thoughts on paper is useful as it crystalizes your thinking and may allow your subconscious mind to come up with the right answer in the days, weeks and months following your email to yourself. Step 2 allows you to further refine your thoughts and accelerate the process of coming up with the right answer for you.</p> <p><strong>Step 2: Get your close friends, mentors and advisers’ opinion</strong></p> <p>The email to yourself is a great starting point for a productive conversation. I send it to my friends, mentors and advisors and ask them to tell me what they would do if they were me and what they would do if they had to make the decision.</p> <p>Many of these conversations happen in person, but I found that some of the most productive ones happened iteratively via emails with my more thoughtful friends. Honestly their advice has rarely turned out to be directly applicable or useful given how different we are as individuals and in terms of what motivates us. However, the iterative process of talking through the various is options is tremendously helpful. It helps us consider angles we had not reflected on, narrow down options and generally further our thoughts.</p> <p>In my case the most useful conversations have been with my friend Ben Lee whom I met at Princeton. He’s extremely introspective and thoughtful and I highly value his insights and questions.</p> <p>Here are a few examples of our interactions color coded for the sake of clarity. They are far from exhaustive because we would reply on top of replies dozens of times for many of the individual points leading to real depth and analysis but give you a sense for what we discuss. My comments are in red.</p> <p><strong>From:</strong> Fabrice Grinda<br /> <strong>Sent:</strong> Saturday, August 4, 2012 7:16 AM<br /> <strong>To:</strong> Benjamin Lee<br /> <strong>Subject:</strong> RE: Thoughts on what I should do next with my life&#8230;</p> <p style="color: #ff0000;">Comments below.</p> <p>On Mon, Jul 30, 2012 at 11:21 PM, Fabrice Grinda wrote:</p> <p><strong>1. Leave OLX </strong></p> <p>In terms of tax optimization is London is that good in terms of taxes? I thought Branson tries hard to keep his companies out of there? Btw, you are still a French citizen?</p> <p style="color: #ff0000;">I am still a French citizen. London is not great for British citizens or for people who earn their income in the UK. No country is great for US citizens or green card holder because they must pay US taxes on their global income no matter where they live. However, the US is one of the only countries to impose that. Citizens of all other countries pay taxes where they live. As I have been a US tax resident for the past 20 years, I pay US taxes on my global income the same way an American would which amounts to something around $25 million for the past few years.</p> <p style="color: #ff0000;">The UK is great for French citizens. The UK taxes your income in the UK at 45%, but your income outside of the UK is not taxed. Given that most of my income comes from the sale of non-UK startups, I would have paid a maximum of $1 million in taxes over the same period. It’s a HUGE difference.</p> <p style="color: #ff0000;">Now, I love New York and the opportunities that the US has given me, so I don’t mind paying some taxes. The issue is that I foresee tax rates on people like me only going up in the future in the US. I don’t mind paying 25%, but I am not keen to pay 50%. When I started capital gains taxes were 15% federal + 7% New York State + a 3% New York City. Now it’s 19.6% + 9% + 4% and going up… That’s why I never got a green card. I wanted the option of leaving to remain open. In the case of my put on my remaining OLX shares for instance, if I lived in London when I exercised it, I would pay 0% / $0 on the proceeds of the sale.</p> <p style="color: #ff0000;">Given my lifestyle choices where I spend so much time on the road, I actually could already qualify as a non-US taxpayer. I just think it’s fair for me to be paying US taxes while I am notionally based here. We’ll see going forward. That said I have no intention of living my life to maximize my after-tax returns. I just want to maximize my productivity, happiness and wellbeing.</p> <p><strong>2. Try to convince Craigslist to let me run them</strong></p> <p>I would think this to be highly unlikely. Buckmeister is a fan of Chomsky. If he does even the slightest bit of background checking on you, he&#8217;ll hate your guts. Unless you can somehow bypass Buckmeister, you have no chance whatsoever.</p> <p style="color: #ff0000;">Possibly but Craig refuses to engage on anything business related and just tells me to “speak with Jim” so there is no choice. I realize that Jim and I are fundamentally different, but that does not mean I could not help save / transform / grow their business which he may appreciate. The issue is that I suspect he does not care about the business. Anyway, we’ll see. Shockingly no one in my network seems to know Jim. He’s not on Linkedin. He has not tweeted in years and he did not reply to my email…</p> <p><strong>3. Try to extract the non-strategic countries out of OLX to have a dividend stream + try the classifieds 3.0 strategy</strong></p> <p>This sounds interesting, but what is Classifieds 3.0? I seem to have missed that somewhere. With your references to web 3.0, do you mean the &#8220;semantic web&#8221; which was all the rage several years back? Or are you talking about some other conceptualization of web 3.0?</p> <p style="color: #ff0000;">In terms of classifieds, it’s really something I came up with imagining a re-invention of existing sites using the latest trends and technologies in the Web writ large.</p> <ul style="color: #ff0000;"> <li style="list-style-type: none;"> <ul> <li>Have a mobile first experience based on mobile apps using the capabilities of smart phones: <ul style="list-style-type: circle;"> <li>Super simple photo-focused listing process</li> <li>Geo localizing the seller and the items</li> </ul> </li> <li>Transaction and/or advertising business models instead listing fees</li> <li>Search results organized by relevance and location in addition to posting time rather than by latest postings first</li> <li>Full transparency on the buyer and seller with forced Facebook sign ins and profile import instead of anonymity</li> <li>Built in scheduling of appointments in the case of things like baby sitters, etc.</li> <li>Optional buyer paid closed loop transactions through an escrow service where the buyer pays the site and the site pays the seller rather than free form offline transactions</li> <li>Individual rating system for those who have completed closed loop transactions</li> <li>Integrated social transparency to increase trust -&gt; you see if friends, friends of friends, classmates or fellow workers have interacted with or know the seller or buyer</li> <li>Optional pushing of your activity to the social web, especially Facebook, Twitter, Pinterest and Tumblr</li> </ul> </li> </ul> <p style="color: #ff0000;">Note that it’s important that the transaction fees be low (say 5%), optional, and paid by the buyer who choose to use the escrow service for convenience and safety. It can’t be charged to the seller otherwise they might prefer to stay on the incumbent free platforms like Craigslist despite the worse user experience.</p> <p style="color: #ff0000;">Regardless, Naspers is not quite ready for that yet. I need to continue warming them up to the idea.</p> <p><strong>4. Think through the new idea I should build or company I should run</strong></p> <p>I think a startup may be the most productive use of your time. I continue to believe you&#8217;re a better founder than angel investor. However, on the downside, I&#8217;m not sure there are as many easy ideas out there for the taking as there were during the early days of the web.</p> <p>Who got the followup email on <a href="https://www.justanswer.com/" target="_blank" rel="noopener noreferrer">justanswer.com</a>?</p> <p><span style="color: #ff0000;">We’re working on a deck, interviewing Just Answer experts, etc. Given how much money they spend we need to think through ways to increase NPS / repeat usage otherwise we won’t be able to compete effectively.</span></p> <p><strong>5. Find the next thing to incubate – possibly a Viajanet for Indonesia and South East Asia</strong></p> <p>I never understood why startups like incubators. Maybe it&#8217;s because I would never use one and would be less likely to invest in a startup that used one. If the startup founders feel they need to be in an incubator, are they really tough enough to succeed? I would guess incubated companies can be moderately successful, but I have my doubts about them hitting any home runs.</p> <p style="color: #ff0000;">Especially in more conservative societies and places where entrepreneurship is less prevalent, the incubator model has worked reasonably well because:</p> <ul style="color: #ff0000;"> <li>We remove the entire burden of fund raising from the team (and it often takes a huge % of their time)</li> <li>Given that we give them $4 million and 40% of the equity, it’s not much less than they would have had if they had raised a love money round, a seed round and a series A round plus the creation of a large option pool</li> <li>We bring the founders online expertise they don’t have, especially in customer acquisition</li> </ul> <p style="color: #ff0000;">I think this can be a $100 &#8211; $1 billion business and that I can get 10% of it in sweat equity.</p> <p><strong>6. Keep angel investing in the most interesting / attractive projects </strong></p> <p>As you know, I have limited faith in the near term future of angel investing. I know you enjoy it, and I agree that it&#8217;s a nice way to keep your ear to the ground (which is one reason I enjoy being on your angel email list).</p> <p>In terms of your angel success rate, Buffett used to say he goes around looking for the stock market equivalent of cigarette butts with one puff left in them, as people are willing to give them away. I would think angel investing has some similarity there, and that&#8217;s why you&#8217;re able to pick up companies hitting singles and doubles at a decent price. Or at least you were able to before the current insanity started.</p> <p style="color: #ff0000;">What’s interesting is that the current insanity is helping us get exits. It may not appear that way to you, but we are being much more careful. I invested significantly less this year than last year – essentially dividing my check size and the number of companies I invested in by two. I am writing a big check in Mindbody which will increase the amount invested, but it falls in a different later stage category.</p> <p>I would be cautious of trying too hard to hit home runs by investing in &#8220;crazy&#8221; ideas. Your skill set isn&#8217;t well matched, and I&#8217;m thinking it&#8217;s more likely you&#8217;ll endure a series of strike outs.</p> <p style="color: #ff0000;">I hear you. I don’t intend to do many of those.</p> <p><strong>7. Try to buy the IP for Rise of Nations</strong></p> <p>Really interesting idea. I&#8217;m not sure it will be financially worth your while, but I&#8217;m assuming your finances are sound, and it could be a really neat project to do while waiting for a new startup idea or for the angel investing world to cool down again.</p> <p style="color: #ff0000;">I have no expectation of making money on this. Also, Kickstarter is revolutionizing funding for hardware sales and I suspect will help people fund projects like this one in the future.</p> <p><strong>8. Become a credible public economic commentator </strong></p> <p>Jumping ahead for a moment, one of the major problems you may face with politics is you have a blog. In fact, I&#8217;d guess you&#8217;ve pretty much ruined your chances for any major political office already based on what you&#8217;ve already written on it to date. I&#8217;m unlikely to run for public office, but there&#8217;s a chance I may someday try to be CEO of our radiology group, and even in that role, it&#8217;ll probably be better not to have a significant &#8220;paper&#8221; trail.</p> <p>An appointed advisory position is obviously different, and the blog won&#8217;t be as much of a problem for that. However, I&#8217;m not sure how you would go about getting such a position without either going into academia or becoming the CEO of a financial institution?</p> <p style="color: #ff0000;">I wonder as well. I toyed multiple times with getting a PhD in economics at Cambridge, Princeton or Oxford. All three have “part time” programs, but I could never quite justify the opportunity cost of time. This one is more of a “nice to have” than a need to have. I will continue pontificating publicly and trying to get the word out. If it works great, but if not, not huge loss.</p> <p style="color: #ff0000;">I also wonder if it would not be healthy to make a clean break and take 6 months to a year off just to recharge and clear my mind.</p> <p>In a way, I feel like doing the rise of nations 2 project might be the perfect recharge. Yes you&#8217;d be working really hard, but on something you really like that is quite different from what you&#8217;ve been involved with before. And you never know whether something like that could end up being your greatest long term success story&#8230;</p> <p style="color: #ff0000;">That’s true! We’ll see how the bankruptcy plays out. The timing and potential bidders for the assets are still completely up in the air.</p> <p style="color: #ff0000;">Spend some time going to see my closest friends wherever they are in the world to spend quality time with them.</p> <p>I applaud the concept. I probably won&#8217;t get a chance to do something like that until the kids are much older, but I hope you do it at some point in your life regardless of what path you take next.</p> <p style="color: #ff0000;">I think I might do that anyway in the next year or two regardless of the path I take.</p> <p style="color: #ff0000;">The annoying thing from this list is that most elements depend on third parties -&gt; Rise of Nations, the put, extracting irrelevant countries from OLX and Craigslist all require someone else to agree to my idea.</p> <p style="color: #ff0000;">We’ll see how things play out in the next 6 months.</p> <p style="color: #ff0000;">Fabrice</p>

<p>The process of putting your thoughts on paper is useful as it crystalizes your thinking and may allow &hellip; <a href="https://fabricegrinda.com/a-framework-for-making-important-decisions-step-2-4/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;A framework for making important decisions: Step 2/4&#8221;</span></a></p>

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A framework for making important decisions: Step 2/4. Categories - Business Musings, Entrepreneurship, Featured Posts, How to make the most important decisions in your life, Personal Musings. Date-Posted - 2018-12-10T16:21:26 . The process of putting your thoughts on paper is useful as it crystalizes your thinking and may allow your subconscious mind to come up with the right answer in the days, weeks and months following your email to yourself. Step 2 allows you to further refine your thoughts and accelerate the process of coming up with the right answer for you. Step 2: Get your close friends, mentors and advisers’ opinion The email to yourself is a great starting point for a productive conversation. I send it to my friends, mentors and advisors and ask them to tell me what they would do if they were me and what they would do if they had to make the decision. Many of these conversations happen in person, but I found that some of the most productive ones happened iteratively via emails with my more thoughtful friends. Honestly their advice has rarely turned out to be directly applicable or useful given how different we are as individuals and in terms of what motivates us. However, the iterative process of talking through the various is options is tremendously helpful. It helps us consider angles we had not reflected on, narrow down options and generally further our thoughts. In my case the most useful conversations have been with my friend Ben Lee whom I met at Princeton. He’s extremely introspective and thoughtful and I highly value his insights and questions. Here are a few examples of our interactions color coded for the sake of clarity. They are far from exhaustive because we would reply on top of replies dozens of times for many of the individual points leading to real depth and analysis but give you a sense for what we discuss. My comments are in red. From: Fabrice Grinda Sent: Saturday, August 4, 2012 7:16 AM To: Benjamin Lee Subject: RE: Thoughts on what I should do next with my life&#8230; Comments below. On Mon, Jul 30, 2012 at 11:21 PM, Fabrice Grinda wrote: 1. Leave OLX In terms of tax optimization is London is that good in terms of taxes? I thought Branson tries hard to keep his companies out of there? Btw, you are still a French citizen? I am still a French citizen. London is not great for British citizens or for people who earn their income in the UK. No country is great for US citizens or green card holder because they must pay US taxes on their global income no matter where they live. However, the US is one of the only countries to impose that. Citizens of all other countries pay taxes where they live. As I have been a US tax resident for the past 20 years, I pay US taxes on my global income the same way an American would which amounts to something around $25 million for the past few years. The UK is great for French citizens. The UK taxes your income in the UK at 45%, but your income outside of the UK is not taxed. Given that most of my income comes from the sale of non-UK startups, I would have paid a maximum of $1 million in taxes over the same period. It’s a HUGE difference. Now, I love New York and the opportunities that the US has given me, so I don’t mind paying some taxes. The issue is that I foresee tax rates on people like me only going up in the future in the US. I don’t mind paying 25%, but I am not keen to pay 50%. When I started capital gains taxes were 15% federal + 7% New York State + a 3% New York City. Now it’s 19.6% + 9% + 4% and going up… That’s why I never got a green card. I wanted the option of leaving to remain open. In the case of my put on my remaining OLX shares for instance, if I lived in London when I exercised it, I would pay 0% / $0 on the proceeds of the sale. Given my lifestyle choices where I spend so much time on the road, I actually could already qualify as a non-US taxpayer. I just think it’s fair for me to be paying US taxes while I am notionally based here. We’ll see going forward. That said I have no intention of living my life to maximize my after-tax returns. I just want to maximize my productivity, happiness and wellbeing. 2. Try to convince Craigslist to let me run them I would think this to be highly unlikely. Buckmeister is a fan of Chomsky. If he does even the slightest bit of background checking on you, he&#8217;ll hate your guts. Unless you can somehow bypass Buckmeister, you have no chance whatsoever. Possibly but Craig refuses to engage on anything business related and just tells me to “speak with Jim” so there is no choice. I realize that Jim and I are fundamentally different, but that does not mean I could not help save / transform / grow their business which he may appreciate. The issue is that I suspect he does not care about the business. Anyway, we’ll see. Shockingly no one in my network seems to know Jim. He’s not on Linkedin. He has not tweeted in years and he did not reply to my email… 3. Try to extract the non-strategic countries out of OLX to have a dividend stream + try the classifieds 3.0 strategy This sounds interesting, but what is Classifieds 3.0? I seem to have missed that somewhere. With your references to web 3.0, do you mean the &#8220;semantic web&#8221; which was all the rage several years back? Or are you talking about some other conceptualization of web 3.0? In terms of classifieds, it’s really something I came up with imagining a re-invention of existing sites using the latest trends and technologies in the Web writ large. Have a mobile first experience based on mobile apps using the capabilities of smart phones: Super simple photo-focused listing process Geo localizing the seller and the items Transaction and/or advertising business models instead listing fees Search results organized by relevance and location in addition to posting time rather than by latest postings first Full transparency on the buyer and seller with forced Facebook sign ins and profile import instead of anonymity Built in scheduling of appointments in the case of things like baby sitters, etc. Optional buyer paid closed loop transactions through an escrow service where the buyer pays the site and the site pays the seller rather than free form offline transactions Individual rating system for those who have completed closed loop transactions Integrated social transparency to increase trust -&gt; you see if friends, friends of friends, classmates or fellow workers have interacted with or know the seller or buyer Optional pushing of your activity to the social web, especially Facebook, Twitter, Pinterest and Tumblr Note that it’s important that the transaction fees be low (say 5%), optional, and paid by the buyer who choose to use the escrow service for convenience and safety. It can’t be charged to the seller otherwise they might prefer to stay on the incumbent free platforms like Craigslist despite the worse user experience. Regardless, Naspers is not quite ready for that yet. I need to continue warming them up to the idea. 4. Think through the new idea I should build or company I should run I think a startup may be the most productive use of your time. I continue to believe you&#8217;re a better founder than angel investor. However, on the downside, I&#8217;m not sure there are as many easy ideas out there for the taking as there were during the early days of the web. Who got the followup email on justanswer.com? We’re working on a deck, interviewing Just Answer experts, etc. Given how much money they spend we need to think through ways to increase NPS / repeat usage otherwise we won’t be able to compete effectively. 5. Find the next thing to incubate – possibly a Viajanet for Indonesia and South East Asia I never understood why startups like incubators. Maybe it&#8217;s because I would never use one and would be less likely to invest in a startup that used one. If the startup founders feel they need to be in an incubator, are they really tough enough to succeed? I would guess incubated companies can be moderately successful, but I have my doubts about them hitting any home runs. Especially in more conservative societies and places where entrepreneurship is less prevalent, the incubator model has worked reasonably well because: We remove the entire burden of fund raising from the team (and it often takes a huge % of their time) Given that we give them $4 million and 40% of the equity, it’s not much less than they would have had if they had raised a love money round, a seed round and a series A round plus the creation of a large option pool We bring the founders online expertise they don’t have, especially in customer acquisition I think this can be a $100 &#8211; $1 billion business and that I can get 10% of it in sweat equity. 6. Keep angel investing in the most interesting / attractive projects As you know, I have limited faith in the near term future of angel investing. I know you enjoy it, and I agree that it&#8217;s a nice way to keep your ear to the ground (which is one reason I enjoy being on your angel email list). In terms of your angel success rate, Buffett used to say he goes around looking for the stock market equivalent of cigarette butts with one puff left in them, as people are willing to give them away. I would think angel investing has some similarity there, and that&#8217;s why you&#8217;re able to pick up companies hitting singles and doubles at a decent price. Or at least you were able to before the current insanity started. What’s interesting is that the current insanity is helping us get exits. It may not appear that way to you, but we are being much more careful. I invested significantly less this year than last year – essentially dividing my check size and the number of companies I invested in by two. I am writing a big check in Mindbody which will increase the amount invested, but it falls in a different later stage category. I would be cautious of trying too hard to hit home runs by investing in &#8220;crazy&#8221; ideas. Your skill set isn&#8217;t well matched, and I&#8217;m thinking it&#8217;s more likely you&#8217;ll endure a series of strike outs. I hear you. I don’t intend to do many of those. 7. Try to buy the IP for Rise of Nations Really interesting idea. I&#8217;m not sure it will be financially worth your while, but I&#8217;m assuming your finances are sound, and it could be a really neat project to do while waiting for a new startup idea or for the angel investing world to cool down again. I have no expectation of making money on this. Also, Kickstarter is revolutionizing funding for hardware sales and I suspect will help people fund projects like this one in the future. 8. Become a credible public economic commentator Jumping ahead for a moment, one of the major problems you may face with politics is you have a blog. In fact, I&#8217;d guess you&#8217;ve pretty much ruined your chances for any major political office already based on what you&#8217;ve already written on it to date. I&#8217;m unlikely to run for public office, but there&#8217;s a chance I may someday try to be CEO of our radiology group, and even in that role, it&#8217;ll probably be better not to have a significant &#8220;paper&#8221; trail. An appointed advisory position is obviously different, and the blog won&#8217;t be as much of a problem for that. However, I&#8217;m not sure how you would go about getting such a position without either going into academia or becoming the CEO of a financial institution? I wonder as well. I toyed multiple times with getting a PhD in economics at Cambridge, Princeton or Oxford. All three have “part time” programs, but I could never quite justify the opportunity cost of time. This one is more of a “nice to have” than a need to have. I will continue pontificating publicly and trying to get the word out. If it works great, but if not, not huge loss. I also wonder if it would not be healthy to make a clean break and take 6 months to a year off just to recharge and clear my mind. In a way, I feel like doing the rise of nations 2 project might be the perfect recharge. Yes you&#8217;d be working really hard, but on something you really like that is quite different from what you&#8217;ve been involved with before. And you never know whether something like that could end up being your greatest long term success story&#8230; That’s true! We’ll see how the bankruptcy plays out. The timing and potential bidders for the assets are still completely up in the air. Spend some time going to see my closest friends wherever they are in the world to spend quality time with them. I applaud the concept. I probably won&#8217;t get a chance to do something like that until the kids are much older, but I hope you do it at some point in your life regardless of what path you take next. I think I might do that anyway in the next year or two regardless of the path I take. The annoying thing from this list is that most elements depend on third parties -&gt; Rise of Nations, the put, extracting irrelevant countries from OLX and Craigslist all require someone else to agree to my idea. We’ll see how things play out in the next 6 months. Fabrice

2018-12-05T14:47:30

2018-12-05T14:47:30

https://fabricegrinda.com/?p=9541

2023-11-17T13:39:26

2023-11-17T13:39:26

a-framework-for-making-important-decisions-step-1-3

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https://fabricegrinda.com/a-framework-for-making-important-decisions-step-1-3/

A framework for making important decisions: Step 1/4

<p>In life there seems to be a pretty clear default path in terms of societal, parental and personal expectations: go to college, get a job, get married, have kids. In addition to the default general path, there is a default choice for each of these: continue doing whatever it is you are doing. The easiest thing to do is to stay in your current job, live in your current city, in your current apartment, with your current significant other. Time spent in a default position seems to create a momentum of its own on that position across all categories.</p> <p>The reality is that we are generally lazy and don’t take the time to question either our general life direction or the specific choices within that direction. Yet, many of these results come from happenstance or circumstance.</p> <p>The last thing we want is to wake up late in life realizing we have been running in the wrong direction. Because we are so busy living on a day-to-day basis, I find that it’s important to take the time to take a step back and be deliberately introspective about life’s major decisions. To do so I created a process and framework for making these decisions.</p> <p>After several iterations, I came up with a process.</p> <p><strong>Step 1: Assess in writing where you stand and the options available to you</strong></p> <p>We usually have a vague sense of pros and cons of various options in our mind, but I find that’s it’s extremely valuable to write them down. The process of writing down an analysis of your frame of mind helps you crystallize your thinking and make the options much more explicit.</p> <p>I typically start with an evaluation of my current mindset in the default position and weigh the pros and cons of staying in that default position. I then generally lay out a set of different paths. In doing so I found it best to follow a few rules:</p> <ul> <li>Be as open and honest with yourself as possible in terms of assessing your frame of mind</li> <li>Don’t put any limitations on the paths you could explore and force yourself to include highly unlikely and difficult things</li> <li>Don’t try to reach a conclusion in the email to yourself. Laying out the options and their pros and cons is enough. The answer will come in the following days, weeks or months</li> <li>When evaluating alternative paths be careful to imagine yourself on a typical day and not an idealized version of that path</li> </ul> <p>Sometimes there are clear points at which you should write this email to yourself because you are facing an obvious important life decision:</p> <ul> <li>You are hesitating between several jobs to take</li> <li>You are wondering whether you should propose to your girlfriend</li> <li>You are considering selling your company</li> <li>You just sold your startup and are wondering what to do next</li> </ul> <p>In a way those are the easiest times to take a step back and be introspective because there is a clear life break. However, because of the power of momentum, it’s essential to do it when there are no such obvious breaks. I would recommend doing it whenever you feel a general sense of malaise in life.</p> <p>Evaluate how happy you are in your current life relative to what you used to be or would like to be and assess if there are changes you should make. Sometimes you are not even aware of said malaise which is why it can be good to force yourself to write this assessment at artificial points in time. I either do it on my birthday or at the beginning of the new year at the very least once every other year.</p> <p>Here are a few examples I wrote to myself in different contexts. In <a href="https://fabricegrinda.com/the-power-of-introspection-and-detached-analysis/" target="_blank" rel="noopener noreferrer">The Power of Introspection and Detached Analysis</a>, I shared the email I sent myself in January 2001 when evaluating what to do after I had (badly) sold my first startup, Aucland. I was 26, the Internet bubble had burst, and it seemed liked the Internet was dead, or at least was not going to be something big. I had been at the right time, at the right place, with the right skills, and left a unique opportunity in life pass me by. I raised tens of millions in venture money and employed hundreds. I had been on the cover of every magazine and newspaper in France. I was featured on popular TV shows, and was generally publicly recognized as a disruptive entrepreneur, before it all very publicly came crashing down. I had soared to great heights and wondered what lay ahead, what path to take, and whether anything would ever feel so magical again.</p> <p>I also share below an email to myself right before my birthday in 2012. This one was written from a very different perspective. I was already a successful Internet entrepreneur and angel investor with numerous exits. I was co-founder and co-CEO of OLX. The company was super successful, an amazing platform and a tremendous source of meaning given its societal impact. I was also publicly lauded and recognized for my work. However, I could not shake the feeling that something was off. As such, I wrote myself an email laying out what seemed unimaginable, leaving a position of power, respect, meaning and opportunity, because the day to day was no longer palatable.</p> <p>&#8212;</p> <p><strong>From:</strong> Fabrice Grinda<br /> <strong>Sent:</strong> Monday, July 30, 2012 11:15 PM<br /> <strong>To:</strong> Fabrice Grinda<br /> <strong>Subject:</strong> Thoughts on what I should do next with my life&#8230;</p> <p>I have been putting some thought into where I stand in life and what I should focus on over the next year. I came up with 8 objectives.</p> <p><strong>1. Leave OLX </strong></p> <p>OLX is really the company I envisioned running for the rest of my life. It seems paradoxical to consider leaving OLX now that we have succeeded. We have hundreds of millions of unique users per month. We are the largest classified site in countless countries. We are making a meaningful difference in the lives of millions of users. Receiving thousands of love letters from users every day is a source of pride and meaning.</p> <p>I also don’t underestimate the value of having a platform with hundreds of millions of users. It’s an amazing launchpad for new verticals and ideas. Every test we do is statistically significant. Investors keep telling entrepreneurs to multivariate test everything, but the reality is that unless you have the traffic to meaningfully test everything, it’s hard to make informed decisions. With the traffic OLX has we know within an hour if an idea is going to work. With this traffic level, disruptive product change can be 1% improvements done 1,000 times over.</p> <p>So why leave? The reality is that the nature of work at OLX has changed now that we are part of a large publicly traded company. Partnering with Naspers was the right bet. When Naspers approached us in 2010, we realized that the business was essentially a natural monopoly on a national level and that we had to be absolute leaders in a few strategic countries. To withstand the onslaught of Schibsted and well-funded competitors like Quikr in India, it made sense to get the support of a deep pocketed strategic backer.</p> <p>Naspers has proven to be a fantastic acquirer. They are the very opposite of the Japanese who had acquired Zingy. They are strategic, thoughtful and incredibly aggressive. I was pleasantly surprised and sometimes downright frightened by their aggressiveness, which is saying a lot given that it’s in my nature to be very aggressive. I can say with confidence that we would not be where we are today had it not been for Naspers investing.</p> <p>We put the money they gave us to good use and won the war over the last three years but had to lose our independence to do so. While I have tremendous pride in what we have accomplished and love the recognition I get as co-founder and co-CEO, I no longer love the day to day job. When I built OLX with Alec, we never talked about who would do what. We have overlapping skills being Ivy League educated consultants and auction site CEOs and each can do the work of the other. The role split happened automatically driven by our interests, geographic location (him in Buenos Aires and me in NY) and lifestyle choices.</p> <p>I ended up overseeing the product strategy, investor relations, front line M&amp;A (identifying and reaching out to targets), business development and English PR. He took the lead on operations, post-merger integration and Spanish and Portuguese PR. We both jointly set the strategy.</p> <p>It has often been said that it’s a bad idea to have co-CEOs and work with friends, but when you can make it work it’s much more powerful. You have a level of trust that does not exist in traditional business relationships. We never argued or disagreed, and our friendship has never frayed. Likewise, I am still close friends with William and Ariel despite working with them for many years.</p> <p>Post-Naspers investing, the nature of my work started changing. I no longer had to manage investor relations. The M&amp;A and business development roles disappeared as we started focusing on organic growth. Simultaneously, we started needing to have a structure and budgeting rigor commensurate to our size, not to mention being owned by a large publicly traded company. We now must create detailed annual budgets, quarterly budgets and updates to the quarterly budget, and make sure we hit those numbers. Our decision-making process is no longer an (hopefully) enlightened dictatorship as we need to get shareholder approval for strategic initiatives.</p> <p>All that to say, that I am not loving the day-to-day. I don’t think OLX needs two co-CEOs anymore. Frankly Alec is better temperamentally suited for managing a shareholder and organization like Naspers’, while I find myself yearning for a new adventure.</p> <p>Next step: Talk to Alec and Naspers.</p> <p><strong>2. Try to convince Craigslist to let me run them </strong></p> <p>Craigslist has 30 billion page views per month. If I was running it, I could both improve content and site quality dramatically and make it relevant for the 21st century. Craigslist has the potential to be a $100+ billion company given that it has liquidity in so many valuable categories. However, as it is, it is profoundly flawed. Women are the primary decision makers in all household decisions: which house or car to buy, what babysitter to hire etc., yet Craigslist is the least female friendly site in the world.</p> <p>They should take a page from OLX and pre-moderate all content before it goes live to make the site spam and scam free. They should remove personals which make the site creepy. They should build a delightful mobile experience and redesign the site.</p> <p>They should also change their business model to replicate OLX. Classifieds are a wonderful business that can have upwards of 75% EBITDA margins and you don’t even need to charge listing fees. They charge listing fees because they are too lazy to moderate the site. For them it’s a form of spam control, but it also limits liquidity in certain categories. Even by going 100% free and hiring 1,000 people to moderate the site, I could easily make it generate several billion (yes with a b!) in profits per year.</p> <p>My pitch to Craig is as follows:</p> <ul> <li>I share your vision of providing a public service to the community</li> <li>You could be doing a much better job by improving content and site quality</li> <li>You don’t necessarily want to do the work, but I am happy to do it for free</li> <li>Just give me 3% of equity / year worked. The equity vests after 1 year so if you are not happy with my work just get rid of me on day 364 and I cost you nothing</li> </ul> <p>I had a quick chat with Craig about the future of classifieds (and did not pitch myself for the job). He told me to speak to Jim who is CEO and introduced me. I told Jim I was going to be in SF and would love to meet for a quick coffee. I was not going to be there but would have gone had he said he was available. He did not reply. I also sent him a follow-up email to which he did not reply.</p> <p>I will forward the email I sent him to which he did not reply.</p> <p>Next step: Find people who know Jim Buckmaster well and convince them to have him meet me.</p> <p><strong>3. Try to extract the non-strategic countries out of OLX to have a dividend stream + try the classifieds 3.0 strategy</strong></p> <p>Those countries generate $7.5 million in revenues and $5 million in profits per year for OLX, yet Naspers has repeatedly asked us to close them.</p> <p>They obviously don’t want me to get them for my own purposes, but I am trying to convince them that they have no real strategic value and as such we should try to build a next generation classifieds 3.0 site which is the only way to have a shot of being relevant in those countries</p> <p>To do that effectively, we would need to spin it off as it would require a complete product redesign to a mobile first (and perhaps only) experience, with a super simple photo-focused listing process with an optional buyer paid payment and escrow solution.</p> <p>Next step: Pitch the idea to Naspers in the coming months.</p> <p><strong>4. Think through the new idea I should build or company I should run</strong></p> <p>I thought long and hard about creating a VC or angel fund. The issue is that fund economics only work if you have several hundred million under management. Moreover, each fund has a 10 year life which is a huge time commitment. I tend to get restless before then. The way it would have worked would have been as follows: raise a $50 million fund, raise a follow-up multi hundred million fund in 3 years and another one 3 years later. In other words, it’s at least a 16 year commitment with a lot of administrative / boring work in terms of raising money from LPs, doing reporting, etc.</p> <p>I am also not sure it’s something I really would want to do full time. I have been meeting VCs and PE firms to discuss:</p> <ul> <li>Which of their portfolio companies I could run</li> <li>Which public companies we should take public and have me run</li> <li>What are the hot trends / companies to see if there is room for a competitor / differentiated version of the idea</li> </ul> <p>I am trying to move away from mere idea arbitrage:</p> <ul> <li>It’s harder if not impossible to build $10+ billion companies outside of the US</li> <li>I don’t really want to travel as much as I am currently traveling</li> <li>I am less effective managing a product and technology team remotely than I am when they are right next to me</li> </ul> <p>The conversations have been interesting and I was approached to be CEO of a few publicly traded companies which is ego boosting. However, there was nothing as appealing or interesting as being CEO of Craigslist.</p> <p>I explored a lot of categories in terms of new ideas to build. I spent a lot of time on 3D Printing, which will be a huge category, before deciding not to pursue it. I also considered bringing <a href="http://www.made.com" rel="noopener noreferrer" target="_blank">www.made.com</a> to the US, before also discarding this idea. I am happy to explain why in more detail.</p> <p>The one idea that has bubbled up and that we are exploring further is building a next generation version of <a href="http://www.justanswer.com" rel="noopener noreferrer" target="_blank">www.justanswer.com</a>. Shockingly the company is on a $150+ million revenue run rate. Given how much of the economy is in services and information, this has the potential to be extraordinarily big if done right. Moreover, the unit economics are nearly as good as the one in stock photography which has not proven to be a winner take all business. I will send you an email on that category.</p> <p>I am doing a lot of research right now into Just Answer: interviewing their customers and experts, trying to figure out how much liquidity they have in each category, thinking through what product improvements could be done, etc. We’ll see where I end up falling on this.</p> <p>Next step: Keep studying the model.</p> <p><strong>5. Find the next thing to incubate – possibly a Viajanet for Indonesia and South East Asia </strong></p> <p>Some of the clear lessons of the past few years of angel investing and working with Jose on incubating companies in Brazil are:</p> <ul> <li>Travel is a huge category</li> <li>Incubating a company allows you to have a disproportionate share of equity for very little</li> <li>A few companies generate most of the returns</li> </ul> <p>Based on recent market analysis, there seems to be a clear opportunity to build an Expedia for Indonesia and possibly all of South East Asia. We are currently evaluating the market:</p> <ul> <li>Interviewing CEO and cofounder candidates from various business schools and people with travel background in the region</li> <li>Talking to various travel wholesalers</li> </ul> <p>Next step: Go to Indonesia September 3-7 to meet all the potential cofounders and partners.</p> <p><strong>6. Keep angel investing in the most interesting / attractive projects</strong></p> <p>I invested in 105 companies over the last few years and evaluated over 3,000 projects. I actually loved meeting all the entrepreneurs, hearing their ideas, figuring what was hot at any given point in time. Beyond the sheer promotion of entrepreneurship which is valuable in its own right, the process is informative in terms of understanding larger trends to better decide what projects to incubate or start on my own.</p> <p>Interestingly enough, so far we seem to have been good at selecting logical projects that have earned good returns. We have the best win – loss ratio of any angel investor or VC I know with 14 wins for 7 losses. However, none of the winners have proven to be home runs. In other words, we seem to be great at picking companies with good on base percentages which hit singles, doubles and the occasional triples, but we have not been good at finding disruptive winners. In a way we are attempting to assuage this limitation by investing more in “crazy” ideas from US companies instead of just investing in international idea arbitrage businesses.</p> <p>One potential idea for scaling this part of the business might be to pitch Naspers on running a $100 million angel / series A investment fund for them should they accede to giving us a floor on the put.</p> <p>Next step: Continue meeting companies, being more vigilant about our investments given the frothy times in angel investing, yet trying to be open minded enough to increase the probability of home runs.</p> <p><strong>7. Try to buy the IP for Rise of Nations</strong></p> <p>This is more of a “love project” than anything. Rise of Nations is my favorite strategy games in the history of strategy games. It mixes the real time gameplay dynamics of Age of Empires, Warcraft, Starcraft and Command &amp; Conquer with the strategic and tactical depth of Civilization. Big Huge Games, the company that developed it, stopped focusing on this IP 9 years ago and instead started building role playing games. Their huge bet in the category recently failed and the company filed for bankruptcy in a very public scandal. There is currently a legal discussion over the jurisdiction of the case. Once it’s settled, I would like to try to find a way to buy the assets for cheap with the intent of building Rise of Nations 2. It would simply be a multiplayer version of Rise of Nations 1 with updated graphics and the tactical unit control of a game like Company of Heroes. I would try to get it funded through Kickstarter.</p> <p>Next step: Bid on the Rise of Nations IP once it’s for sale.</p> <p><strong>8. Become a credible public economic commentator </strong></p> <p>I had political ambitions growing up and still spend a lot of times interacting with people in think tanks and various thought leaders. However, I am starting to feel as much apathy, if not antipathy, for the body politic as Peter seems to feel given his comments in the New Yorker article. I agree with him that Rand type entrepreneur can have more impact on society.</p> <p>That said, post our conversation, I am starting to think that an appointed position like being on the council of economic advisors to the president would be interesting. Unfortunately, the world approves and rewards specialists rather than generalists. I get no credit for predicting the financial and real estate crisis. In order to get more visibility and improve the chances of such an appointment, I reached out to Nouriel Roubini, Paul Krugman, Niall Ferguson and Matthew Bishop (the editor in chief of the Economist for the US) asking for their ideas on how best to promote the ideas.</p> <p>I put a fair amount of thought about how to engage them to maximize the probability of a reply. Unfortunately, they have not replied yet. I will send you some of those emails.</p> <p>Next step: Keep approaching thought leaders and pitching them my ideas.</p> <p><strong>Other considerations: </strong></p> <p>Many of the 8 priorities are mutually exclusive. Should I get the CEO role at Craigslist, I would essentially drop everything else given how big that opportunity is relative to the others. In that context I would not mind completely stopping angel investing and incubating startups. I do it because I find it interesting, I love promoting entrepreneurship, meeting hungry entrepreneurs and it keeps me in the game, but I don’t find it to be as fulfilling and meaningful as doing something massive on my own.</p> <p>I also wonder if it would not be healthy to make a clean break and take 6 months to a year off just to recharge and clear my mind. It’s unclear to me if in that context I should also stop angel investing to fully disconnect, or maybe only take meetings every other week. Likewise, I have to think through whether it would be a full disconnect to focus on getting really fit playing tennis, kiting and skiing vs. focusing on intellectual pursuits – writing, partaking in intellectual conversations, reading, etc.</p> <p>I suspect “the right answer” would be a pleasant mix of all the above:</p> <ul> <li>Don’t connect at all in two week increments.</li> <li>Mix intellectual and physical pursuits.</li> <li>Spend some time going to see my closest friends wherever they are in the world to spend quality time with them.</li> <li>Make all the angel investing decisions and meetings in 1 or 2 weeks per month.</li> </ul> <p>I would probably not pursue this until my hip is fully healed so that I can make the most of my free time and until the situation regarding the put is resolved one way or another.</p> <p>What do you think?</p> <p>Fabrice</p>

<p>In life there seems to be a pretty clear default path in terms of societal, parental and personal &hellip; <a href="https://fabricegrinda.com/a-framework-for-making-important-decisions-step-1-3/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;A framework for making important decisions: Step 1/4&#8221;</span></a></p>

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A framework for making important decisions: Step 1/4. Categories - Business Musings, Entrepreneurship, Featured Posts, How to make the most important decisions in your life, Personal Musings. Date-Posted - 2018-12-05T14:47:30 . In life there seems to be a pretty clear default path in terms of societal, parental and personal expectations: go to college, get a job, get married, have kids. In addition to the default general path, there is a default choice for each of these: continue doing whatever it is you are doing. The easiest thing to do is to stay in your current job, live in your current city, in your current apartment, with your current significant other. Time spent in a default position seems to create a momentum of its own on that position across all categories. The reality is that we are generally lazy and don’t take the time to question either our general life direction or the specific choices within that direction. Yet, many of these results come from happenstance or circumstance. The last thing we want is to wake up late in life realizing we have been running in the wrong direction. Because we are so busy living on a day-to-day basis, I find that it’s important to take the time to take a step back and be deliberately introspective about life’s major decisions. To do so I created a process and framework for making these decisions. After several iterations, I came up with a process. Step 1: Assess in writing where you stand and the options available to you We usually have a vague sense of pros and cons of various options in our mind, but I find that’s it’s extremely valuable to write them down. The process of writing down an analysis of your frame of mind helps you crystallize your thinking and make the options much more explicit. I typically start with an evaluation of my current mindset in the default position and weigh the pros and cons of staying in that default position. I then generally lay out a set of different paths. In doing so I found it best to follow a few rules: Be as open and honest with yourself as possible in terms of assessing your frame of mind Don’t put any limitations on the paths you could explore and force yourself to include highly unlikely and difficult things Don’t try to reach a conclusion in the email to yourself. Laying out the options and their pros and cons is enough. The answer will come in the following days, weeks or months When evaluating alternative paths be careful to imagine yourself on a typical day and not an idealized version of that path Sometimes there are clear points at which you should write this email to yourself because you are facing an obvious important life decision: You are hesitating between several jobs to take You are wondering whether you should propose to your girlfriend You are considering selling your company You just sold your startup and are wondering what to do next In a way those are the easiest times to take a step back and be introspective because there is a clear life break. However, because of the power of momentum, it’s essential to do it when there are no such obvious breaks. I would recommend doing it whenever you feel a general sense of malaise in life. Evaluate how happy you are in your current life relative to what you used to be or would like to be and assess if there are changes you should make. Sometimes you are not even aware of said malaise which is why it can be good to force yourself to write this assessment at artificial points in time. I either do it on my birthday or at the beginning of the new year at the very least once every other year. Here are a few examples I wrote to myself in different contexts. In The Power of Introspection and Detached Analysis, I shared the email I sent myself in January 2001 when evaluating what to do after I had (badly) sold my first startup, Aucland. I was 26, the Internet bubble had burst, and it seemed liked the Internet was dead, or at least was not going to be something big. I had been at the right time, at the right place, with the right skills, and left a unique opportunity in life pass me by. I raised tens of millions in venture money and employed hundreds. I had been on the cover of every magazine and newspaper in France. I was featured on popular TV shows, and was generally publicly recognized as a disruptive entrepreneur, before it all very publicly came crashing down. I had soared to great heights and wondered what lay ahead, what path to take, and whether anything would ever feel so magical again. I also share below an email to myself right before my birthday in 2012. This one was written from a very different perspective. I was already a successful Internet entrepreneur and angel investor with numerous exits. I was co-founder and co-CEO of OLX. The company was super successful, an amazing platform and a tremendous source of meaning given its societal impact. I was also publicly lauded and recognized for my work. However, I could not shake the feeling that something was off. As such, I wrote myself an email laying out what seemed unimaginable, leaving a position of power, respect, meaning and opportunity, because the day to day was no longer palatable. &#8212; From: Fabrice Grinda Sent: Monday, July 30, 2012 11:15 PM To: Fabrice Grinda Subject: Thoughts on what I should do next with my life&#8230; I have been putting some thought into where I stand in life and what I should focus on over the next year. I came up with 8 objectives. 1. Leave OLX OLX is really the company I envisioned running for the rest of my life. It seems paradoxical to consider leaving OLX now that we have succeeded. We have hundreds of millions of unique users per month. We are the largest classified site in countless countries. We are making a meaningful difference in the lives of millions of users. Receiving thousands of love letters from users every day is a source of pride and meaning. I also don’t underestimate the value of having a platform with hundreds of millions of users. It’s an amazing launchpad for new verticals and ideas. Every test we do is statistically significant. Investors keep telling entrepreneurs to multivariate test everything, but the reality is that unless you have the traffic to meaningfully test everything, it’s hard to make informed decisions. With the traffic OLX has we know within an hour if an idea is going to work. With this traffic level, disruptive product change can be 1% improvements done 1,000 times over. So why leave? The reality is that the nature of work at OLX has changed now that we are part of a large publicly traded company. Partnering with Naspers was the right bet. When Naspers approached us in 2010, we realized that the business was essentially a natural monopoly on a national level and that we had to be absolute leaders in a few strategic countries. To withstand the onslaught of Schibsted and well-funded competitors like Quikr in India, it made sense to get the support of a deep pocketed strategic backer. Naspers has proven to be a fantastic acquirer. They are the very opposite of the Japanese who had acquired Zingy. They are strategic, thoughtful and incredibly aggressive. I was pleasantly surprised and sometimes downright frightened by their aggressiveness, which is saying a lot given that it’s in my nature to be very aggressive. I can say with confidence that we would not be where we are today had it not been for Naspers investing. We put the money they gave us to good use and won the war over the last three years but had to lose our independence to do so. While I have tremendous pride in what we have accomplished and love the recognition I get as co-founder and co-CEO, I no longer love the day to day job. When I built OLX with Alec, we never talked about who would do what. We have overlapping skills being Ivy League educated consultants and auction site CEOs and each can do the work of the other. The role split happened automatically driven by our interests, geographic location (him in Buenos Aires and me in NY) and lifestyle choices. I ended up overseeing the product strategy, investor relations, front line M&amp;A (identifying and reaching out to targets), business development and English PR. He took the lead on operations, post-merger integration and Spanish and Portuguese PR. We both jointly set the strategy. It has often been said that it’s a bad idea to have co-CEOs and work with friends, but when you can make it work it’s much more powerful. You have a level of trust that does not exist in traditional business relationships. We never argued or disagreed, and our friendship has never frayed. Likewise, I am still close friends with William and Ariel despite working with them for many years. Post-Naspers investing, the nature of my work started changing. I no longer had to manage investor relations. The M&amp;A and business development roles disappeared as we started focusing on organic growth. Simultaneously, we started needing to have a structure and budgeting rigor commensurate to our size, not to mention being owned by a large publicly traded company. We now must create detailed annual budgets, quarterly budgets and updates to the quarterly budget, and make sure we hit those numbers. Our decision-making process is no longer an (hopefully) enlightened dictatorship as we need to get shareholder approval for strategic initiatives. All that to say, that I am not loving the day-to-day. I don’t think OLX needs two co-CEOs anymore. Frankly Alec is better temperamentally suited for managing a shareholder and organization like Naspers’, while I find myself yearning for a new adventure. Next step: Talk to Alec and Naspers. 2. Try to convince Craigslist to let me run them Craigslist has 30 billion page views per month. If I was running it, I could both improve content and site quality dramatically and make it relevant for the 21st century. Craigslist has the potential to be a $100+ billion company given that it has liquidity in so many valuable categories. However, as it is, it is profoundly flawed. Women are the primary decision makers in all household decisions: which house or car to buy, what babysitter to hire etc., yet Craigslist is the least female friendly site in the world. They should take a page from OLX and pre-moderate all content before it goes live to make the site spam and scam free. They should remove personals which make the site creepy. They should build a delightful mobile experience and redesign the site. They should also change their business model to replicate OLX. Classifieds are a wonderful business that can have upwards of 75% EBITDA margins and you don’t even need to charge listing fees. They charge listing fees because they are too lazy to moderate the site. For them it’s a form of spam control, but it also limits liquidity in certain categories. Even by going 100% free and hiring 1,000 people to moderate the site, I could easily make it generate several billion (yes with a b!) in profits per year. My pitch to Craig is as follows: I share your vision of providing a public service to the community You could be doing a much better job by improving content and site quality You don’t necessarily want to do the work, but I am happy to do it for free Just give me 3% of equity / year worked. The equity vests after 1 year so if you are not happy with my work just get rid of me on day 364 and I cost you nothing I had a quick chat with Craig about the future of classifieds (and did not pitch myself for the job). He told me to speak to Jim who is CEO and introduced me. I told Jim I was going to be in SF and would love to meet for a quick coffee. I was not going to be there but would have gone had he said he was available. He did not reply. I also sent him a follow-up email to which he did not reply. I will forward the email I sent him to which he did not reply. Next step: Find people who know Jim Buckmaster well and convince them to have him meet me. 3. Try to extract the non-strategic countries out of OLX to have a dividend stream + try the classifieds 3.0 strategy Those countries generate $7.5 million in revenues and $5 million in profits per year for OLX, yet Naspers has repeatedly asked us to close them. They obviously don’t want me to get them for my own purposes, but I am trying to convince them that they have no real strategic value and as such we should try to build a next generation classifieds 3.0 site which is the only way to have a shot of being relevant in those countries To do that effectively, we would need to spin it off as it would require a complete product redesign to a mobile first (and perhaps only) experience, with a super simple photo-focused listing process with an optional buyer paid payment and escrow solution. Next step: Pitch the idea to Naspers in the coming months. 4. Think through the new idea I should build or company I should run I thought long and hard about creating a VC or angel fund. The issue is that fund economics only work if you have several hundred million under management. Moreover, each fund has a 10 year life which is a huge time commitment. I tend to get restless before then. The way it would have worked would have been as follows: raise a $50 million fund, raise a follow-up multi hundred million fund in 3 years and another one 3 years later. In other words, it’s at least a 16 year commitment with a lot of administrative / boring work in terms of raising money from LPs, doing reporting, etc. I am also not sure it’s something I really would want to do full time. I have been meeting VCs and PE firms to discuss: Which of their portfolio companies I could run Which public companies we should take public and have me run What are the hot trends / companies to see if there is room for a competitor / differentiated version of the idea I am trying to move away from mere idea arbitrage: It’s harder if not impossible to build $10+ billion companies outside of the US I don’t really want to travel as much as I am currently traveling I am less effective managing a product and technology team remotely than I am when they are right next to me The conversations have been interesting and I was approached to be CEO of a few publicly traded companies which is ego boosting. However, there was nothing as appealing or interesting as being CEO of Craigslist. I explored a lot of categories in terms of new ideas to build. I spent a lot of time on 3D Printing, which will be a huge category, before deciding not to pursue it. I also considered bringing www.made.com to the US, before also discarding this idea. I am happy to explain why in more detail. The one idea that has bubbled up and that we are exploring further is building a next generation version of www.justanswer.com. Shockingly the company is on a $150+ million revenue run rate. Given how much of the economy is in services and information, this has the potential to be extraordinarily big if done right. Moreover, the unit economics are nearly as good as the one in stock photography which has not proven to be a winner take all business. I will send you an email on that category. I am doing a lot of research right now into Just Answer: interviewing their customers and experts, trying to figure out how much liquidity they have in each category, thinking through what product improvements could be done, etc. We’ll see where I end up falling on this. Next step: Keep studying the model. 5. Find the next thing to incubate – possibly a Viajanet for Indonesia and South East Asia Some of the clear lessons of the past few years of angel investing and working with Jose on incubating companies in Brazil are: Travel is a huge category Incubating a company allows you to have a disproportionate share of equity for very little A few companies generate most of the returns Based on recent market analysis, there seems to be a clear opportunity to build an Expedia for Indonesia and possibly all of South East Asia. We are currently evaluating the market: Interviewing CEO and cofounder candidates from various business schools and people with travel background in the region Talking to various travel wholesalers Next step: Go to Indonesia September 3-7 to meet all the potential cofounders and partners. 6. Keep angel investing in the most interesting / attractive projects I invested in 105 companies over the last few years and evaluated over 3,000 projects. I actually loved meeting all the entrepreneurs, hearing their ideas, figuring what was hot at any given point in time. Beyond the sheer promotion of entrepreneurship which is valuable in its own right, the process is informative in terms of understanding larger trends to better decide what projects to incubate or start on my own. Interestingly enough, so far we seem to have been good at selecting logical projects that have earned good returns. We have the best win – loss ratio of any angel investor or VC I know with 14 wins for 7 losses. However, none of the winners have proven to be home runs. In other words, we seem to be great at picking companies with good on base percentages which hit singles, doubles and the occasional triples, but we have not been good at finding disruptive winners. In a way we are attempting to assuage this limitation by investing more in “crazy” ideas from US companies instead of just investing in international idea arbitrage businesses. One potential idea for scaling this part of the business might be to pitch Naspers on running a $100 million angel / series A investment fund for them should they accede to giving us a floor on the put. Next step: Continue meeting companies, being more vigilant about our investments given the frothy times in angel investing, yet trying to be open minded enough to increase the probability of home runs. 7. Try to buy the IP for Rise of Nations This is more of a “love project” than anything. Rise of Nations is my favorite strategy games in the history of strategy games. It mixes the real time gameplay dynamics of Age of Empires, Warcraft, Starcraft and Command &amp; Conquer with the strategic and tactical depth of Civilization. Big Huge Games, the company that developed it, stopped focusing on this IP 9 years ago and instead started building role playing games. Their huge bet in the category recently failed and the company filed for bankruptcy in a very public scandal. There is currently a legal discussion over the jurisdiction of the case. Once it’s settled, I would like to try to find a way to buy the assets for cheap with the intent of building Rise of Nations 2. It would simply be a multiplayer version of Rise of Nations 1 with updated graphics and the tactical unit control of a game like Company of Heroes. I would try to get it funded through Kickstarter. Next step: Bid on the Rise of Nations IP once it’s for sale. 8. Become a credible public economic commentator I had political ambitions growing up and still spend a lot of times interacting with people in think tanks and various thought leaders. However, I am starting to feel as much apathy, if not antipathy, for the body politic as Peter seems to feel given his comments in the New Yorker article. I agree with him that Rand type entrepreneur can have more impact on society. That said, post our conversation, I am starting to think that an appointed position like being on the council of economic advisors to the president would be interesting. Unfortunately, the world approves and rewards specialists rather than generalists. I get no credit for predicting the financial and real estate crisis. In order to get more visibility and improve the chances of such an appointment, I reached out to Nouriel Roubini, Paul Krugman, Niall Ferguson and Matthew Bishop (the editor in chief of the Economist for the US) asking for their ideas on how best to promote the ideas. I put a fair amount of thought about how to engage them to maximize the probability of a reply. Unfortunately, they have not replied yet. I will send you some of those emails. Next step: Keep approaching thought leaders and pitching them my ideas. Other considerations: Many of the 8 priorities are mutually exclusive. Should I get the CEO role at Craigslist, I would essentially drop everything else given how big that opportunity is relative to the others. In that context I would not mind completely stopping angel investing and incubating startups. I do it because I find it interesting, I love promoting entrepreneurship, meeting hungry entrepreneurs and it keeps me in the game, but I don’t find it to be as fulfilling and meaningful as doing something massive on my own. I also wonder if it would not be healthy to make a clean break and take 6 months to a year off just to recharge and clear my mind. It’s unclear to me if in that context I should also stop angel investing to fully disconnect, or maybe only take meetings every other week. Likewise, I have to think through whether it would be a full disconnect to focus on getting really fit playing tennis, kiting and skiing vs. focusing on intellectual pursuits – writing, partaking in intellectual conversations, reading, etc. I suspect “the right answer” would be a pleasant mix of all the above: Don’t connect at all in two week increments. Mix intellectual and physical pursuits. Spend some time going to see my closest friends wherever they are in the world to spend quality time with them. Make all the angel investing decisions and meetings in 1 or 2 weeks per month. I would probably not pursue this until my hip is fully healed so that I can make the most of my free time and until the situation regarding the put is resolved one way or another. What do you think? Fabrice

2018-11-23T13:31:02

2018-11-23T13:31:02

https://fabricegrinda.com/?p=9533

2021-05-28T07:07:18

2021-05-28T07:07:18

2018-holiday-gadget-gift-guide

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https://fabricegrinda.com/2018-holiday-gadget-gift-guide/

2018 Holiday Gadget Gift Guide

<p>All my recommendations from last year’s <a href="https://fabricegrinda.com/2017-holiday-gadget-gift-guide/)" target="_blank" rel="noopener noreferrer">2017 Holiday Gadget Gift Guide </a> still hold, so if you are in the market for a notebook, TV, headset or Webcam just refer to it and buy the latest version of each of these.</p> <p>For 2018, I decided to focus on gadgets I never purchased before.<br /> <center></p> <h3><strong>Drone for aerial photography: DJI Mavic 2 Zoom</strong></h3> <p></center><br /> <center><img loading="lazy" decoding="async" class="alignnone size-full wp-image-9519" src="https://fabricegrinda.com/wp-content/uploads/2018/11/maxresdefault.jpg" alt="" width="1280" height="720"></center></p> <p>I had played with drones in the past, but mostly to just fly them around. This year I decided to get a drone specifically to make beautiful photos and videos of my adventures. I tested many drones and ended up picking the DJI Mavic 2 Zoom as it covered most of my use cases.</p> <p>The Mavic 2 Zoom is amazing. Its flight and videos are incredibly smooth. It auto compensates for strong wind on its own which is key for kite surfing. It’s incredibly easy to fly and essentially takes off, returns home and lands on its own. It can fly for 30 minutes while shooting gorgeous 4K videos. It has a 2x optical zoom which is the reason I picked it over the Mavic 2 Pro. With the Mavic 2 Pro I appeared so small in many of the videos when it was flying at safe distances that it was often hard to tell I was the one being filmed.</p> <p>At $1,179 on Amazon as of this Thanksgiving Day it’s far from cheap, but if you love taking action shots it’s totally worth it. You can see below a video I made kite surfing in Cabarete at various distances, elevation, speed and altitude. The wind was a bit light that day and I could barely stay upwind so could hardly pull any tricks, but it still made everything look epic.</p> <p><iframe loading="lazy" src="https://www.youtube.com/embed/lFiY-fESoDw?rel=0" width="1280" height="720" frameborder="0" allowfullscreen="allowfullscreen"></iframe></p> <p>Even unintentionally recording the drone’s flight home made my modest house in Cabarete look ridiculously good.</p> <p><iframe loading="lazy" src="https://www.youtube.com/embed/54TbTvq-elc?rel=0" width="1280" height="720" frameborder="0" allowfullscreen="allowfullscreen"></iframe></p> <p>This is not to say the drone is perfect, far from it. The Active Track function loses you relatively often if you change direction quickly. The drone does not have a launch and forget mode like the <a href="https://www.skydio.com/product/" target="_blank" rel="noopener noreferrer">Skydio R1</a>. Even with Active Track enabled you will have a much better outcome with someone at the controls updating the zoom, elevation and reacquiring you when it loses you. Because you can’t just set it to track you and then put the remote away – if you touch the sticks you will move the drone – it’s not ideal for tracking you while skiing. The only way to shoot skiing videos is for a friend of yours to stay with the remote and phone while the drone auto tracks you. Once the drone is safely landed that person can then ski down. For skiing videos that you can make on your own, I would recommend the Skydio R1 instead. However, the Skydio is way less versatile and not appropriate for kitesurfing as it does not handle strong winds well.</p> <p>Also make sure you get the optional insurance as it’s very easy to destroy the drone while taking action shots. The Mavic 2 Zoom lost me while tracking me kiting and just sat in the air motionless unbeknownst to me. When I switched directions to head back, I hit it with my kite’s front lines and the drone met its unfortunate demise at the bottom of the ocean as you can see below.</p> <p><iframe loading="lazy" src="https://www.youtube.com/embed/Ufm6kU-vkXY?rel=0" width="1280" height="720" frameborder="0" allowfullscreen="allowfullscreen"></iframe></p> <p>Fortunately, I had bought the warranty and DJI replaced the drone.</p> <p><center></p> <h3><strong>Video Game: Red Dead Redemption 2</strong></h3> <p></center></p> <p><center><img loading="lazy" decoding="async" class="alignnone size-full wp-image-9520" src="https://fabricegrinda.com/wp-content/uploads/2018/11/rdr2-officialart-3840x2160.jpg" alt="" width="1600" height="900"></center></p> <p>I love third-person action adventure games and I’ve been waiting 5 years for Rockstar’s latest game as <strong>Grand Theft Auto V</strong> came out in 2013. Red Dead Redemption 2 is everything you would expect from a Rockstar game: a long, nuanced and intricate adventure with a seemingly infinite set of side quests. I love how your moral choices and the way you interact with characters impacts their future interactions with you. This is also probably the Rockstar game with the most detailed side missions which makes them individually compelling. My only nitpick is on the pacing of the main storyline which is rather on the slow side.</p> <p>In the same genre I found Shadow of the Tomb Raider underwhelming. The game is gorgeous, but I did not like Lara’s selfish attitude. The game is poorly paced. The game mechanics which were amazing in 2013 are starting to show their age and stealth is inconsistent and unsophisticated.</p> <p><center></p> <h3><strong>Portable Speaker: Ultimate Ears Megaboom 3</strong></h3> <p></center></p> <p><center><img loading="lazy" decoding="async" class="alignnone size-full wp-image-9521" src="https://fabricegrinda.com/wp-content/uploads/2018/11/145462-speakers-review-review-ultimate-ears-ue-megaboom-3-review-image1-scbxa83iv0.jpg" alt="" width="970" height="647"></center></p> <p>As my place is being renovated, I am finding myself in hotels, Airbnbs and rentals. I wanted a portable very powerful speaker with great sound quality. After trying many of them, I picked the Megaboom 3. It was powerful enough to provide sound for a pool party at one of the houses I rented. It’s also waterproof and extremely durable and has a 20-hour battery life. If you want a more portable version the Boom 3 is also a great choice.</p> <p><center></p> <h3><strong>Fitness Tracker: Fitbit Charge 3</strong></h3> <p></center></p> <p><center><img loading="lazy" decoding="async" class="alignnone size-full wp-image-9522" src="https://fabricegrinda.com/wp-content/uploads/2018/11/71YGrhhoqUL._SX522_.jpg" alt="" width="522" height="522"></center></p> <p>I was in the market for a fitness tracker. I considered the Fitbit Versa and Apple Watch 4. That said, I abhor notifications and have them all turned off on my computer and phone. I also always keep the phone on Do Not Disturb Mode during the day and on Airplane Mode while in meetings and at night. As such, I don’t really have a need for a smartwatch and was only really evaluating it for its fitness tracking options. The Apple Watch 4 has impressive heart rate monitoring features and health tracking, but at the end of the day the short battery life, less than two days, made it a non-starter for me, especially since I sleep track. If you are set on using a smartwatch as a fitness tracker, the Fitbit Versa is a better choice with its 3-day battery life, especially as it’s on sale at Amazon for $149 for Black Friday. Ultimately, I opted for the Fitbit Charge 3. It can last a week on a charge. You can wear it while swimming and it has a large touchscreen.</p> <p><center></p> <h3><strong>Media Streaming Device: Amazon Fire TV Cube</strong></h3> <p></center></p> <p><center><img loading="lazy" decoding="async" class="alignnone size-full wp-image-9523" src="https://fabricegrinda.com/wp-content/uploads/2018/11/41-nPGkLVEL._SL1000_.jpg" alt="" width="1000" height="627"></center></p> <p>Given my new 77” OLED LG TV, I wanted to get a 4K streaming device to match it as I still owned a very old Apple TV and Fire TV. I was about to buy the Fire TV Stick 4K given that it cost $49.99 to the Cube’s $119.99, but Amazon’s Black Friday special of selling the Fire TV Cube for $59.99 just made it too compelling to pass up.</p> <p>It has twice the storage as the 4K Stick, built in Ethernet support and more importantly with its built-in speaker allows you to control the Fire TV and all your home entertainment by voice. It’s also way easier to setup than my Logitech Harmony Elite.</p> <p><center></p> <h3><strong>eReader: The new Kindle Paperwhite 2018</strong></h3> <p></center></p> <p><center><img loading="lazy" decoding="async" class="alignnone size-full wp-image-9524" src="https://fabricegrinda.com/wp-content/uploads/2018/11/61eAq6gg-XL._SL1000_.jpg" alt="" width="1000" height="1000"></center></p> <p>My trusty old Kindle Paperwhite passed away, so I got the 2018 edition. It looks identical to the old editions, but it’s a great upgrade. It’s 10 percent slimmer, lighter, more durable and fully waterproof. The text is sharper and better lit. They doubled storage to 8Gb and they added Bluetooth audio to be able to connect headphones for audiobooks. It’s a fantastic upgrade to a great ereader.</p>

<p>All my recommendations from last year’s 2017 Holiday Gadget Gift Guide still hold, so if you are in &hellip; <a href="https://fabricegrinda.com/2018-holiday-gadget-gift-guide/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;2018 Holiday Gadget Gift Guide&#8221;</span></a></p>

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2018 Holiday Gadget Gift Guide. Categories - Tech Gadgets. Date-Posted - 2018-11-23T13:31:02 . All my recommendations from last year’s 2017 Holiday Gadget Gift Guide still hold, so if you are in the market for a notebook, TV, headset or Webcam just refer to it and buy the latest version of each of these. For 2018, I decided to focus on gadgets I never purchased before. Drone for aerial photography: DJI Mavic 2 Zoom I had played with drones in the past, but mostly to just fly them around. This year I decided to get a drone specifically to make beautiful photos and videos of my adventures. I tested many drones and ended up picking the DJI Mavic 2 Zoom as it covered most of my use cases. The Mavic 2 Zoom is amazing. Its flight and videos are incredibly smooth. It auto compensates for strong wind on its own which is key for kite surfing. It’s incredibly easy to fly and essentially takes off, returns home and lands on its own. It can fly for 30 minutes while shooting gorgeous 4K videos. It has a 2x optical zoom which is the reason I picked it over the Mavic 2 Pro. With the Mavic 2 Pro I appeared so small in many of the videos when it was flying at safe distances that it was often hard to tell I was the one being filmed. At $1,179 on Amazon as of this Thanksgiving Day it’s far from cheap, but if you love taking action shots it’s totally worth it. You can see below a video I made kite surfing in Cabarete at various distances, elevation, speed and altitude. The wind was a bit light that day and I could barely stay upwind so could hardly pull any tricks, but it still made everything look epic. Even unintentionally recording the drone’s flight home made my modest house in Cabarete look ridiculously good. This is not to say the drone is perfect, far from it. The Active Track function loses you relatively often if you change direction quickly. The drone does not have a launch and forget mode like the Skydio R1. Even with Active Track enabled you will have a much better outcome with someone at the controls updating the zoom, elevation and reacquiring you when it loses you. Because you can’t just set it to track you and then put the remote away – if you touch the sticks you will move the drone – it’s not ideal for tracking you while skiing. The only way to shoot skiing videos is for a friend of yours to stay with the remote and phone while the drone auto tracks you. Once the drone is safely landed that person can then ski down. For skiing videos that you can make on your own, I would recommend the Skydio R1 instead. However, the Skydio is way less versatile and not appropriate for kitesurfing as it does not handle strong winds well. Also make sure you get the optional insurance as it’s very easy to destroy the drone while taking action shots. The Mavic 2 Zoom lost me while tracking me kiting and just sat in the air motionless unbeknownst to me. When I switched directions to head back, I hit it with my kite’s front lines and the drone met its unfortunate demise at the bottom of the ocean as you can see below. Fortunately, I had bought the warranty and DJI replaced the drone. Video Game: Red Dead Redemption 2 I love third-person action adventure games and I’ve been waiting 5 years for Rockstar’s latest game as Grand Theft Auto V came out in 2013. Red Dead Redemption 2 is everything you would expect from a Rockstar game: a long, nuanced and intricate adventure with a seemingly infinite set of side quests. I love how your moral choices and the way you interact with characters impacts their future interactions with you. This is also probably the Rockstar game with the most detailed side missions which makes them individually compelling. My only nitpick is on the pacing of the main storyline which is rather on the slow side. In the same genre I found Shadow of the Tomb Raider underwhelming. The game is gorgeous, but I did not like Lara’s selfish attitude. The game is poorly paced. The game mechanics which were amazing in 2013 are starting to show their age and stealth is inconsistent and unsophisticated. Portable Speaker: Ultimate Ears Megaboom 3 As my place is being renovated, I am finding myself in hotels, Airbnbs and rentals. I wanted a portable very powerful speaker with great sound quality. After trying many of them, I picked the Megaboom 3. It was powerful enough to provide sound for a pool party at one of the houses I rented. It’s also waterproof and extremely durable and has a 20-hour battery life. If you want a more portable version the Boom 3 is also a great choice. Fitness Tracker: Fitbit Charge 3 I was in the market for a fitness tracker. I considered the Fitbit Versa and Apple Watch 4. That said, I abhor notifications and have them all turned off on my computer and phone. I also always keep the phone on Do Not Disturb Mode during the day and on Airplane Mode while in meetings and at night. As such, I don’t really have a need for a smartwatch and was only really evaluating it for its fitness tracking options. The Apple Watch 4 has impressive heart rate monitoring features and health tracking, but at the end of the day the short battery life, less than two days, made it a non-starter for me, especially since I sleep track. If you are set on using a smartwatch as a fitness tracker, the Fitbit Versa is a better choice with its 3-day battery life, especially as it’s on sale at Amazon for $149 for Black Friday. Ultimately, I opted for the Fitbit Charge 3. It can last a week on a charge. You can wear it while swimming and it has a large touchscreen. Media Streaming Device: Amazon Fire TV Cube Given my new 77” OLED LG TV, I wanted to get a 4K streaming device to match it as I still owned a very old Apple TV and Fire TV. I was about to buy the Fire TV Stick 4K given that it cost $49.99 to the Cube’s $119.99, but Amazon’s Black Friday special of selling the Fire TV Cube for $59.99 just made it too compelling to pass up. It has twice the storage as the 4K Stick, built in Ethernet support and more importantly with its built-in speaker allows you to control the Fire TV and all your home entertainment by voice. It’s also way easier to setup than my Logitech Harmony Elite. eReader: The new Kindle Paperwhite 2018 My trusty old Kindle Paperwhite passed away, so I got the 2018 edition. It looks identical to the old editions, but it’s a great upgrade. It’s 10 percent slimmer, lighter, more durable and fully waterproof. The text is sharper and better lit. They doubled storage to 8Gb and they added Bluetooth audio to be able to connect headphones for audiobooks. It’s a fantastic upgrade to a great ereader.

2018-11-07T15:14:36

2018-11-07T15:14:36

https://fabricegrinda.com/?p=9504

2021-05-28T07:07:43

2021-05-28T07:07:43

great-interview-podcast-in-forbes-with-alejandro-cremades

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https://fabricegrinda.com/great-interview-podcast-in-forbes-with-alejandro-cremades/

Great Interview &#038; Podcast in Forbes with Alejandro Cremades

<p><a href="http://alejandrocremades.com/fabrice-grinda-from-debt-to-hundreds-of-millions-in-exits/" rel="noopener noreferrer" target="_blank"></a>I had the pleasure of running into <a href="http://alejandrocremades.com" rel="noopener noreferrer" target="_blank">Alejandro Cremades</a> at the latest <a href="https://ff.co/#/" rel="noopener noreferrer" target="_blank">Founders Forum</a> in New York. As luck would have it, he had prepared the angel investor ranking for Forbes where I was <a href="https://fabricegrinda.com/forbes-just-named-me-the-1-angel-investor-in-the-world/" rel="noopener noreferrer" target="_blank">named #1</a>. He wanted to talk to me about my entrepreneurship journey and what we are up to at FJ Labs.</p> <p><iframe loading="lazy" scrolling="no" src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/518668005&amp;color=ff5500" width="100%" height="166" frameborder="no"></iframe></p> <p>I am reproducing the <a href="https://www.forbes.com/sites/alejandrocremades/2018/10/30/this-entrepreneur-went-from-100000-in-debt-to-hundreds-of-millions-in-exits/#49c38be98ab2" rel="noopener noreferrer" target="_blank">Forbes interview</a> below:</p> <p>With over 400 startup investments and 150 plus exits Fabrice Grinda is unquestionably one of the most experienced entrepreneurs and investors on the planet today. If anyone knows what it takes to build a scrappy and scalable startup, and how to cash in on one, it’s got to be Fabrice. In a new episode of the DealMakers podcast he pulled back the curtain on his biggest mistakes and how to hit home runs, again and again as an entrepreneur and also as an investor (listen to the full episode here).</p> <p>Super angel, and startup entrepreneur Fabrice Grinda has built and sold multiple companies, as well as investing in some of the most successful ventures you wish you had been in earlier. Those include Palantir, Airbnb and Alibaba Group. Joining the world’s top M&amp;A experts, startup fundraisers, and angels, Fabrice gave an exclusive interview with the DealMakers podcast detailing how he got started, what he’d do differently now, and how he picks the entrepreneurs that receive his investment.</p> <p><strong>Scrappy Startups, $300M Exits &amp; Impactful Marketplaces </strong></p> <p>After finding his passion for tech with his first PC at ten years old, Grinda got his feet wet in entrepreneurship with an import/export business to pay his way through college. That company moved high end computers from the US to Europe. After finishing Princeton he went to McKinsey to hone his skill and business acumen.</p> <p>That first venture put $50k in Fabrice’s pocket. $25k went to a down payment on a one bedroom apartment. He sold it for $70k more than he bought it for 18 months later. The other half he invested into 4 stocks: Microsoft, Intel, Amazon and Yahoo. Those investments soon grew to $300k. He put all of it into his own startup.</p> <p>That company went on to raise $60 million in capital, before getting a $300M cash buyout offer from eBay. Unfortunately, his lead investor at the time didn’t want to sell. He let his partner buy him out at a much lower price after the bubble burst.</p> <p>Then there was Zingy. Launched in 2001, there wasn’t much in the way of capital in the market for a mobile game and ringtone startup. Fabrice told DealMakers listeners “I ended up living in New York essentially at $2 a day, slept at the office in the couch. I showered in the office. I couldn’t even afford coffee. I was living off ramen noodles. We missed payroll 27 times in the course of two and a half years. I was raising money but I would raise it in 5k or 10k increments.” There was a point where money ran dry and the company missed payroll four and a half months in a row. Staff shrank from 27 to just 7. Over several years he still managed to raise $1.4M, but in $5k to $10k increments.</p> <p>Despite the challenges Zingy became a huge success. Owning over 53% of the company, Grinda sold it in 2004, for $80M in cash. The investors pocketed a 20x return.</p> <p>Out of that windfall of money he bought himself a TV, Xbox and two tennis rackets. He stayed living in a studio apartment, too busy building a larger company to really get sidetracked by the money.</p> <p>Despite hiring an investment banker who turned an initial $40M unsolicited offer for that company into an auction which yielded double that, and completing the sale, he stayed on as CEO for 18 months. Of course, as most entrepreneurs realize at this stage, things just don’t work like they used to after a sale. He decided “if you’re not going to let me conquer the world, this is not interesting to me,” and left to start a new venture.</p> <p>After offering to fix Craigslist for free, and finding the founders were uninterested in improving the platform, Grinda cofounded OLX with Alec Oxenford. They received $10M in startup capital from Jeremy Levine (Bessemer Venture Partners), the Founders Fund, and General Catalyst.</p> <p>OLX launched in 100 countries, testing each market with $50k to see where they could gain traction. Of course, when you build something with 350M users that consumers love, you get a lot of competition and people who want to buy you. That led to another large exit.</p> <p><strong>The Most Meaningful Moment in the Life of an Entrepreneur</strong></p> <p>You’d think some of these big exits, notable investments or the millions and millions of dollars would be the big life changers someone like this would point to as their big successes. Yet, Fabrice says “What’s interesting though, was most meaningful moment in my life at that point was actually not the day of the exit or the day that we got the $80M. It’s the day we became profitable. The day we became profitable and I paid back my credit card debt of $100,000. We made payroll and we paid the rent, etc. We were saved, and I knew we had become the masters of our own destiny. We no longer depended on third parties.&#8221;</p> <p><strong>The 4 Biggest Lessons Learned from 400 plus Startups</strong></p> <p>On the mistakes and things Grinda says he would tell his younger self, he points out:</p> <ol> <li>Picking a VC who understood him better, and had aligned interests</li> <li>Understanding the benefits of having ‘drag’ rights in shareholder agreements</li> <li>Consider taking more liquidity earlier</li> <li>The importance of your direct relationship with the partner at a VC firm</li> </ol> <p><strong>Hitting Home Runs</strong></p> <p>Together with Jose Marin, Fabrice now operates FJ Labs. A VC firm that invests in around 75 companies a year, as well as launching one or two new startups of their own. FJ Labs invests around the globe in all stages of startups. In terms of picking founding entrepreneurs to bet on, Fabrice says “over everything else, if you have a great storyteller, you have someone who is going to be able to raise money, attract talent and sell the company to partners and potential buyers.”</p> <p>Find out why these entrepreneurs have an edge, how much he has given them over a simple Skype call, and all of the other secrets revealed in the full podcast episode.</p> <p><strong>Full transcript of the interview </strong></p> <p>Reproduced from <a href="http://alejandrocremades.com/fabrice-grinda-from-debt-to-hundreds-of-millions-in-exits/" rel="noopener noreferrer" target="_blank">Alejandro’s blog</a></p> <p><em>Alejandro:</em> &nbsp; Alrightee. Hello, everyone, and welcome to the DealMakers Show. So today we have someone very, very exciting, someone that has done a lot for the startup ecosystem and someone also that has been there and has done it. So Fabrice Grinda, welcome today to the DealMakers Show.</p> <p><em>Fabrice:</em> &nbsp; Thank you for having me.</p> <p><em>Alejandro:</em> &nbsp; So you’ve been, normally, I mean we typically interview people that have done is you know maybe once or maybe twice but in terms of like doing a transaction whether that is an exit or fundraising, but you’ve done it all and you’ve done it all from all different fronts, from the entrepreneurial side of the table, from the investor side of the table. But I’d like to begin today with really the entrepreneurial side. So how many companies have you founded and exited by now?</p> <p><em>Fabrice:</em> &nbsp; Yeah, it’s actually a little bit harder to count because it depends if you include first, my first company that helped me pay for college was a little sole proprietorship whereas doing import/export of high-end computer from the US to Europe to France where I was before so if you think of like companies where I was founder and CEO that were ventured bats, so I’m actually limiting the scope, it’s three large companies; one which was a company called Aucland. It was an ebay type company for France; one was Zingy which was a mobile content company selling ringtones etc from 2001 to 2005 and that one from 0 to 2 million revenues in four years; and the last one was OLX which is the largest classified site in the world with over 350 million unique visitors a month and 3,000 employees. Beyond that, I’ve also founded and roll up chairmaned another six or seven companies where I was cofounder sometimes acting CEO but usually chairman.</p> <p><em>Alejandro:</em> &nbsp; Got it. So let’s talk about the side of the equation of really being a cofounder and a CEO. So I understand that you want to Princeton then you went to McKinsey and then you got started with the first one, right, Aucland. So this is a company that you had Bernard Arnault from France Financing. So how does this company really come about?</p> <p><em>Fabrice:</em> &nbsp; Yeah, I went to Princeton maybe you know I was already a tech nerd. I grew up in the 1908s. I got my first PC when I was 10 back in 1984. So I grew up like programming, building computers, building PBSs and my role models already at that time I guess Bill Gates and C. Charleston. I went to Princeton knowing I would be a tech entrepreneur, definitely be an entrepreneur like they were though the internet didn’t really exist in the proper form given that I went to Princeton in ’92. We were online and we had like direct 10 megabits T one lines in a room but Mosaic only came about in ’94 and SK in ’95. Now in Princeton as I said I built a company to export computer coming from the US which paid for college. The thing is at that time I was very much like Sheldon Cooper. I was an introverted, shy, frankly academic. And even though I was getting all these A+s and was really good in school, I felt I didn’t have the toolset to succeed as an entrepreneur. And so when I graduated from Princeton and I was like at the top of my class, I decided to join McKinsey because I kind of considered it as business school except they pay you. And for me, where I was in personal development, you know, I was 21 years old, it made a lot of sense and I learned all the things I need to learn. I’ve improved my oral and communication skills, my ability to work in teams, like public speaking classes. McKinsey is really good in investing in these people but again I went to McKinsey knowing I wanted to be a tech entrepreneur. I never saw it as the end all be all where I was going to spend the rest of my professional career. And I actually went there thinking I would miss the bubble but lo and behold, in 1988, I was 23, I did not miss the bubble. I felt I have learned what I needed to learn and decided to go and build a company. The issue of course is when you’re 23 and especially back then when things were more complex, took more money and more time, a lot of things were out of my reach. I had a lot of great ideas. I want to build the internet bank because I boasted in working in financial services in McKinsey but in order to do that you needed a banking license. You needed like millions of capital, things I didn’t feel would be available to a 23-year old. And if you think of companies like Amazon, where you need like supply sheet management and logistics and inventory, then again it way more capital than what was available, but at Princeton I’ll tell you the economics and I like the way markets and marketplaces create, you know bring transparency and liquidity to otherwise [04:57] fragmented market. And so that idea of creating markets in general appealed to me regardless of the category [05:04]. And kind of randomly fell on the ebay website and kind of fell in love at first sight of like, wow, like this is a really interesting truths of taking what was fragmented in these types of markets and garage sales, etc, and putting it online and bringing massive liquidity. So I decided, oh, I should do this and I should do this in Europe. And kind of coincidentally just after that, they felt to go public so they published their S1 which kind of became the base of my business plan and I sold everything I had. I left McKinsey and in July of 1998, I moved back to France to bring the internet and to bring auctions and Aucland to France.</p> <p><em>Alejandro:</em> &nbsp; Got it. And you raise for this company 18 million and then you went on to do an exit to get this company acquire and sold the stock to one of the investors. I guess from this transaction…</p> <p><em>Fabrice:</em> &nbsp; Well, yeah, not quite.</p> <p><em>Alejandro:</em> &nbsp; Okay. Tell us the story.</p> <p><em>Fabrice:</em> &nbsp; So I sold everything I had. I left Princeton with like 50k in the bank because I built my first startup but that 50k did two things; 25k I bought a one-bedroom apartment for $115,000, the rest of course was a downpayment and so I borrowed mortgage. I sold it for 185k eighteen months later. The other 25k I invested for stocks in Intel, Microsoft, Yahoo and I can’t remember the other one, and sold that. I made like 300k. And so net of taxes I like 300k. So I put all that 300k in the start up and started building the site, hired the team. And while we were competing mostly with people that were technically focused, no one had thought okay, how do you build liquidity. And so we hired category managers from like coins and stands and all different categories and we had aggregated a lot of inventory. So we launched with actual supply acquisitions strategy and more content that was appealing and attractive than our competitors, and then the bubble started inflating and though it took a while talking to many VCs and getting many no’s, as we were contemplating, I got an offer from Bernard Arnault’s fund called Europe @ Web for 18 million. The reality is actually even then there was an option, I could’ve sold to eBay at the time for about 20 million but being a delusional 24-year old at that point, I didn’t realize how much money that was and how life-changing that was. I’m like, yeah, I’ve conquered the world and buy the what-not. I’m doing this for money anyway. So I said no, I raised money and we used it to grow. We ultimately raised a lot more money. I think in total we ended up raising 50 or 60 million. The outcome was not as great as I would have hoped it to be before for mobile reasons we then had a really, we ended up at the top of the bubble and the peak like February 2000, and got an offer from eBay and I think 300 million in cash but we’re socked. I remember eBay was a great company. Sadly, I couldn’t convince Arnault to sell and frankly he didn’t want to sell because he liked to be the industrialist who understood the internet. And so his interest and incentive was actually just to make sure to hold it tight forever so ultimately I sold – when we realized our interest were not aligned, and he wanted to sell frankly to another company who was investor which was in a different business model which is called [08:34] Ricardo, I sold to him and he sold to [08:36] Ricardo. So it wasn’t a great exit. The bubble at first and the valuations are a lot lower and I didn’t sell in the right time, at the right conditions, at the right people. It’s amazing the learnings but definitely one that was financially very fruitful.</p> <p><em>Alejandro:</em> &nbsp; Got it. So I guess now talking about the learnings like from this experience itself, what was your biggest learning?</p> <p><em>Fabrice:</em> &nbsp; Many learnings have—when you’re picking a VC it’s really like you’re getting married. They are the people that are going to be on your board for better or worse and they need to be by you and stand by you in the bad times especially. And the issue is Arnault offered the highest valuation and the most money but his team didn’t really come from the industry. They didn’t really understand what I was doing and frankly, many of them were actually jealous and so they were not the right investor and I should’ve raised even though the valuations were lower and the capital offer was lower, I should’ve raised to someone who really got what we were trying to do and whose interests [09:42] ambitions were more aligned. And that’s generalized, I mean when you’re raising money, you’re actually not raising from let’s say Sequoia. You’re actually raising it from that partner who is at that firm. And so what really matters is not the reputation of the firm nor frankly even the reputation of the partner, it’s your personal relationship with that partner. How do you get along with them? Did you have rapport? And do you think you’re going to be in camp, they’re going to support you in the time of need? And so really picking your VC correctly is a skill and especially as first time entrepreneur, we have a tendency to overweigh valuation and overweight capital raised as opposed to picking the person who’s really the right partner for that company for you personally on the go forward basis. And perhaps, you should be raising too much and too high price because then you price yourself out of exit. You’re pricing yourself of perfection and screening issues that we don’t actually think about whenever you’re euphoric and everyone is sort of [10:45] and everything is great. And so trying to like right size the valuation, the investment, etc makes a lot of sense as well. And then of course I learned a lot more about like you know the thing is you can’t be that young and naive. I didn’t pick necessarily the right lawyer. They didn’t take me seriously because I was so young and it was France. And I didn’t know anything like what’s a drag, what’s a tag along, what’s pre-emptive rights and the one [11:10] that would change everything in my legal contract would have been if we had a drag that we could have sold when eBay offered to buy, and we would have that, and so a lot of those mistakes. Also a lot of mistakes on the hiring side, the VCs were lobbying for me to hire people with experience and gray hair. The issue is they were more used to larger organizations where everything had to be by consensus as a result things moved, once I hired them, things moved slower. And it’s great to have people with experience but you need people that also have a cultural fit and/or willing to move fast and do great things which is the push that was needed in the competitive environment that we were in. And so we didn’t gel necessarily perfectly and so hiring for fit different larger role than I expected on a hiring perspective and I was overemphasizing you know the resume and their background experience.</p> <p><em>Alejandro:</em> &nbsp; Got it. I mean obviously a really big learning experience for you and then you returned back to the US and you actually started another company. You go at it along with Zingy. So can you talk to us a little bit about Zingy?</p> <p><em>Fabrice:</em> &nbsp; Yeah. So after the bubble burst and it’s sold and it kind of failed, I was thinking, “What do I do next?” And I spent a fair amount of time soul searching, do you go after McKinsey? Do I go to business school? Do I go and run digital for a media company? And I realized, you know what, at the end of the day, maybe I missed the biggest auction to succeed in life early on and maybe the internet is dead and it was never going to be as big as people expect it to be and as I expect it to be and maybe it was overhyped by you know so what. I didn’t do this to make money. I did this because I like what I was doing. I like creating something out of nothing and I like the process of being an entrepreneur. And the underlying ambition was to be an entrepreneur, to build something out of nothing. And so in this new world of 2001, I had a new set of constraints and constraint was capital was no longer available. VCs were no longer investing and so I needed an idea that could be profitable very quickly with very little capital. And I decided you know my core motivation is being an entrepreneur and in a way the idea that I pursue matters less and it’s just important that it meets the constraints at the time. And so I didn’t particularly like the idea of Zingy which was selling ringtones and mobile games in the US but I felt it was an idea that could be successful with reasonably little capital and can build the profit of a company because I’ve seen it work rather well in Europe and in Asia and the US at that time was way behind from mobile perspective. And so I sold yet again everything I had. I reinvested everything I had and moved to the US where I have to admit the first years were really, really tough. I mean I called VCs, told them I was doing BTC Telecom and every BTC company had gone under like the [14:25]. Every telecom company had gone under. No one wanted to mess anything. I ended up living in New York essentially at $2 a day, slept at the office in the couch. I showered in the office. I couldn’t even afford coffee. I was living off ramen noodles. We miss payroll 27 times in the course of two and a half years. I was raising money but I would raise it in like 5k increments. So I meet to see some guy and can at least give me 10k and yippee, I’d make payroll for this for at least two weeks. And then of course we’d be out of money again. So our employees were like, “I don’t understand. The bank made a mistake yet again with the wire.” They’re really confident where really I just have cash but ultimately I’d find someone else who would give me 5k. So I raised 1.4 million but I really raised them in like 5k to 10k increments over the course of multiple years. And at some point I ran out of people where to raise money from and miss payroll from four and a half months in a row. At that point, we went from 27 people to 7. I guess when we stopped paying people they stopped showing up for work because it kind of makes sense. It was really, really, really rough. But you know, it’s what we’re doing, we laid the foundation for success. No one else is doing this and so little by little we signed all the music companies, little by little we signed all the artists, little by little we signed all the phone companies and once the business starts taking off, it took off like a rocket ship and we survived by building this the old fashion way through profits and cash flow profitability was really what mattered, not even that probability. And I remember very clearly the day we became profitable in August 15, 2003, it was a massive cause for celebration and I knew we were saved.</p> <p><em>Alejandro:</em> &nbsp; Yeah. I can imagine. And you were talking before that one of your biggest lessons was surround the team and investors. And what was the team like and the shareholding team initially with Zingy?</p> <p><em>Fabrice:</em> &nbsp; Zingy was completely different because there is not VC investing so it’s not as if I had a choice between who I was investing from. Once you have a lot of term sheets, a lot of VCs you want to invest at you, picking the one that’s best for you for your marriage makes total sense. In this case, it was more desperation. It’s like I need cash, I would take money frankly from whomever was willing to give it to me, and it really didn’t matter. And so it was completely desperate. I had friends who would build a little micro from his families who gave me half million. My father gave me some money. My father’s friends gave me some money. Frankly, random people I met from every walks of life, the friends from McKinsey had given me some money. I really raised from everyone and anyone. There is no constraint. And so it was very different. At the end of the day I also invested everything I had. I own 53.6% of the company. I had a cofounder in CTO who were like 6% and then the rest of the team we hired adhoc, as needed basis. It was rather you know built differently partly because we were so capital constraint.</p> <p><em>Alejandro:</em> &nbsp; Got it. Got it. I mean I think that the investors probably they were happy with the outcome because Zingy was ultimately your first significant exit I will say. I believe the terms are public. What were those terms, Fabrice?</p> <p><em>Fabrice:</em> &nbsp; The company, so the first few years, we were really struggling. We did 1 million in revenues in 2002. We did 5 million in 2003, which is when we became profitable. We did 50 million in 2004 and 200 million in 2005. So the company became a rocket ship. I sold it a bit early but as I’ve learned from prior experience, better early than too late. I sold it for 80 million in cash in June of 2004. And I say it on [18:16] all the investors made 20x on the capital they invested. Yeah, everyone had an amazing outcome. All the employees who saved and invested really, really well made millions. So it was a great outcome for all and it was my first large exit. What’s interesting though was most meaningful moment in my life at that point was actually not the day of the exit or the day that we got the 80 million [18:43]. It’s the day we became profitable. The day we became profitable and I paid back my credit card debt of 100,000. I was on credit card debt and we made payroll and we paid the rent, etc, like then we were saved and I knew we had become the masters of our own destiny. We no longer depended on third parties and on the good will of others to survive. And so profitability was really the day that what the most relevant and at the point where we sold, we’ve grown so quickly. We were so busy. I didn’t even take stock. I didn’t realize. I think the only thing I did when I sold was I bought myself a TV, an Xbox and two tennis rackets. And I didn’t realize how much money like I made. I guess net of taxes I made like $26 million. That’s a lot of money and again I didn’t realize that and I still lived in my like studio apartment for another five years like that. We were just too busy you know like building a larger company. We went from I think seven employees when we were at the bottom in like August 15, 2003 to like 200 employees a year later. We have to move like four times every time. We get offices are so big, we’re like, oh, we’ll never fill them, and then we were growing so fast, we like filled them. We were really, really busy and it was really fun times.</p> <p><em>Alejandro:</em> &nbsp; Yeah. You know I can imagine but it’s interesting so you go from 50 to 200 million, I mean that’s unbelievable growth. So I guess what was the trigger there, Fabrice, to say you know, maybe it’s time to take a look at an exit?</p> <p><em>Fabrice:</em> &nbsp; The revenue growth was actually independent from the exit per se. So as we were struggling to become profitable, a company had approached us and offered like 8 million to buy and I owned 53.6% of the company. So I was actually on the verge of selling the company for 8 million. But they were a French company and they were taking their sweet time to get the deal done and so by the time the papers started getting done, we had grown and I wasn’t really interested in selling anymore. So then another company came in and offered 10 and another company came in and offered 12. Then another company came in and offered 15. Then another company came in and offered 18. Then another company came in and offered 20. So there’s a 20 million offer on the table but we’re growing really quickly so I’m like, you know what, I’m not selling. So I told all these people and we were talking to media companies from around the world and at the point we’re already being profitable. We started having like a million in the bank and we had signed all – so I’ll talk about what led to that success in the revenue growth. So things were going really well so I decided not to sell. Then it kind of randomly one of our suppliers of content which is a Japanese company that was publicly in the same space came in in March of 2004 and said, “Okay, we’ll buy you. We’re offering an unsolicited.” They came in and said out of the blue, “We’re buying you for 40.” And that was so much we’re like okay, I need to take this seriously. So I hired an investment bank which is called [Broadview 21:47]. We ran an auction and that Japanese company end up winning but in the process of riding the auction we doubled the price and we ended selling for 80. And it also taught me that having a banker in the sale process is very effective. It got the price up significantly, I mean double in this case, but more importantly, they played the role of bad cop while I could be the good cop with the potential buyers. And so you don’t want to alienate your buyers in the process of getting the deal done. And so having someone that you can blame for asking for things and like saying, oh, you’re telling me that this is not market and this is not fair, and blame them is an amazing way of going and it’s totally worth the amount of money. Now in terms of what was driving that revenue growth from like 5 to 50 to 200, we were a B to B to C provider, so we were not directly selling to the consumers. We were selling to the mobile operators. And it just took me two years to get the first contract done and that was a very arduous process. I mean big large companies like Verizon don’t actually want to sign with a little startup because they’re worried about and legendly so but my ability. So I would go through all the telco shows like the CTIAs in the world. I will try to set meetings. I mean at first it’s just to get my name and face out there. They wouldn’t even want to take meeting with me. I had no idea who to talk to, how to get my details. I kind of bribed Microsoft actually at the time they were desperate for revenues MSN to become the ringtone provider in the BTC way and that press release kind of led to random guy Motorola to reach out for us to write content to him, and once we’ve done that, someone at Sprint asked for 25gs of content. That was our first deal. And once that became successful, the Sprint deal, everyone else wanted to do a deal with us because we’re the only ones who had the license to all the content. And so we went from going live on Sprint I guess April 1 of 2003 and at that point we were like down and broke and to every signing and launching every to signing from after that went live, every major carrier approached us and like April, May, June, July. And we had no money and so I sort of coding again and started helping build the site and we started launching and we went live in like AT&amp;T in August 15 and then we went live on like Virgin Mobile in like September 1 and then we went live in AllTel in October. So we started launching all these operators and so a combination of deploying every single operator in the US like the top 20 basically and increasing the product offering and then releasing more and more phones that will support the content led to the massive growth. And so that led it from 5 to 50 to 200. It was an amazing rocket ship and it was an amazing story.</p> <p><em>Alejandro:</em> &nbsp; That’s fantastic. And this was to For-Side, right. That was the company that acquired Zingy?</p> <p><em>Fabrice:</em> &nbsp; That’s correct.</p> <p><em>Alejandro:</em> &nbsp; Got it. And did you have any type of insights or learnings that perhaps you know were different to Aucland when doing this transaction?</p> <p><em>Fabrice:</em> &nbsp; Well, very different insights in the sense that I realized either having a banker makes a lot of sense, selling them early than later probably also makes sense which just make sure you’re monetizing, taking cash instead of stock. Arguably I sold to the wrong company as well. I didn’t pick the buyer pretty well because I didn’t realize that culture shock. We were on the ground floor of the beginning of the mobile revolution and we were the only ones who had a lot of money and we’re very profitable. We had the opportunity to buy Shazam US for like a million dollars. We could have bought like all these different companies and roll them up and have them be part of offering. I think we would have positioned this to be dominant in the smartphone world once the smartphone started being released and of course the first iPhone came out in 2007. The problem is the Japanese didn’t do that, didn’t want me to do that and getting to approve anything became impossible. And so I offered Shazam for a million, they said no. I mean they kept saying no to all the different things I wanted to do so at the end of the day—I stayed for 18 months because it’s still a rocket ship. It was still a lot of fun but after 18 months, you know what, to just manage it and take all the profits and cash instead of Japan you don’t need, and so I sold and made in June 2004. I stayed CEO until November 2005. And them I’m like, you know, if you’re not going to let me conquer the world, this is not interesting to me, so I left them to go to the next company.</p> <p><em>Alejandro:</em> &nbsp; That’s OLX, right.</p> <p><em>Fabrice:</em> &nbsp; That’s OLX.</p> <p><em>Alejandro:</em> &nbsp; They actually conquered the world and OLX had a massive impact. So tell us a little about OLX.</p> <p><em>Fabrice:</em> &nbsp; I’ve always wanted to build marketplace businesses, so Aucland, you know and frankly [26:56] in Latin America kind of felt in that mode. Zingy was really the [27:00]. Zingy, I wanted to be an entrepreneur. I’m like what can I do to be—what companies can I build to remain an entrepreneur in the world of constrained resources. But now in 2005, I figured the resources are not that constrained because a, I have my own money. I can invest in building a start up and b, VCs who had turned me down for Zingy either regretted it and a lot of these [schools in the later 27:24] came in and approached me for money and of course, I’m like, “Look, I don’t need money anymore but you can fund my next business.” So I started thinking through what I wanted to build and Craigslist was really starting to take off and I felt there’s a real option to do something better. And so I actually went to Craig and to Gem and I’m like, “Look, you guys are creating a massive public service to the community by offering this free service but frankly you’re not doing a very good job. You’re not moderating the content so there’s full of spam. It’s full of scam. It’s full of duplicate contents. It’s full of prostitution. Personals is full of murderers.” There’s a pretty easy I mean it takes a lot of work. You need to hire a thousand people to moderate the content but there are things we could do to improve the quality of trends and by the way, think of who are the primary decision makers in all household purchases. It’s women. Women decide the house that you buy, the babysitter than you hire, the cloth that you are buying, the car you’re driving, and you need to create an environment that’s extremely safe and friendly to women and Craigslist was really the most horrible environment for that. So I went to them and like, “Look, I’ll run it for free. Let’s take this platform and let’s make it something magical and let’s change the lives of hundreds of millions of people. You don’t even need to give me anything. You maybe give me some equity on the [28:48] schedule and if you don’t like me after one year, before I mess, you fire me.” But they didn’t care. They didn’t want to improve it. They liked it the way it was. They don’t want to improve the product. They don’t want to improve the services. So then I tried to buy them and they also said no and so I’m like okay. Maybe I can do something better. And I guess OLX was born then and I’ve been brainstorming with a friend from McKinsey who did become a venture capitalist, Jeremy Levine Bessemer, and yeah, we tried to buy a few classified sites and the Founders said, you know what, let’s go and build it, and so raised 10 million from Founder’s fund, General Capitalist and Bessemer. And I partnered with my old buddy, Alec Oxenford whom we cofounded DeRemate with. DeRemate was a Mercado Libre at that point. So they’re also freedom alec and the big chunk of the team with Jose Marin who had been one of the Parco founders of DeRemate. And we decided to build OLX as cofounders using the DeRemate core tech team which had been built on the Aucland platform so it’s like Aucland platforms we knew in a way classified is simpler than auctions. And we’re like okay, let’s build a better Craigslist for the world and let’s see what happens. I mean ideally it would have worked in the West, it would have worked in the US but we launched in a hundred countries. We spent like 50k a country to see where we could get some traction and it just so happened that it took off in four which were Portugal and Brazil and India and Pakistan. So we went from 104 and then we grew there and once it became very big and profitable and successful in those and we reexpanded to the other countries little by little.</p> <p><em>Alejandro:</em> &nbsp; Got it. I remember I saw an interview with your cofounder and people were like really impressed that he would go to India before going to Argentina where he was from. So really interesting strategy there. So you guys ended up selling, so it was an acquisition done by Nasper, is that right?</p> <p><em>Fabrice:</em> &nbsp; Yeah, we sold to Naspers. Look, the reality is this is a company I would have rather not sold. And I didn’t want to sell it because it’s very rare to build platforms that touch the lives of hundreds of millions of people, and we had 350 million users. We had that type of scale. I mean first of all you have a wonderful impact on the lives of so many people and every day we were getting like thousands of love letters from people telling us we’re changing their lives for the better. Some woman that [31:32], she fell in love with her husband again because she was able to get a babysitter or go on dates with him or someone who needed to make rent and like sold their couch and made money to make rent, or found jobs or millions of people who were making and living off the site, and this especially in very poor countries where no one is investing in internet there, no one is creating sources for them and so creating marketplaces or places like Pakistan or all the countries of Africa, people really enjoying and valuing and the effort and the [32:05] we’re creating especially we’re bringing trust and safety in markets where there is no underlying trust. And so we’re allowing these to actually happen and create a site that became very, very, very large. Now once you have something that big, also everything you do is statistically significant and so you can keep testing. When you have that many users you release a feature and kind of immediately you know if it’s going to work or not. And with that type of scale, you can do tests where—or you got a 1% improvement is a massive internet outcome, and so disruptive product change you know become the sum total of 1% improvements done a thousand times over. And it’s easy to do when you have that scale. If you have much smaller scale, if you have 100 users or 1,000 users, it’s really hard to do because nothing is really statistically significant and you can’t tell if it’s just a fluke if something happen or if it’s actually a real impact from your product decisions. So it makes actually improving your product testing a lot harder and it takes a lot longer. So it’s not a company I want to sell. My dream would have been a VC-owned founder and [runback 33:13] for the rest of my life. The problem is classifieds is a winner takes all business. It’s not winner takes [33:20]. It’s literally winner takes all. And in order to succeed two things. You need market share and typically you need an 85% market share in any given country, and number two, you need scale, and you need both of these things. If you have market share but not scale, someone can still take in, come in and take over. And if you have scale but no market share you can’t monetize. And so we had market share in many countries especially in Brazil, India and like in many of the emerging markets but we didn’t yet have scale. But that said, for a long time we were profitable. We’re happy and everything was great. The issue is we were facing a public traded competitor and multibillion dollar company out of Norway called Chipset. For a long time, they were fat and happy in their geographies. They were in Western Europe in the Nordics and very profitable, doing very well. And we were kind of fat and happy and emerging, I mean much less fat because we’re startup but we’re doing really well. And sadly they decided to come and attack us in all core markets and they spent hundreds of millions on TV in Brazil. They spent tens and millions on TV in Portugal. We shoot two markets on account of all our revenues and all of our profits. And so all of a sudden we found ourselves having to stop monetizing, increase spending dramatically, spend hundreds and millions on TV to fight back. And in 2010, imagine going to VCs in the US telling them, “Look, I need to raise a few hundred million to spend on TV in like Zimbabwe. It’s not a—it [34:53] overall. Maybe it would have been different today with the vision funds but in 2010 our American VCs didn’t have the appetite to go and spend hundreds of millions on TV to compete with Chipset. And so Naspers came in and offered to both buy us and invest in us and the important part was the investing part, like we needed capital to fight. And they proved to be a very aggressive acquirer because every time we go to them say, “Hey, we need 100 million.” They’re like, “No, no, no, no. You think you need 100 million what you really need is you need 200 million. And so they were amazing from that perspective because they gave us a really big war chest to fight. And with that war chest, we’re able to fight back and frankly win the war so ultimately we merged versus Brazil, 51% for us, 49% for Chipset and then that consolidation led to the company becoming very profitable and very successful. And so we sold out of necessity, frankly we rather not sold, but it turned out to work really well because we got the capital we needed to win the war and once we had won the war, then we became profitable again and so the core markets were the position expand to a lot of geographies.</p> <p><em>Alejandro:</em> &nbsp; Got it. Got it. So I mean after OLX the experience you decided to shift gears a little bit and you started FJ Labs and you have a basically portfolio companies that have been very, very successful like Uber, BnB or Dropbox. How do you decide really to go to the other side of the table as an investor?</p> <p><em>Fabrice:</em> &nbsp; So I never decided I wanted to be a venture capitalist or an investor but what happened is by virtue of being a consumer facing CEO for all these years, a lot of the entrepreneurs had already been approaching me for investments and advice and so after my exit in 2004 from Zingy, I’ve already started investing pretty aggressively on startups. And so by 2013 when I left OLX, Ashley already had made over 100 angel investments. In fact in many ways, I was more known as an investor than a—even though I was full time CEO in massive company, the thing is you see one company and your investor in a hundred, the more visible in a way as an investor than a CEO. And so many people thought of me as an investor already even though most of my time allocation was to being a CEO because I’m running this massive company but for me from a number of deal perspective you know so I decide I was only going to invest in the marketplaces and come up with like a thesis in US [37:21] invest pretty quickly. So in 2013 when I left OLX, I’m like you know I like building companies. I like investing. At that point I already pulled all my investments with my current partner at FA Labs, Jose Marin. And we’re like, you know, we like to do both these things. Maybe we can create a structure which is FJ Labs that allows us to do both of these things where every year we can build one or two companies that we cofound and be on the board of and play an operating role in and every year we can also invest in like 75 different startups. And so the thinking was never, oh, let’s become an investor. It’s like I kind of always have been my entire life both an investor and an entrepreneur. And so this was just the next step in the natural evolution of like let’s continue doing what I’m already doing in a more structured and formal way.</p> <p><em>Alejandro:</em> &nbsp; Got it. So how many investments have you made so far?</p> <p><em>Fabrice:</em> &nbsp; So total we’ve made over 400 investments where every year on average we’re investing in like 75 companies. And we’ve had over 150 exits. And on these exits, we’ve had an average 70% IR in x multiples so it’s gone really, really well on the investing side. And then every year as I said we’ve been building one or two companies and it’s gone really well from that side as well.</p> <p><em>Alejandro:</em> &nbsp; That’s amazing. You know we have a few people in common, Fabrice, like for example, Enrique Linares from Let Go or Ander from Ticket Biz and they told me that you are one of those investors that is like truly authentic and you have their back. I mean it’s remarkable.</p> <p><em>Fabrice:</em> &nbsp; I think it’s, look, if you’ve been an entrepreneur you know what it’s like to be an entrepreneur so you can relate to them like you understand what the issues they’re facing. You can tell them—you can have a very honest discussion with them on strategy, fundraising, etc. And I thought long and hard of like what my core value at should be as an investor and I think it’s actually helping them with the things that I’ve been through and frankly fundraising. So I actually spend a lot of time helping the company’s portfolio fundraise and introduce them to VCs because I feel FA Labs is very different from traditional VCs. We’re not taking board seats. We don’t even expect reporting if you don’t want to give us reporting. We’re not leading RAS. We’re not pricing RAS. We’re just like the friendly coinvestor who’s giving advice and be helpful, but as a result we don’t compete with VCs. And so we coinvest alongside VCs and so they invite us in a lot of their deals and more importantly we send them all of our deals. So all of our C deals will go to A. We send them to all the VCs who invest in A and VCs were happy. They entrepreneurs were happy. Of course, we’re happy because we get our companies funded.</p> <p><em>Alejandro:</em> &nbsp; Got it. And I mean it’s a lot of companies, Fabrice. How do you track all these investments?</p> <p><em>Fabrice:</em> &nbsp; First of all, FA Labs is a big team these days. I mean when you include the apprentices, the IRs, the back [40:18] etc, there’s like 18 of us. Maybe just as—more importantly, we built a portfolio management tool that tracks all the investments, a product called Kushim, K-U-S-H-I-M. It’s kushim.vc and so now we have a head of platform, someone wonderful who enjoyed this as an apprentice while she was at Columbia Business School then joined us to help us actually build a closer relationship between a lot of the portfolio companies, understand their needs where they’re at and see if there’s anything we do to help them. And so Kelly has been really helping us build a tighter and closer connection to all the companies in the portfolio.</p> <p><em>Alejandro:</em> &nbsp; Got it. And I can say part of the investment I mean is you were sharing that obviously marketplaces is something that you are excited and passionate about. Is there a specific industries that you’re really excited about right now that are unfolding?</p> <p><em>Fabrice:</em> &nbsp; Yes, so the way people are—because we have a thesis, so we think what the future looks like and then we invest along these thesis. We invest in all industries, kind of in all geographies, kind of an all stages actually. Though obviously we do more seed and more US deals than anywhere else but to give you some sense of portfolio composition: we’re 70% US, 20% Western Europe and the Nordics, 10% Brazil and India. From a stage perspective, we’re 65% seed/pre-seed, 25% A and B, then 10% late stage and industry where frankly cross all industries. Now that said, the specificity of focus which is the business model which are marketplaces and in marketplaces, there are three core thesis that we’re investing in. One is the continued verticalization of the horizontal platforms. It’s realizing that from eBay to Thumbtack to Upwork to Craigslist, you can actually take some categories and you can create a much better user experience, much better customer service, a better business model, and so verticalizing the horizontal is just one core thesis that we’re following. Number two is changing the way the marketplaces work. So in the old days, I mean think of the Craigslist of the world, the buyer and the seller they needed, you need to interact. You need interact in fact with [42:39] many different sellers or many different buyers to get one transaction done. It’s a lot of work. The new approach is one where the marketplace picks the supplier for you and you don’t need to pick them or interact with them. So think of Uber, you’re not picking your driver or if you go on Thumbtack, you want to hire someone to redo your floor, you need to talk to like a lot of floors, you need to pick one, you need to agree on a price and a contractor. It needs a lot of work. There’s a platform called Renovisa where you basically take photo of your floor, give your square footage and you’re done. They pick the—they price it out for you. They are the counterpart even though it’s marketplace and they pick the supplier. And so that’s an approach we’re doing in every category be at services, it could be online services so the Upwork type products or services, finding a developer or you know actual services of like renovating your home or maybe redecorating, etc, or and goods. And the third thesis is B2B marketplaces. And so we’re realizing that in the B2B world, a lot of transactions are still happening the old fashion way, through rolodex, through the old voice network, through Excel and email. No one has built a real marketplaces. So we’re bringing the best practices of the consumer world with B2B world.</p> <p><em>Alejandro:</em> &nbsp; Got it.</p> <p><em>Fabrice:</em> &nbsp; So that’s the current thesis. And [44:04] thesis then we meet the businesses and it’s like okay, do we like the team? Do we like the deal terms? And do we like the business? And do we like the business I mean there’s a whole bunch of variables in there like market size, business [44:17] etc, but one core key component for us is unit economics. And does the company kind of recoup their customer acquisition cost within six months? Do they get three times their customer acquisition cost in that contribution margin for the first 18 months and hopefully can the LTD be way more than that? And if when we need a company and basis of two one conversations, we get comfortable with they meet our thesis and we’re comfortable with the team, we’re comfortable with the deal terms and we’re comfortable with the business, then we invest. So we decide very quickly. On average, it takes us less than a week to decide if we’re investing in a company.</p> <p><em>Alejandro:</em> &nbsp; That’s amazing. So I guess obviously the early stages people is really big component. So I guess what kind of pattern say, Fabrice, do you see in founders that have that success potential?</p> <p><em>Fabrice:</em> &nbsp; We find that the best founders, in a way it’s unfair or amazing storytellers because when you’re an amazing storyteller and you have great control of your numbers and your vision, you’re going to be able to raise money at every stage. You’re going to be able to hire better people. You’re going to be able to talk to them to the press. So the excuse in a way in favor I mean favourably towards extroverts versus introverts but people who are amazing storytellers but obviously who are smart and greedy and at the top of their numbers or in a better position to raise than others [by the eye 45:56]. I mean clearly if you have to pick though the one variable, the one thing that you want the most to succeed is frankly is [46:03] over everything else but if you have a greedy storyteller, you kind of hit the homerun in terms of what you want to have.</p> <p><em>Alejandro:</em> &nbsp; Got it. Got it. So if we have to go back to the days at Aucland, Fabrice, and you were able to give yourself just one piece of advice to your younger self and perhaps something that other founders can obtain some value out of it, what would be that piece of advice that you would give to your younger self as an entrepreneur?</p> <p><em>Fabrice:</em> &nbsp; Well, there are many, there are three, well there are four main mistakes I did them or three main mistakes and one where there’s optionality but definitely I should have picked a different VC who understood me better and whose interests were aligned with me. Two, I should have had a tag, sorry, drag. Three, I mean there is an option to do a secondary and get some liquidity. During the transaction, I didn’t do that because I felt I wanted to be very aligned but I probably should have taken a little bit of the money off the table because it would have helped me for the next companies and frankly allowed me to have, be able even pay rent. Possibly I should have sold the company when eBay made the first offer. I mean unclear because they offered 20 million. In 1998, I’m like, “We just launched.” I would have made 15 million but the reality is not doing that led to the $300 million offer like a year later which was a very—would have been a better ad com had I been in a position to sell. So I could have gone both ways on that one. In both cases, the offer was higher than the company was worth so it warranted thinking about it in a more thoughtful [48:00] than I did. So a lot of losses. Well now that said, if actually I had been able to sell you know for 300 million when I and I had 40% of the company at that point. When I was 24 and I made $120 million, you know, things might have turned, I mean you can say, “Oh, you would have been on the trajectory and succeeded way more since then.” But at the same time perhaps I would have been an insufferable arrogant prick, you know, and/or thing these things come so easily I have wasted it all. I mean it’s unclear that it would have led to different outcomes from where I am today or better outcomes from where I am today. Partly who I am today comes from the hard losses that came from at that time when I didn’t monetize. I made a lot of key mistakes everything from hiring to easy selecting to good contract negotiating to thinking [48:53] exits that allowed me to not make those mistakes and improve on them on go forward basis. If things come too easily at first, maybe you think they keep coming easily and I wouldn’t have necessarily learned the hard way. I mean there’s something to be said for like learning the hard way and putting in the work, when you look at like these artists or these athletes who make hundreds of millions of dollars end up going bankrupt, in a way things because things maybe came too easily and they felt it would keep going forever even though it doesn’t so they don’t actually understand or learn the underlying principles that really lead to lasting viable success.</p> <p><em>Alejandro:</em> &nbsp; Absolutely. You know, the other day we had Ander from Ticket Biz and we had a really nice conversation and he mentioned that one of the best pieces of advice that he got before he actually went on to take on the deal was from you. And you said, “This is your first company. How much more risk are you willing to take? Maybe you want to take a look at selling or you know you want to stick it around and increase the risk?” But he did mention, Fabrice, that that was one of the best pieces of advice that he got. So I’m sure that all the founders that you worked with, we see but tremendous amount of value from all these experiences and…</p> <p><em>Fabrice:</em> &nbsp; Yeah and I never told you how I end up investing in the company. I was in Buenas Aires in the OLX office and I did a Skype call. He was in Bilbao if I recall correctly. And we did the call. I love the pitch. I love him on the call. On the call itself, I committed $350,000 investment or whatever and like so I think it was one hour Skype call. I was like, “I’m in. I’m investing. Just send me the docs.”</p> <p><em>Alejandro:</em> &nbsp; Wow.</p> <p><em>Fabrice:</em> &nbsp; And so that level of turnaround and decisiveness, something that entrepreneurs appreciate because they rarely get it from VCs beyond the advice.</p> <p><em>Alejandro:</em> &nbsp; Yeah, absolutely. And that was 165 million. So I’m sure you guys did very well on that.</p> <p><em>Fabrice:</em> &nbsp; We did very well and we continue to build the relationship with them ever since and you know now we co-invest together in new deals and we back him at whatever else he does ever again.</p> <p><em>Alejandro:</em> &nbsp; That’s fantastic. Well, Fabrice, you’ve been very generous with your time. So what is the best way for folks that are listening to reach out and say hi?</p> <p><em>Fabrice:</em> &nbsp; I guess Twitter or LinkedIn or Facebook, frankly all three I’m reasonably reachable and they can follow me on my blog where I write about everything and anything. It’s just fabricegrinda.com.</p> <p><em>Alejandro:</em> &nbsp; Got it. Well, Fabrice, it’s been an honor to have you. I definitely learned a lot and I’m sure the people that are listening as well. So thank you so much for being part of the show today.</p> <p><em>Fabrice:</em> &nbsp; Thank you for having me.</p>

<p>I had the pleasure of running into Alejandro Cremades at the latest Founders Forum in New York. As &hellip; <a href="https://fabricegrinda.com/great-interview-podcast-in-forbes-with-alejandro-cremades/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;Great Interview &#038; Podcast in Forbes with Alejandro Cremades&#8221;</span></a></p>

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Great Interview &#038; Podcast in Forbes with Alejandro Cremades. Categories - Entrepreneurship, Interviews &amp; Fireside Chats. Date-Posted - 2018-11-07T15:14:36 . I had the pleasure of running into Alejandro Cremades at the latest Founders Forum in New York. As luck would have it, he had prepared the angel investor ranking for Forbes where I was named #1. He wanted to talk to me about my entrepreneurship journey and what we are up to at FJ Labs. I am reproducing the Forbes interview below: With over 400 startup investments and 150 plus exits Fabrice Grinda is unquestionably one of the most experienced entrepreneurs and investors on the planet today. If anyone knows what it takes to build a scrappy and scalable startup, and how to cash in on one, it’s got to be Fabrice. In a new episode of the DealMakers podcast he pulled back the curtain on his biggest mistakes and how to hit home runs, again and again as an entrepreneur and also as an investor (listen to the full episode here). Super angel, and startup entrepreneur Fabrice Grinda has built and sold multiple companies, as well as investing in some of the most successful ventures you wish you had been in earlier. Those include Palantir, Airbnb and Alibaba Group. Joining the world’s top M&amp;A experts, startup fundraisers, and angels, Fabrice gave an exclusive interview with the DealMakers podcast detailing how he got started, what he’d do differently now, and how he picks the entrepreneurs that receive his investment. Scrappy Startups, $300M Exits &amp; Impactful Marketplaces After finding his passion for tech with his first PC at ten years old, Grinda got his feet wet in entrepreneurship with an import/export business to pay his way through college. That company moved high end computers from the US to Europe. After finishing Princeton he went to McKinsey to hone his skill and business acumen. That first venture put $50k in Fabrice’s pocket. $25k went to a down payment on a one bedroom apartment. He sold it for $70k more than he bought it for 18 months later. The other half he invested into 4 stocks: Microsoft, Intel, Amazon and Yahoo. Those investments soon grew to $300k. He put all of it into his own startup. That company went on to raise $60 million in capital, before getting a $300M cash buyout offer from eBay. Unfortunately, his lead investor at the time didn’t want to sell. He let his partner buy him out at a much lower price after the bubble burst. Then there was Zingy. Launched in 2001, there wasn’t much in the way of capital in the market for a mobile game and ringtone startup. Fabrice told DealMakers listeners “I ended up living in New York essentially at $2 a day, slept at the office in the couch. I showered in the office. I couldn’t even afford coffee. I was living off ramen noodles. We missed payroll 27 times in the course of two and a half years. I was raising money but I would raise it in 5k or 10k increments.” There was a point where money ran dry and the company missed payroll four and a half months in a row. Staff shrank from 27 to just 7. Over several years he still managed to raise $1.4M, but in $5k to $10k increments. Despite the challenges Zingy became a huge success. Owning over 53% of the company, Grinda sold it in 2004, for $80M in cash. The investors pocketed a 20x return. Out of that windfall of money he bought himself a TV, Xbox and two tennis rackets. He stayed living in a studio apartment, too busy building a larger company to really get sidetracked by the money. Despite hiring an investment banker who turned an initial $40M unsolicited offer for that company into an auction which yielded double that, and completing the sale, he stayed on as CEO for 18 months. Of course, as most entrepreneurs realize at this stage, things just don’t work like they used to after a sale. He decided “if you’re not going to let me conquer the world, this is not interesting to me,” and left to start a new venture. After offering to fix Craigslist for free, and finding the founders were uninterested in improving the platform, Grinda cofounded OLX with Alec Oxenford. They received $10M in startup capital from Jeremy Levine (Bessemer Venture Partners), the Founders Fund, and General Catalyst. OLX launched in 100 countries, testing each market with $50k to see where they could gain traction. Of course, when you build something with 350M users that consumers love, you get a lot of competition and people who want to buy you. That led to another large exit. The Most Meaningful Moment in the Life of an Entrepreneur You’d think some of these big exits, notable investments or the millions and millions of dollars would be the big life changers someone like this would point to as their big successes. Yet, Fabrice says “What’s interesting though, was most meaningful moment in my life at that point was actually not the day of the exit or the day that we got the $80M. It’s the day we became profitable. The day we became profitable and I paid back my credit card debt of $100,000. We made payroll and we paid the rent, etc. We were saved, and I knew we had become the masters of our own destiny. We no longer depended on third parties.&#8221; The 4 Biggest Lessons Learned from 400 plus Startups On the mistakes and things Grinda says he would tell his younger self, he points out: Picking a VC who understood him better, and had aligned interests Understanding the benefits of having ‘drag’ rights in shareholder agreements Consider taking more liquidity earlier The importance of your direct relationship with the partner at a VC firm Hitting Home Runs Together with Jose Marin, Fabrice now operates FJ Labs. A VC firm that invests in around 75 companies a year, as well as launching one or two new startups of their own. FJ Labs invests around the globe in all stages of startups. In terms of picking founding entrepreneurs to bet on, Fabrice says “over everything else, if you have a great storyteller, you have someone who is going to be able to raise money, attract talent and sell the company to partners and potential buyers.” Find out why these entrepreneurs have an edge, how much he has given them over a simple Skype call, and all of the other secrets revealed in the full podcast episode. Full transcript of the interview Reproduced from Alejandro’s blog Alejandro: &nbsp; Alrightee. Hello, everyone, and welcome to the DealMakers Show. So today we have someone very, very exciting, someone that has done a lot for the startup ecosystem and someone also that has been there and has done it. So Fabrice Grinda, welcome today to the DealMakers Show. Fabrice: &nbsp; Thank you for having me. Alejandro: &nbsp; So you’ve been, normally, I mean we typically interview people that have done is you know maybe once or maybe twice but in terms of like doing a transaction whether that is an exit or fundraising, but you’ve done it all and you’ve done it all from all different fronts, from the entrepreneurial side of the table, from the investor side of the table. But I’d like to begin today with really the entrepreneurial side. So how many companies have you founded and exited by now? Fabrice: &nbsp; Yeah, it’s actually a little bit harder to count because it depends if you include first, my first company that helped me pay for college was a little sole proprietorship whereas doing import/export of high-end computer from the US to Europe to France where I was before so if you think of like companies where I was founder and CEO that were ventured bats, so I’m actually limiting the scope, it’s three large companies; one which was a company called Aucland. It was an ebay type company for France; one was Zingy which was a mobile content company selling ringtones etc from 2001 to 2005 and that one from 0 to 2 million revenues in four years; and the last one was OLX which is the largest classified site in the world with over 350 million unique visitors a month and 3,000 employees. Beyond that, I’ve also founded and roll up chairmaned another six or seven companies where I was cofounder sometimes acting CEO but usually chairman. Alejandro: &nbsp; Got it. So let’s talk about the side of the equation of really being a cofounder and a CEO. So I understand that you want to Princeton then you went to McKinsey and then you got started with the first one, right, Aucland. So this is a company that you had Bernard Arnault from France Financing. So how does this company really come about? Fabrice: &nbsp; Yeah, I went to Princeton maybe you know I was already a tech nerd. I grew up in the 1908s. I got my first PC when I was 10 back in 1984. So I grew up like programming, building computers, building PBSs and my role models already at that time I guess Bill Gates and C. Charleston. I went to Princeton knowing I would be a tech entrepreneur, definitely be an entrepreneur like they were though the internet didn’t really exist in the proper form given that I went to Princeton in ’92. We were online and we had like direct 10 megabits T one lines in a room but Mosaic only came about in ’94 and SK in ’95. Now in Princeton as I said I built a company to export computer coming from the US which paid for college. The thing is at that time I was very much like Sheldon Cooper. I was an introverted, shy, frankly academic. And even though I was getting all these A+s and was really good in school, I felt I didn’t have the toolset to succeed as an entrepreneur. And so when I graduated from Princeton and I was like at the top of my class, I decided to join McKinsey because I kind of considered it as business school except they pay you. And for me, where I was in personal development, you know, I was 21 years old, it made a lot of sense and I learned all the things I need to learn. I’ve improved my oral and communication skills, my ability to work in teams, like public speaking classes. McKinsey is really good in investing in these people but again I went to McKinsey knowing I wanted to be a tech entrepreneur. I never saw it as the end all be all where I was going to spend the rest of my professional career. And I actually went there thinking I would miss the bubble but lo and behold, in 1988, I was 23, I did not miss the bubble. I felt I have learned what I needed to learn and decided to go and build a company. The issue of course is when you’re 23 and especially back then when things were more complex, took more money and more time, a lot of things were out of my reach. I had a lot of great ideas. I want to build the internet bank because I boasted in working in financial services in McKinsey but in order to do that you needed a banking license. You needed like millions of capital, things I didn’t feel would be available to a 23-year old. And if you think of companies like Amazon, where you need like supply sheet management and logistics and inventory, then again it way more capital than what was available, but at Princeton I’ll tell you the economics and I like the way markets and marketplaces create, you know bring transparency and liquidity to otherwise [04:57] fragmented market. And so that idea of creating markets in general appealed to me regardless of the category [05:04]. And kind of randomly fell on the ebay website and kind of fell in love at first sight of like, wow, like this is a really interesting truths of taking what was fragmented in these types of markets and garage sales, etc, and putting it online and bringing massive liquidity. So I decided, oh, I should do this and I should do this in Europe. And kind of coincidentally just after that, they felt to go public so they published their S1 which kind of became the base of my business plan and I sold everything I had. I left McKinsey and in July of 1998, I moved back to France to bring the internet and to bring auctions and Aucland to France. Alejandro: &nbsp; Got it. And you raise for this company 18 million and then you went on to do an exit to get this company acquire and sold the stock to one of the investors. I guess from this transaction… Fabrice: &nbsp; Well, yeah, not quite. Alejandro: &nbsp; Okay. Tell us the story. Fabrice: &nbsp; So I sold everything I had. I left Princeton with like 50k in the bank because I built my first startup but that 50k did two things; 25k I bought a one-bedroom apartment for $115,000, the rest of course was a downpayment and so I borrowed mortgage. I sold it for 185k eighteen months later. The other 25k I invested for stocks in Intel, Microsoft, Yahoo and I can’t remember the other one, and sold that. I made like 300k. And so net of taxes I like 300k. So I put all that 300k in the start up and started building the site, hired the team. And while we were competing mostly with people that were technically focused, no one had thought okay, how do you build liquidity. And so we hired category managers from like coins and stands and all different categories and we had aggregated a lot of inventory. So we launched with actual supply acquisitions strategy and more content that was appealing and attractive than our competitors, and then the bubble started inflating and though it took a while talking to many VCs and getting many no’s, as we were contemplating, I got an offer from Bernard Arnault’s fund called Europe @ Web for 18 million. The reality is actually even then there was an option, I could’ve sold to eBay at the time for about 20 million but being a delusional 24-year old at that point, I didn’t realize how much money that was and how life-changing that was. I’m like, yeah, I’ve conquered the world and buy the what-not. I’m doing this for money anyway. So I said no, I raised money and we used it to grow. We ultimately raised a lot more money. I think in total we ended up raising 50 or 60 million. The outcome was not as great as I would have hoped it to be before for mobile reasons we then had a really, we ended up at the top of the bubble and the peak like February 2000, and got an offer from eBay and I think 300 million in cash but we’re socked. I remember eBay was a great company. Sadly, I couldn’t convince Arnault to sell and frankly he didn’t want to sell because he liked to be the industrialist who understood the internet. And so his interest and incentive was actually just to make sure to hold it tight forever so ultimately I sold – when we realized our interest were not aligned, and he wanted to sell frankly to another company who was investor which was in a different business model which is called [08:34] Ricardo, I sold to him and he sold to [08:36] Ricardo. So it wasn’t a great exit. The bubble at first and the valuations are a lot lower and I didn’t sell in the right time, at the right conditions, at the right people. It’s amazing the learnings but definitely one that was financially very fruitful. Alejandro: &nbsp; Got it. So I guess now talking about the learnings like from this experience itself, what was your biggest learning? Fabrice: &nbsp; Many learnings have—when you’re picking a VC it’s really like you’re getting married. They are the people that are going to be on your board for better or worse and they need to be by you and stand by you in the bad times especially. And the issue is Arnault offered the highest valuation and the most money but his team didn’t really come from the industry. They didn’t really understand what I was doing and frankly, many of them were actually jealous and so they were not the right investor and I should’ve raised even though the valuations were lower and the capital offer was lower, I should’ve raised to someone who really got what we were trying to do and whose interests [09:42] ambitions were more aligned. And that’s generalized, I mean when you’re raising money, you’re actually not raising from let’s say Sequoia. You’re actually raising it from that partner who is at that firm. And so what really matters is not the reputation of the firm nor frankly even the reputation of the partner, it’s your personal relationship with that partner. How do you get along with them? Did you have rapport? And do you think you’re going to be in camp, they’re going to support you in the time of need? And so really picking your VC correctly is a skill and especially as first time entrepreneur, we have a tendency to overweigh valuation and overweight capital raised as opposed to picking the person who’s really the right partner for that company for you personally on the go forward basis. And perhaps, you should be raising too much and too high price because then you price yourself out of exit. You’re pricing yourself of perfection and screening issues that we don’t actually think about whenever you’re euphoric and everyone is sort of [10:45] and everything is great. And so trying to like right size the valuation, the investment, etc makes a lot of sense as well. And then of course I learned a lot more about like you know the thing is you can’t be that young and naive. I didn’t pick necessarily the right lawyer. They didn’t take me seriously because I was so young and it was France. And I didn’t know anything like what’s a drag, what’s a tag along, what’s pre-emptive rights and the one [11:10] that would change everything in my legal contract would have been if we had a drag that we could have sold when eBay offered to buy, and we would have that, and so a lot of those mistakes. Also a lot of mistakes on the hiring side, the VCs were lobbying for me to hire people with experience and gray hair. The issue is they were more used to larger organizations where everything had to be by consensus as a result things moved, once I hired them, things moved slower. And it’s great to have people with experience but you need people that also have a cultural fit and/or willing to move fast and do great things which is the push that was needed in the competitive environment that we were in. And so we didn’t gel necessarily perfectly and so hiring for fit different larger role than I expected on a hiring perspective and I was overemphasizing you know the resume and their background experience. Alejandro: &nbsp; Got it. I mean obviously a really big learning experience for you and then you returned back to the US and you actually started another company. You go at it along with Zingy. So can you talk to us a little bit about Zingy? Fabrice: &nbsp; Yeah. So after the bubble burst and it’s sold and it kind of failed, I was thinking, “What do I do next?” And I spent a fair amount of time soul searching, do you go after McKinsey? Do I go to business school? Do I go and run digital for a media company? And I realized, you know what, at the end of the day, maybe I missed the biggest auction to succeed in life early on and maybe the internet is dead and it was never going to be as big as people expect it to be and as I expect it to be and maybe it was overhyped by you know so what. I didn’t do this to make money. I did this because I like what I was doing. I like creating something out of nothing and I like the process of being an entrepreneur. And the underlying ambition was to be an entrepreneur, to build something out of nothing. And so in this new world of 2001, I had a new set of constraints and constraint was capital was no longer available. VCs were no longer investing and so I needed an idea that could be profitable very quickly with very little capital. And I decided you know my core motivation is being an entrepreneur and in a way the idea that I pursue matters less and it’s just important that it meets the constraints at the time. And so I didn’t particularly like the idea of Zingy which was selling ringtones and mobile games in the US but I felt it was an idea that could be successful with reasonably little capital and can build the profit of a company because I’ve seen it work rather well in Europe and in Asia and the US at that time was way behind from mobile perspective. And so I sold yet again everything I had. I reinvested everything I had and moved to the US where I have to admit the first years were really, really tough. I mean I called VCs, told them I was doing BTC Telecom and every BTC company had gone under like the [14:25]. Every telecom company had gone under. No one wanted to mess anything. I ended up living in New York essentially at $2 a day, slept at the office in the couch. I showered in the office. I couldn’t even afford coffee. I was living off ramen noodles. We miss payroll 27 times in the course of two and a half years. I was raising money but I would raise it in like 5k increments. So I meet to see some guy and can at least give me 10k and yippee, I’d make payroll for this for at least two weeks. And then of course we’d be out of money again. So our employees were like, “I don’t understand. The bank made a mistake yet again with the wire.” They’re really confident where really I just have cash but ultimately I’d find someone else who would give me 5k. So I raised 1.4 million but I really raised them in like 5k to 10k increments over the course of multiple years. And at some point I ran out of people where to raise money from and miss payroll from four and a half months in a row. At that point, we went from 27 people to 7. I guess when we stopped paying people they stopped showing up for work because it kind of makes sense. It was really, really, really rough. But you know, it’s what we’re doing, we laid the foundation for success. No one else is doing this and so little by little we signed all the music companies, little by little we signed all the artists, little by little we signed all the phone companies and once the business starts taking off, it took off like a rocket ship and we survived by building this the old fashion way through profits and cash flow profitability was really what mattered, not even that probability. And I remember very clearly the day we became profitable in August 15, 2003, it was a massive cause for celebration and I knew we were saved. Alejandro: &nbsp; Yeah. I can imagine. And you were talking before that one of your biggest lessons was surround the team and investors. And what was the team like and the shareholding team initially with Zingy? Fabrice: &nbsp; Zingy was completely different because there is not VC investing so it’s not as if I had a choice between who I was investing from. Once you have a lot of term sheets, a lot of VCs you want to invest at you, picking the one that’s best for you for your marriage makes total sense. In this case, it was more desperation. It’s like I need cash, I would take money frankly from whomever was willing to give it to me, and it really didn’t matter. And so it was completely desperate. I had friends who would build a little micro from his families who gave me half million. My father gave me some money. My father’s friends gave me some money. Frankly, random people I met from every walks of life, the friends from McKinsey had given me some money. I really raised from everyone and anyone. There is no constraint. And so it was very different. At the end of the day I also invested everything I had. I own 53.6% of the company. I had a cofounder in CTO who were like 6% and then the rest of the team we hired adhoc, as needed basis. It was rather you know built differently partly because we were so capital constraint. Alejandro: &nbsp; Got it. Got it. I mean I think that the investors probably they were happy with the outcome because Zingy was ultimately your first significant exit I will say. I believe the terms are public. What were those terms, Fabrice? Fabrice: &nbsp; The company, so the first few years, we were really struggling. We did 1 million in revenues in 2002. We did 5 million in 2003, which is when we became profitable. We did 50 million in 2004 and 200 million in 2005. So the company became a rocket ship. I sold it a bit early but as I’ve learned from prior experience, better early than too late. I sold it for 80 million in cash in June of 2004. And I say it on [18:16] all the investors made 20x on the capital they invested. Yeah, everyone had an amazing outcome. All the employees who saved and invested really, really well made millions. So it was a great outcome for all and it was my first large exit. What’s interesting though was most meaningful moment in my life at that point was actually not the day of the exit or the day that we got the 80 million [18:43]. It’s the day we became profitable. The day we became profitable and I paid back my credit card debt of 100,000. I was on credit card debt and we made payroll and we paid the rent, etc, like then we were saved and I knew we had become the masters of our own destiny. We no longer depended on third parties and on the good will of others to survive. And so profitability was really the day that what the most relevant and at the point where we sold, we’ve grown so quickly. We were so busy. I didn’t even take stock. I didn’t realize. I think the only thing I did when I sold was I bought myself a TV, an Xbox and two tennis rackets. And I didn’t realize how much money like I made. I guess net of taxes I made like $26 million. That’s a lot of money and again I didn’t realize that and I still lived in my like studio apartment for another five years like that. We were just too busy you know like building a larger company. We went from I think seven employees when we were at the bottom in like August 15, 2003 to like 200 employees a year later. We have to move like four times every time. We get offices are so big, we’re like, oh, we’ll never fill them, and then we were growing so fast, we like filled them. We were really, really busy and it was really fun times. Alejandro: &nbsp; Yeah. You know I can imagine but it’s interesting so you go from 50 to 200 million, I mean that’s unbelievable growth. So I guess what was the trigger there, Fabrice, to say you know, maybe it’s time to take a look at an exit? Fabrice: &nbsp; The revenue growth was actually independent from the exit per se. So as we were struggling to become profitable, a company had approached us and offered like 8 million to buy and I owned 53.6% of the company. So I was actually on the verge of selling the company for 8 million. But they were a French company and they were taking their sweet time to get the deal done and so by the time the papers started getting done, we had grown and I wasn’t really interested in selling anymore. So then another company came in and offered 10 and another company came in and offered 12. Then another company came in and offered 15. Then another company came in and offered 18. Then another company came in and offered 20. So there’s a 20 million offer on the table but we’re growing really quickly so I’m like, you know what, I’m not selling. So I told all these people and we were talking to media companies from around the world and at the point we’re already being profitable. We started having like a million in the bank and we had signed all – so I’ll talk about what led to that success in the revenue growth. So things were going really well so I decided not to sell. Then it kind of randomly one of our suppliers of content which is a Japanese company that was publicly in the same space came in in March of 2004 and said, “Okay, we’ll buy you. We’re offering an unsolicited.” They came in and said out of the blue, “We’re buying you for 40.” And that was so much we’re like okay, I need to take this seriously. So I hired an investment bank which is called [Broadview 21:47]. We ran an auction and that Japanese company end up winning but in the process of riding the auction we doubled the price and we ended selling for 80. And it also taught me that having a banker in the sale process is very effective. It got the price up significantly, I mean double in this case, but more importantly, they played the role of bad cop while I could be the good cop with the potential buyers. And so you don’t want to alienate your buyers in the process of getting the deal done. And so having someone that you can blame for asking for things and like saying, oh, you’re telling me that this is not market and this is not fair, and blame them is an amazing way of going and it’s totally worth the amount of money. Now in terms of what was driving that revenue growth from like 5 to 50 to 200, we were a B to B to C provider, so we were not directly selling to the consumers. We were selling to the mobile operators. And it just took me two years to get the first contract done and that was a very arduous process. I mean big large companies like Verizon don’t actually want to sign with a little startup because they’re worried about and legendly so but my ability. So I would go through all the telco shows like the CTIAs in the world. I will try to set meetings. I mean at first it’s just to get my name and face out there. They wouldn’t even want to take meeting with me. I had no idea who to talk to, how to get my details. I kind of bribed Microsoft actually at the time they were desperate for revenues MSN to become the ringtone provider in the BTC way and that press release kind of led to random guy Motorola to reach out for us to write content to him, and once we’ve done that, someone at Sprint asked for 25gs of content. That was our first deal. And once that became successful, the Sprint deal, everyone else wanted to do a deal with us because we’re the only ones who had the license to all the content. And so we went from going live on Sprint I guess April 1 of 2003 and at that point we were like down and broke and to every signing and launching every to signing from after that went live, every major carrier approached us and like April, May, June, July. And we had no money and so I sort of coding again and started helping build the site and we started launching and we went live in like AT&amp;T in August 15 and then we went live on like Virgin Mobile in like September 1 and then we went live in AllTel in October. So we started launching all these operators and so a combination of deploying every single operator in the US like the top 20 basically and increasing the product offering and then releasing more and more phones that will support the content led to the massive growth. And so that led it from 5 to 50 to 200. It was an amazing rocket ship and it was an amazing story. Alejandro: &nbsp; That’s fantastic. And this was to For-Side, right. That was the company that acquired Zingy? Fabrice: &nbsp; That’s correct. Alejandro: &nbsp; Got it. And did you have any type of insights or learnings that perhaps you know were different to Aucland when doing this transaction? Fabrice: &nbsp; Well, very different insights in the sense that I realized either having a banker makes a lot of sense, selling them early than later probably also makes sense which just make sure you’re monetizing, taking cash instead of stock. Arguably I sold to the wrong company as well. I didn’t pick the buyer pretty well because I didn’t realize that culture shock. We were on the ground floor of the beginning of the mobile revolution and we were the only ones who had a lot of money and we’re very profitable. We had the opportunity to buy Shazam US for like a million dollars. We could have bought like all these different companies and roll them up and have them be part of offering. I think we would have positioned this to be dominant in the smartphone world once the smartphone started being released and of course the first iPhone came out in 2007. The problem is the Japanese didn’t do that, didn’t want me to do that and getting to approve anything became impossible. And so I offered Shazam for a million, they said no. I mean they kept saying no to all the different things I wanted to do so at the end of the day—I stayed for 18 months because it’s still a rocket ship. It was still a lot of fun but after 18 months, you know what, to just manage it and take all the profits and cash instead of Japan you don’t need, and so I sold and made in June 2004. I stayed CEO until November 2005. And them I’m like, you know, if you’re not going to let me conquer the world, this is not interesting to me, so I left them to go to the next company. Alejandro: &nbsp; That’s OLX, right. Fabrice: &nbsp; That’s OLX. Alejandro: &nbsp; They actually conquered the world and OLX had a massive impact. So tell us a little about OLX. Fabrice: &nbsp; I’ve always wanted to build marketplace businesses, so Aucland, you know and frankly [26:56] in Latin America kind of felt in that mode. Zingy was really the [27:00]. Zingy, I wanted to be an entrepreneur. I’m like what can I do to be—what companies can I build to remain an entrepreneur in the world of constrained resources. But now in 2005, I figured the resources are not that constrained because a, I have my own money. I can invest in building a start up and b, VCs who had turned me down for Zingy either regretted it and a lot of these [schools in the later 27:24] came in and approached me for money and of course, I’m like, “Look, I don’t need money anymore but you can fund my next business.” So I started thinking through what I wanted to build and Craigslist was really starting to take off and I felt there’s a real option to do something better. And so I actually went to Craig and to Gem and I’m like, “Look, you guys are creating a massive public service to the community by offering this free service but frankly you’re not doing a very good job. You’re not moderating the content so there’s full of spam. It’s full of scam. It’s full of duplicate contents. It’s full of prostitution. Personals is full of murderers.” There’s a pretty easy I mean it takes a lot of work. You need to hire a thousand people to moderate the content but there are things we could do to improve the quality of trends and by the way, think of who are the primary decision makers in all household purchases. It’s women. Women decide the house that you buy, the babysitter than you hire, the cloth that you are buying, the car you’re driving, and you need to create an environment that’s extremely safe and friendly to women and Craigslist was really the most horrible environment for that. So I went to them and like, “Look, I’ll run it for free. Let’s take this platform and let’s make it something magical and let’s change the lives of hundreds of millions of people. You don’t even need to give me anything. You maybe give me some equity on the [28:48] schedule and if you don’t like me after one year, before I mess, you fire me.” But they didn’t care. They didn’t want to improve it. They liked it the way it was. They don’t want to improve the product. They don’t want to improve the services. So then I tried to buy them and they also said no and so I’m like okay. Maybe I can do something better. And I guess OLX was born then and I’ve been brainstorming with a friend from McKinsey who did become a venture capitalist, Jeremy Levine Bessemer, and yeah, we tried to buy a few classified sites and the Founders said, you know what, let’s go and build it, and so raised 10 million from Founder’s fund, General Capitalist and Bessemer. And I partnered with my old buddy, Alec Oxenford whom we cofounded DeRemate with. DeRemate was a Mercado Libre at that point. So they’re also freedom alec and the big chunk of the team with Jose Marin who had been one of the Parco founders of DeRemate. And we decided to build OLX as cofounders using the DeRemate core tech team which had been built on the Aucland platform so it’s like Aucland platforms we knew in a way classified is simpler than auctions. And we’re like okay, let’s build a better Craigslist for the world and let’s see what happens. I mean ideally it would have worked in the West, it would have worked in the US but we launched in a hundred countries. We spent like 50k a country to see where we could get some traction and it just so happened that it took off in four which were Portugal and Brazil and India and Pakistan. So we went from 104 and then we grew there and once it became very big and profitable and successful in those and we reexpanded to the other countries little by little. Alejandro: &nbsp; Got it. I remember I saw an interview with your cofounder and people were like really impressed that he would go to India before going to Argentina where he was from. So really interesting strategy there. So you guys ended up selling, so it was an acquisition done by Nasper, is that right? Fabrice: &nbsp; Yeah, we sold to Naspers. Look, the reality is this is a company I would have rather not sold. And I didn’t want to sell it because it’s very rare to build platforms that touch the lives of hundreds of millions of people, and we had 350 million users. We had that type of scale. I mean first of all you have a wonderful impact on the lives of so many people and every day we were getting like thousands of love letters from people telling us we’re changing their lives for the better. Some woman that [31:32], she fell in love with her husband again because she was able to get a babysitter or go on dates with him or someone who needed to make rent and like sold their couch and made money to make rent, or found jobs or millions of people who were making and living off the site, and this especially in very poor countries where no one is investing in internet there, no one is creating sources for them and so creating marketplaces or places like Pakistan or all the countries of Africa, people really enjoying and valuing and the effort and the [32:05] we’re creating especially we’re bringing trust and safety in markets where there is no underlying trust. And so we’re allowing these to actually happen and create a site that became very, very, very large. Now once you have something that big, also everything you do is statistically significant and so you can keep testing. When you have that many users you release a feature and kind of immediately you know if it’s going to work or not. And with that type of scale, you can do tests where—or you got a 1% improvement is a massive internet outcome, and so disruptive product change you know become the sum total of 1% improvements done a thousand times over. And it’s easy to do when you have that scale. If you have much smaller scale, if you have 100 users or 1,000 users, it’s really hard to do because nothing is really statistically significant and you can’t tell if it’s just a fluke if something happen or if it’s actually a real impact from your product decisions. So it makes actually improving your product testing a lot harder and it takes a lot longer. So it’s not a company I want to sell. My dream would have been a VC-owned founder and [runback 33:13] for the rest of my life. The problem is classifieds is a winner takes all business. It’s not winner takes [33:20]. It’s literally winner takes all. And in order to succeed two things. You need market share and typically you need an 85% market share in any given country, and number two, you need scale, and you need both of these things. If you have market share but not scale, someone can still take in, come in and take over. And if you have scale but no market share you can’t monetize. And so we had market share in many countries especially in Brazil, India and like in many of the emerging markets but we didn’t yet have scale. But that said, for a long time we were profitable. We’re happy and everything was great. The issue is we were facing a public traded competitor and multibillion dollar company out of Norway called Chipset. For a long time, they were fat and happy in their geographies. They were in Western Europe in the Nordics and very profitable, doing very well. And we were kind of fat and happy and emerging, I mean much less fat because we’re startup but we’re doing really well. And sadly they decided to come and attack us in all core markets and they spent hundreds of millions on TV in Brazil. They spent tens and millions on TV in Portugal. We shoot two markets on account of all our revenues and all of our profits. And so all of a sudden we found ourselves having to stop monetizing, increase spending dramatically, spend hundreds and millions on TV to fight back. And in 2010, imagine going to VCs in the US telling them, “Look, I need to raise a few hundred million to spend on TV in like Zimbabwe. It’s not a—it [34:53] overall. Maybe it would have been different today with the vision funds but in 2010 our American VCs didn’t have the appetite to go and spend hundreds of millions on TV to compete with Chipset. And so Naspers came in and offered to both buy us and invest in us and the important part was the investing part, like we needed capital to fight. And they proved to be a very aggressive acquirer because every time we go to them say, “Hey, we need 100 million.” They’re like, “No, no, no, no. You think you need 100 million what you really need is you need 200 million. And so they were amazing from that perspective because they gave us a really big war chest to fight. And with that war chest, we’re able to fight back and frankly win the war so ultimately we merged versus Brazil, 51% for us, 49% for Chipset and then that consolidation led to the company becoming very profitable and very successful. And so we sold out of necessity, frankly we rather not sold, but it turned out to work really well because we got the capital we needed to win the war and once we had won the war, then we became profitable again and so the core markets were the position expand to a lot of geographies. Alejandro: &nbsp; Got it. Got it. So I mean after OLX the experience you decided to shift gears a little bit and you started FJ Labs and you have a basically portfolio companies that have been very, very successful like Uber, BnB or Dropbox. How do you decide really to go to the other side of the table as an investor? Fabrice: &nbsp; So I never decided I wanted to be a venture capitalist or an investor but what happened is by virtue of being a consumer facing CEO for all these years, a lot of the entrepreneurs had already been approaching me for investments and advice and so after my exit in 2004 from Zingy, I’ve already started investing pretty aggressively on startups. And so by 2013 when I left OLX, Ashley already had made over 100 angel investments. In fact in many ways, I was more known as an investor than a—even though I was full time CEO in massive company, the thing is you see one company and your investor in a hundred, the more visible in a way as an investor than a CEO. And so many people thought of me as an investor already even though most of my time allocation was to being a CEO because I’m running this massive company but for me from a number of deal perspective you know so I decide I was only going to invest in the marketplaces and come up with like a thesis in US [37:21] invest pretty quickly. So in 2013 when I left OLX, I’m like you know I like building companies. I like investing. At that point I already pulled all my investments with my current partner at FA Labs, Jose Marin. And we’re like, you know, we like to do both these things. Maybe we can create a structure which is FJ Labs that allows us to do both of these things where every year we can build one or two companies that we cofound and be on the board of and play an operating role in and every year we can also invest in like 75 different startups. And so the thinking was never, oh, let’s become an investor. It’s like I kind of always have been my entire life both an investor and an entrepreneur. And so this was just the next step in the natural evolution of like let’s continue doing what I’m already doing in a more structured and formal way. Alejandro: &nbsp; Got it. So how many investments have you made so far? Fabrice: &nbsp; So total we’ve made over 400 investments where every year on average we’re investing in like 75 companies. And we’ve had over 150 exits. And on these exits, we’ve had an average 70% IR in x multiples so it’s gone really, really well on the investing side. And then every year as I said we’ve been building one or two companies and it’s gone really well from that side as well. Alejandro: &nbsp; That’s amazing. You know we have a few people in common, Fabrice, like for example, Enrique Linares from Let Go or Ander from Ticket Biz and they told me that you are one of those investors that is like truly authentic and you have their back. I mean it’s remarkable. Fabrice: &nbsp; I think it’s, look, if you’ve been an entrepreneur you know what it’s like to be an entrepreneur so you can relate to them like you understand what the issues they’re facing. You can tell them—you can have a very honest discussion with them on strategy, fundraising, etc. And I thought long and hard of like what my core value at should be as an investor and I think it’s actually helping them with the things that I’ve been through and frankly fundraising. So I actually spend a lot of time helping the company’s portfolio fundraise and introduce them to VCs because I feel FA Labs is very different from traditional VCs. We’re not taking board seats. We don’t even expect reporting if you don’t want to give us reporting. We’re not leading RAS. We’re not pricing RAS. We’re just like the friendly coinvestor who’s giving advice and be helpful, but as a result we don’t compete with VCs. And so we coinvest alongside VCs and so they invite us in a lot of their deals and more importantly we send them all of our deals. So all of our C deals will go to A. We send them to all the VCs who invest in A and VCs were happy. They entrepreneurs were happy. Of course, we’re happy because we get our companies funded. Alejandro: &nbsp; Got it. And I mean it’s a lot of companies, Fabrice. How do you track all these investments? Fabrice: &nbsp; First of all, FA Labs is a big team these days. I mean when you include the apprentices, the IRs, the back [40:18] etc, there’s like 18 of us. Maybe just as—more importantly, we built a portfolio management tool that tracks all the investments, a product called Kushim, K-U-S-H-I-M. It’s kushim.vc and so now we have a head of platform, someone wonderful who enjoyed this as an apprentice while she was at Columbia Business School then joined us to help us actually build a closer relationship between a lot of the portfolio companies, understand their needs where they’re at and see if there’s anything we do to help them. And so Kelly has been really helping us build a tighter and closer connection to all the companies in the portfolio. Alejandro: &nbsp; Got it. And I can say part of the investment I mean is you were sharing that obviously marketplaces is something that you are excited and passionate about. Is there a specific industries that you’re really excited about right now that are unfolding? Fabrice: &nbsp; Yes, so the way people are—because we have a thesis, so we think what the future looks like and then we invest along these thesis. We invest in all industries, kind of in all geographies, kind of an all stages actually. Though obviously we do more seed and more US deals than anywhere else but to give you some sense of portfolio composition: we’re 70% US, 20% Western Europe and the Nordics, 10% Brazil and India. From a stage perspective, we’re 65% seed/pre-seed, 25% A and B, then 10% late stage and industry where frankly cross all industries. Now that said, the specificity of focus which is the business model which are marketplaces and in marketplaces, there are three core thesis that we’re investing in. One is the continued verticalization of the horizontal platforms. It’s realizing that from eBay to Thumbtack to Upwork to Craigslist, you can actually take some categories and you can create a much better user experience, much better customer service, a better business model, and so verticalizing the horizontal is just one core thesis that we’re following. Number two is changing the way the marketplaces work. So in the old days, I mean think of the Craigslist of the world, the buyer and the seller they needed, you need to interact. You need interact in fact with [42:39] many different sellers or many different buyers to get one transaction done. It’s a lot of work. The new approach is one where the marketplace picks the supplier for you and you don’t need to pick them or interact with them. So think of Uber, you’re not picking your driver or if you go on Thumbtack, you want to hire someone to redo your floor, you need to talk to like a lot of floors, you need to pick one, you need to agree on a price and a contractor. It needs a lot of work. There’s a platform called Renovisa where you basically take photo of your floor, give your square footage and you’re done. They pick the—they price it out for you. They are the counterpart even though it’s marketplace and they pick the supplier. And so that’s an approach we’re doing in every category be at services, it could be online services so the Upwork type products or services, finding a developer or you know actual services of like renovating your home or maybe redecorating, etc, or and goods. And the third thesis is B2B marketplaces. And so we’re realizing that in the B2B world, a lot of transactions are still happening the old fashion way, through rolodex, through the old voice network, through Excel and email. No one has built a real marketplaces. So we’re bringing the best practices of the consumer world with B2B world. Alejandro: &nbsp; Got it. Fabrice: &nbsp; So that’s the current thesis. And [44:04] thesis then we meet the businesses and it’s like okay, do we like the team? Do we like the deal terms? And do we like the business? And do we like the business I mean there’s a whole bunch of variables in there like market size, business [44:17] etc, but one core key component for us is unit economics. And does the company kind of recoup their customer acquisition cost within six months? Do they get three times their customer acquisition cost in that contribution margin for the first 18 months and hopefully can the LTD be way more than that? And if when we need a company and basis of two one conversations, we get comfortable with they meet our thesis and we’re comfortable with the team, we’re comfortable with the deal terms and we’re comfortable with the business, then we invest. So we decide very quickly. On average, it takes us less than a week to decide if we’re investing in a company. Alejandro: &nbsp; That’s amazing. So I guess obviously the early stages people is really big component. So I guess what kind of pattern say, Fabrice, do you see in founders that have that success potential? Fabrice: &nbsp; We find that the best founders, in a way it’s unfair or amazing storytellers because when you’re an amazing storyteller and you have great control of your numbers and your vision, you’re going to be able to raise money at every stage. You’re going to be able to hire better people. You’re going to be able to talk to them to the press. So the excuse in a way in favor I mean favourably towards extroverts versus introverts but people who are amazing storytellers but obviously who are smart and greedy and at the top of their numbers or in a better position to raise than others [by the eye 45:56]. I mean clearly if you have to pick though the one variable, the one thing that you want the most to succeed is frankly is [46:03] over everything else but if you have a greedy storyteller, you kind of hit the homerun in terms of what you want to have. Alejandro: &nbsp; Got it. Got it. So if we have to go back to the days at Aucland, Fabrice, and you were able to give yourself just one piece of advice to your younger self and perhaps something that other founders can obtain some value out of it, what would be that piece of advice that you would give to your younger self as an entrepreneur? Fabrice: &nbsp; Well, there are many, there are three, well there are four main mistakes I did them or three main mistakes and one where there’s optionality but definitely I should have picked a different VC who understood me better and whose interests were aligned with me. Two, I should have had a tag, sorry, drag. Three, I mean there is an option to do a secondary and get some liquidity. During the transaction, I didn’t do that because I felt I wanted to be very aligned but I probably should have taken a little bit of the money off the table because it would have helped me for the next companies and frankly allowed me to have, be able even pay rent. Possibly I should have sold the company when eBay made the first offer. I mean unclear because they offered 20 million. In 1998, I’m like, “We just launched.” I would have made 15 million but the reality is not doing that led to the $300 million offer like a year later which was a very—would have been a better ad com had I been in a position to sell. So I could have gone both ways on that one. In both cases, the offer was higher than the company was worth so it warranted thinking about it in a more thoughtful [48:00] than I did. So a lot of losses. Well now that said, if actually I had been able to sell you know for 300 million when I and I had 40% of the company at that point. When I was 24 and I made $120 million, you know, things might have turned, I mean you can say, “Oh, you would have been on the trajectory and succeeded way more since then.” But at the same time perhaps I would have been an insufferable arrogant prick, you know, and/or thing these things come so easily I have wasted it all. I mean it’s unclear that it would have led to different outcomes from where I am today or better outcomes from where I am today. Partly who I am today comes from the hard losses that came from at that time when I didn’t monetize. I made a lot of key mistakes everything from hiring to easy selecting to good contract negotiating to thinking [48:53] exits that allowed me to not make those mistakes and improve on them on go forward basis. If things come too easily at first, maybe you think they keep coming easily and I wouldn’t have necessarily learned the hard way. I mean there’s something to be said for like learning the hard way and putting in the work, when you look at like these artists or these athletes who make hundreds of millions of dollars end up going bankrupt, in a way things because things maybe came too easily and they felt it would keep going forever even though it doesn’t so they don’t actually understand or learn the underlying principles that really lead to lasting viable success. Alejandro: &nbsp; Absolutely. You know, the other day we had Ander from Ticket Biz and we had a really nice conversation and he mentioned that one of the best pieces of advice that he got before he actually went on to take on the deal was from you. And you said, “This is your first company. How much more risk are you willing to take? Maybe you want to take a look at selling or you know you want to stick it around and increase the risk?” But he did mention, Fabrice, that that was one of the best pieces of advice that he got. So I’m sure that all the founders that you worked with, we see but tremendous amount of value from all these experiences and… Fabrice: &nbsp; Yeah and I never told you how I end up investing in the company. I was in Buenas Aires in the OLX office and I did a Skype call. He was in Bilbao if I recall correctly. And we did the call. I love the pitch. I love him on the call. On the call itself, I committed $350,000 investment or whatever and like so I think it was one hour Skype call. I was like, “I’m in. I’m investing. Just send me the docs.” Alejandro: &nbsp; Wow. Fabrice: &nbsp; And so that level of turnaround and decisiveness, something that entrepreneurs appreciate because they rarely get it from VCs beyond the advice. Alejandro: &nbsp; Yeah, absolutely. And that was 165 million. So I’m sure you guys did very well on that. Fabrice: &nbsp; We did very well and we continue to build the relationship with them ever since and you know now we co-invest together in new deals and we back him at whatever else he does ever again. Alejandro: &nbsp; That’s fantastic. Well, Fabrice, you’ve been very generous with your time. So what is the best way for folks that are listening to reach out and say hi? Fabrice: &nbsp; I guess Twitter or LinkedIn or Facebook, frankly all three I’m reasonably reachable and they can follow me on my blog where I write about everything and anything. It’s just fabricegrinda.com. Alejandro: &nbsp; Got it. Well, Fabrice, it’s been an honor to have you. I definitely learned a lot and I’m sure the people that are listening as well. So thank you so much for being part of the show today. Fabrice: &nbsp; Thank you for having me.

2018-10-01T14:14:49

2018-10-01T14:14:49

https://fabricegrinda.com/?p=9495

2021-05-28T07:08:08

2021-05-28T07:08:08

far-ranging-and-fun-podcast-with-meb-faber

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https://fabricegrinda.com/far-ranging-and-fun-podcast-with-meb-faber/

Far ranging and fun podcast with Meb Faber

<p>I had the pleasure of chatting with Meb Faber, co-founder and the Chief Investment Officer of Cambria Investment Management. He normally covers public market investing which led to a fun conversation about the differences between the two.</p> <p><iframe loading="lazy" style="border: none" src="//html5-player.libsyn.com/embed/episode/id/7087802/height/90/theme/custom/autoplay/no/autonext/no/thumbnail/yes/preload/no/no_addthis/no/direction/backward/render-playlist/no/custom-color/87A93A/" scrolling="no" allowfullscreen="" webkitallowfullscreen="" mozallowfullscreen="" oallowfullscreen="" msallowfullscreen="" width="100%" height="90"></iframe></p> <p>More details on Meb’s blog at: <a href="https://mebfaber.com/2018/09/26/episode-123-fabrice-grinda-were-still-at-the-very-beginning-of-the-tech-revolution-we-are-day-one/" rel="noopener noreferrer" target="_blank">https://mebfaber.com/2018/09/26/episode-123-fabrice-grinda-were-still-at-the-very-beginning-of-the-tech-revolution-we-are-day-one/</a></p> <p><strong>Date Recorded: 9/14/18</strong></p> <p><strong><br /> </strong><strong>Run-Time: 58:49</strong></p> <p>Summary: In Episode 123, we welcome entrepreneur and renowned angel investor, Fabrice Grinda. The guys begin by discussing their mutual love for skiing, talking about heli-skiing in Canada, powder skiing in Japan, and the steeps of Chamonix in France.</p> <p>Meb asks Fabrice to recap his background. What follows is a fascinating look at the professional path of a wildly-successful entrepreneur and angel investor. Fabrice’s history involves consulting with McKinsey, building the equivalent of eBay in Europe and South America, starting another company that brought ringtones, mobile games, and wallpaper to the US (and eventually did $200M in revenues), and then consulting for fellow CEOs. Ultimately, Fabrice and his partner launched FJ Investments, which is where he’s currently focused.</p> <p>Meb asks about Fabrice’s investment approach and the frameworks he uses. Fabrice tells us he invests in about 75 new startups each year, mostly seed and pre-seed. He writes smaller checks (about $500K), as compared to the bigger VC firms. He provides us insights into his selection criteria – one of the most important of which is unit economics. The degree to which a founder understands his/her economics is an indicator as to how well he/she understand the business. Fabrice has deployed about $140M to date, mostly personal money. He’s had 150 realized exits on 400 investments, with a realized IRR that’s pretty staggering. You’ll have to listen to get that detail.</p> <p>The guys hit on a handful of topics next: Fabrice’s experience with Beepi, which ends with Fabrice’s advice to “nail it before you scale it”…. Why investing in the U.S. is often a wiser choice than looking internationally… Fabrice’s preference for investing in marketplace-oriented businesses… And how “we’re still at the very beginning of the tech revolution… we are day one.”</p> <p>Next, the guys talk about the specifics of creating an angel portfolio, with Meb bringing up the phrase “spray and pray”. Fabrice tells us that’s not his methodology. He’s more selective. That said, in private markets, returns tend to follow power law, meaning the top few deals account for most of the returns so it’s important to have some of those deals in your portfolio. Given this, for most people, there’s real value in diversification.</p> <p>Meb asks what lessons Fabrice has learned throughout his experiences so far. Fabrice tells us that if you’re going to invest in this asset class, you need to be diversified. He mentions that if you have less than a certain amount of investments, you’re going to lose money.</p> <p>Another lesson is that investors needs to stick to their guns. For instance, Fabrice has found that his thesis, the company team, the business, and the valuation (deal terms) must all be within his desired parameters in order to move forward. There was a time when he would fall in love with a founder, and would use that as an excuse to slide on some of his other criteria. But doing so sometimes lost him money.</p> <p>Other lessons involve honesty and transparency, as well as the importance of knowing your true value-add.</p> <p>There’s way more in this angel-themed episode: The current angel market, including opportunities and valuations… How Fabrice sees the broader economy and recession risk… How a crypto-hacker got into Fabrice’s crypto wallet… and Fabrice’s most memorable trade. Any entrepreneurs will likely be able to relate to this one.</p> <p>All these details and more in Episode 123.</p> <p>Links from the Episode:</p> <ul> <li>0:50 – Welcome Fabrice and talk about his passion for skiing</li> <li>3:38 – Fabrice’s background as an entrepreneur</li> <li>12:53 – The kind of work he is engaged in right now</li> <li>19:30 – Reinventing marketplaces</li> <li>20:55 – How Fabrice and his partner think about the geography of their investments</li> <li>25:13 – Why his focus on marketplace businesses</li> <li>27:28 – Why their investing approach includes putting money into hundreds of companies</li> <li>32:18 – How they sell their stake</li> <li>34:18 – Lessons learned as an angel-style investor</li> <li>34:20 – <a href="https://mebfaber.com/2018/09/19/episode-122-phil-haslett-its-a-place-to-connect-interested-buyers-and-interested-sellersin-late-stage-pre-ipo-tech-shares/" target="_blank" rel="noopener">EquityZen Podcast Episode</a></li> <li>39:38 – How the investment landscape is looking going forward</li> <li>45:01 – Fabrice’s thoughts on opportunity zones</li> <li>48:01 – Any interesting crypto startups he’s looking into</li> <li>50:27 – Most memorable investment</li> <li>54:30 – Biggest company he missed investing in</li> <li>56:30 – Fabrice’s skiing bucket list</li> </ul> <p><strong>Transcript:</strong></p> <p>Welcome Message: Welcome to the Meb Faber Show where the focus is on helping you grow and preserve your wealth. Join us as we discuss the craft of investing and uncover new and profitable ideas, all to help you grow wealthier and wiser. Better investing starts here.</p> <p>Disclaimer: Meb Faber is the co-founder and Chief Investment Officer at Cambria Investment Management. Due to industry regulations he will not discuss any of Cambria’s funds on this podcast. All opinions expressed by podcast participants are solely their own opinions and do not reflect the opinion of Cambria Investment Management or its affiliates. For more information visit cambriainvestments.com.</p> <p>Meb: Welcome podcast listeners. Today we have a great show for you with a man Forbes recently named as the number one angel investor in the galaxy. They actually said the world. But I don’t know any other angel investors on Mars. He’s an investor in a lot of companies you would recognize including one of our favorites and friends, Betterment, and has invested in 400 companies. He’s not just an investor. He’s also started up, sold, three companies. He runs the startup, studio, and venture fund, FJ Labs, which he co-founded with a buddy of his. We’re thrilled that he’s joined us. Welcome, Fabrice Grinda.</p> <p>Fabrice: Thank you for having me.</p> <p>Meb: You are live from Punto Cana right now. We’re excited to have you on and chat. But before we get to all the serious stuff, I hear you’re a fellow skier. So you’ve gotta let me know what is your favorite ski destination in the world?</p> <p>Fabrice: I’ve been skiing frankly since I’ve learned how to walk, since I was three. And I use a brace. I fell in love with powder reasonably early in my life. And I’ve had the privilege heli-skiing every winter in the Revelstoke area in British Columbia. The area around Kelowna, Revelstoke, Calgary definitely has the best deep steep tree skiing in the world. And it’s by far my favorite.</p> <p>Meb: As the locals call it, Revelstoke, because a lot of times these big storms come in and you get stuck there. We went there a couple of years ago. And it was pretty awesome trip, what people call the powder highway, listeners, which is a bunch of destinations and cat skiing around there. Fabrice, have you been to ski the Empire of Japan yet?</p> <p>Fabrice: I have. I…Hokkaido and…so the Niseko area is absolutely extraordinary. It’s probably the place where it snows the most in the world. The powder is extraordinary. That said, the mountains are not very high and the steep is not particularly…and the slopes are not particularly steep even though it’s an amazing place probably to learn powder skiing. And there’s also this really cool snowmobile up and ski down approach that they have, which is an alternative to heli, which I guess given the amount of snow probably makes sense. I find it somewhat less compelling than actually the Reve [SP] area and the entire British Columbia mountain range.</p> <p>Meb: You get to have ramen for lunch. So it’s kind of…it’s awesome. I love skiing in Japan. I grew up in Colorado so similar story. What was your home mountain? Chamonix, Taward [SP] Valley? Where did you go to?</p> <p>Fabrice: No. So I’m actually from Nice in the southeast of France. So I was skiing in the Southern Alps in [inaudible 00:03:05]. Those were the home mountains. But, of course, I would go to [inaudible 00:03:09] for the longer [inaudible 00:03:14] for racing.</p> <p>Meb: To get back to Europe, the only place I’d skied was Anton. And that was like not even half as much skiing as it was drinking beer. [inaudible 00:03:22], that was the name of the bar. Oh, my God. That’s a…that was a hard one to remember. I think half…</p> <p>Fabrice: I think Europe does Apres ski very well.</p> <p>Meb: Oh, my God. There was like half way up the mountain, half the people…you walk out and they’re like sleeping in the snow. You had to ski down afterwards. It was a mess. All right, listeners. We’ll get into some actual investing topics. You have an interesting background. I wanna spend most of the time kinda on what you’re up to these days with your investing because your approach is a little different than a lot that we talk about.</p> <p>I think it’s important to spend a few minutes on your background to help inform kinda what you’re up to today. People, it’s…I think it helps shape your world view of how you approach investing. So you started out as an entrepreneur. Maybe walk us through kinda your path from undergrad as an econ guy kinda starting companies and entrepreneur on the tech world.</p> <p>Fabrice: I grew up as always a nerd. And I got my first PC in 1984, a Compaq. I was 10 years old. It was, like, love at first sight. So I immediately started programming. I had a modem so I started connecting to BBSs, ultimately build a BBS. I went to Princeton knowing I wanted to be in the tech sector in some way, shape or form. The word tech entrepreneur didn’t really exist yet. I mean, there were Dell and maybe IBM had been created by then. That was it. By kind of virtue of luck and timing, Princeton started installing high speed internet connections in my sophomore year in ’93.</p> <p>So all of a sudden, we had high speed connections to the ancestor of the web in the sense that we were using things like Gopher and [inaudible 00:04:51]. Mosaic wasn’t live yet. Mosaic came out. And that was the very beginning of the web. And then when Netscape went public in ’95, it was obvious there was a bubble that was forming. So Yahoo came out. Amazon came out. And I actually was thinking through whether or not I should do something.</p> <p>But the thing is I graduated Princeton. And I was actually rather good student. I finished off my class with all of these different awards. But I was a socially awkward, shy tech nerd that I never really worked in teams. I wasn’t very socially gifted. And I thought, “You know, if I go and start something, I’m probably not going to succeed. I don’t have any business expertise per se,” even though I’ve built a small startup in college to pay for college.</p> <p>And so I actually graduated from Princeton in ’96 and decided I was gonna join McKenzie Company because it’s kind of like business school, except their pay you. And McKenzie actually does a really good job in investing in his people. And I took, like, oral, written communication classes, public speaking classes and working in teams. And the class was actually super helpful. But I went there as a means to an end.</p> <p>So I went there knowing I wanted to be a tech entrepreneur. And actually I thought I was gonna miss the bubble. But lo and behold I didn’t miss the bubble. And so in ’98, I felt I had learned what I needed to learn. They promoted me I guess from [inaudible 00:05:55] to associate. But, you know, the time has come. I’m gonna build a startup. Now the issue is at that time, I was 23. And it was a lot harder to build startups than it is today. You didn’t have AWS. You didn’t have open source.</p> <p>You needed a lot more capital. A lot of things that I wanted to build…I remember the first idea I wanted to build like…because I’ve mostly been working in fig or in the financial district services industry. An internet bank. You know, you would need like a banking license and capital and things that were probably too complicated. Frankly, they were too capital intensive for a 23-year-old. And the same thing, if you wanted to build an Amazon, too complicated. You need like supply chain management and inventories and logistics. And as an economist, you know, I’d always fallen in love with the idea of bringing liquidity and transparency to opaque and fragmented markets. That’s when I had saw eBay.</p> <p>And I thought it was an amazing idea of like creating a marketplace for things that didn’t necessarily have markets for them outside of like your garage sale. And so I decided to build the equivalent of eBay in Europe and with my partner in Latin America. So I was 23, sold my apartment, quit McKenzie, moved back to France. I raised $63 million. So that time it was…I mean, it was hard at first. Then it became really easy. I mean, people were just throwing money at you, if you had the right pedigree. And Princeton, McKenzie and an internet idea…money was flowing. And so I grew that company into like 5 countries, a 150 employees, like $10 billion in monthly sales and a buy-out offer. We were valued at insane prices.</p> <p>Ultimately, the bubble burst and it didn’t monetize for a variety of reasons I won’t bore you with. Neither did the Latin American one or the European one. I built a company in Latin America called [inaudible 00:07:28] or helped build it which then became like [inaudible 00:07:30] many years later. It’s not publically traded NASDAQ. Sure, I [inaudible 00:07:35] that thought long and hard. Okay. What do I do next? Do I go back to business school? Do I go to business school? Do I go back to McKenzie, try to join a venture firm?”</p> <p>And I’m like, “You know, I didn’t really become an entrepreneur because I wanna make money. I became an entrepreneur because I like building something out of nothing. And frankly I feel that I’m probably rather unemployable. I don’t like having a boss. I don’t like taking orders from people. I like to do what makes the most sense to me and maximize my utility to be an entrepreneur.” And so my main constraint and consideration then was, “Okay. I need to build…I wanna be an entrepreneur. Now we are in a world where capital is no longer available. I need an idea that can be profitable. And it doesn’t really matter to me what that idea is. It just needs to be capital-efficient and ideally profitable reasonably soon.”</p> <p>I thought long and hard and decided to bring ringtones and mobile games and wallpapers to the U.S. And that’s an idea that had already worked in Europe and in Asia. The U.S. was in the dark ages when it came to mobile. Now, of course, it was really hard because I went to all of the venture capitalists in 2001. And at the mere mention of B2C telecom [inaudible 00:08:36] every B2C company from E-tours to [inaudible 00:08:38] pets.com got under. All the telco companies got under. I don’t think I’d finish the sentence. And they hung up. I invested every last penny I had. I borrowed on my credit cards, lived in New York essentially on $2 a day for like two years, like, sleeping on the couch at the office, eating ramen noodles because I couldn’t even afford coffee or traditional food.</p> <p>But little by little, I managed to grab victory from the jaws of defeat. So I ended up signing all the major carriers, all the major labels, all the major publishers and the company grew. I mean, I missed, in the process payroll 27 times. At one point, we went from like 30 people to 7. I had to start coding again. I mean, it was rough. Revenues went from $1 million in ’02 to $5 million in ’03 to $50 million in ’04 to $200 million in ’05. I sold it to a publically-traded company in the same category for about $80 million June of 2004 and stayed on as CEO for 18 months and then went on to build the company I really wanted to build, which was basically…which has become since then the largest classified site in the world.</p> <p>So imagine what Craigslist should be. A mobile first, beautiful, spam free, murder free, prostitution free, personals free, version of a classified site that focuses on helping especially women who are the primary decision makers in all household decisions to buy and sell goods, to find…to hire a babysitter, to buy a car, to buy an apartment, etc. And so that company, OLX, I had launched with my business partner with whom I tried…I helped build [inaudible 00:10:05] of Latin America who is also a partner with [inaudible 00:10:06] today’s partner back in 2006. And we launched in 100 countries and 50 languages or so. And it really took off in 4 countries in Brazil, India, Portugal and Pakistan.</p> <p>So then we focused on these four countries, became really big and then started little by little expanding. And today, OLX has 350 million unique users a month, about 3,000 employees, very profitable in the countries which we dominate from Russia to Ukraine to Brazil to the UAE and also the leader in Pakistan, India, all of Africa, all of Lat Am and Southeast Asia. So very large company, which I sold in a rather complicated deal over a number of years to a publically-traded South African media company called [inaudible 00:10:51]. We did the first transaction with them at 2010 and stayed on as a CEO till I exited in 2013.</p> <p>What’s interesting is by virtue of being a consumer-facing internet CEO, other entrepreneurs would approach me and ask for money and advice. And after I started having money I started investing in startups. Now because I didn’t have time being a full time CEO as a day job, I’m like, you know, I need to only invest in things I understood. So I decided, “You know what? I’m only gonna invest in marketplaces. I’m going to create a set of thesis and a set of heuristics that allow me to make my investment decisions in one hour basically.” And so by 2013 with the other partner from the first company I started co-investing in a whole bunch of startups. So by 2013, I was already an investor in about a 100 startups. When I’m finished with OLX and I decided what to do next I’m like, “You know what? I’ve realized my partner and I both like building companies. And we both like investing in companies.” And so we created what ultimately became FJ Labs, which is this hybrid venture fund and startup studio that I’m currently running.</p> <p>Meb: The way that I came across you, Fabrice was that I started dabbling in private markets in about 2013, 2014 mainly as a way…my background was asa fundamental equity analyst, all quant now. This is kind of a hole in my skill set. And so I said I wanted to become educated about this world. And the only way, in my mind, to really do a lot is to put real money behind it. And so I started investing in a lot of private companies. And I kept seeing FJ Labs either as a current shareholder or participating in a round. And I said…oh, a funny thing that it stuck in my head is because I owned at the time kind of a vintage truck, which was a 1960’s Toyota Land Cruiser, which is FJ 40. And so it stuck in my head. I said, “What is this? Does this guy love old land cruisers? Where did he get the FJ?” And it turns out, of course, that’s I think you all’s initials. Is that right?</p> <p>Fabrice: Fabrice and my partner is Jose. So that’s FJ Labs.</p> <p>Meb: And so I kept seeing your name. And I said, “Okay. Who is this?” And then eventually I had read some more literature and kinda became more familiar with what you all do and said, “Let’s have them on the podcast and chat.” You have made this transition to being an investor. I think you briefly mentioned this. But you also continue to create companies internally, as well. Can you expand on that? You’re a purely passive investor. Tell us the general framework.</p> <p>Fabrice: By the standards of most investors, I’m probably a little bit crazy, if not probably a lot crazy. So every year I invest in about 75 new startups. We see every week about a 100 startups that come in through directly to us because we’re known as investors. A third are introduced to us by other VCs because they want our prospective in deals. And well, frankly, we don’t compete with VCs, right? Most VCs, they lead. They do due diligence, etc. We don’t lead. We don’t price. We don’t take board seats. We essentially do no due diligence. And I’ll talk about that shortly. Two one-hour meetings, so at most a week we decide whether we invest or not.</p> <p>And so because we’re writing small checks…you know, if you’re a lead VC in a series A and you’re writing a $6 or $7 million check, we’ll write 750K check. If you’re company who’s raising $20 million, maybe we’ll write a $1 or $2 million check. We’re the friendly value-added investor for the startups and for the VCs with really deep domain expertise in one business model, which is marketplaces and where we can really think through, you know, how do you build liquidity on the supply side, the demand side? What is the proper business model? Should you take a rate or a listening fee? Should you take another buyer or the seller? What is the scale of that rate? So because we have this deep domain expertise and that’s where we are specific, we’re actually reasonably generalists [inaudible 00:14:14].</p> <p>The other third of the companies we get every week mostly coming from the [inaudible 00:14:18]. So to date we’ve invested in 400 startups. So that’s about a 1,000 entrepreneurs. And they come back with the next company. They send us their friends. They send us their employees. You know, so basically the way it works, so every week we get about a 100 companies. We will talk to 40 because 60 are out of scope. They’re like, you know, whatever. They’re great. But they’re in, like, satellite tech or hardware or agricultural tech or biotech. So 40 we take a one-hour call. We have the standardized reporting on this call where we evaluate the company base.</p> <p>First of all, does it meet our underlying theses? And number two, does it meet our heuristics in terms of quality of the team, valuation and business? And our valuation of the business is nine business selection criteria, which includes total addressable market size, the business model. But one of the most important one of those for us is unit economics. And we really want that. And by the way, the company may not be live. So it might be theoretical unit economics. But we want the company to recoup their customer acquisition cost in a unit level within the first six months and maybe to get three X net contribution margin per transaction over the first 18 months, relative to their customer acquisition cost [inaudible 00:15:25] LTB to be as high as possible.</p> <p>And again, maybe the company’s not there. But they need to have a story to explain to us about how they’re going to get there. And in fact, our evaluation of how well they understand their economics is a key evaluation process for us of how well they understand their business. And so we drill fairly deeply on that in the one-hour basis. The team makes a recommendation. We have a weekly investment call every Tuesday from 10 to noon. We review the 40 companies. And then either we pass, we pass for now, or I take a call and frankly, we invest directly. And on average, we’ve been investing in 1.5 companies a week. To date, we’ve invested in 400 startups, seventy percent in the US, 20% in Western Europe and the Nordics, 10% in Brazil and India, 65% seed and pre-seed. So pretty early in their life, about 25% series A and series B and 10% in the later stages. Check sizes have been varying. But the average check size is about 500K.</p> <p>Understanding that pre-seed, which is basically an idea on a PowerPoint or maybe less sub-50K revenue per month, we’re investing 225K. Seed, we’re investing like 450K. A, we’re investing 750 to 1. And then afterwards we do 1 to 2 or 1 to 3. To date, we’ve deployed a $140 million, of which $90 million has been my partner and my capital. So it’s been mostly personal capital. So we’re very different again from that perspective. And most of the capital’s been personal. And we’ve done rather well. We’ve had a 150 exits, realized exits, on the 400 investments. And on these 150 exits we’ve had a realized IR of 70% realized. You know, most VCs talk to you about like, “Oh, the implied value of my portfolio based on the last round of valuation is blah, blah, blah.” But, you know, a lot of that is gonna go to zero. So I’m talking only on the stuff that we’ve actually realized cash on cash and with about an average six X multiple. So that’s one of the two lines of the businesses, the business we do every year.</p> <p>And then for fun every year we build one or two new startups de novo. My partner and I have realized we love building startups. We love helping build startups. So since 2013, we’ve built about 10. And the way it works is we go to five business schools first year. And we tell people we have this apprenticeship and future EIR program, if they wanna join. And every year on average, about 225 students have been applying from the first year of Harvard, MIT, Columbia, Warden, and Sanford. We hire three to four of those. They join us full-time during the summer, during which we make them work part-time in one of the early stage portfolio companies, part-time in venture. We teach them venture. During the second year of business school they become…they work 10, 20 hours a week for us as venture investors filtering in bad deal. And then when they graduate, the idea is that they become entrepreneurs or residents. And they start looking to…for ideas to build with us. And the business model there is a little bit different. We give them $750,000 in exchange for 35% of the company for us, 65% for them. But we join as active participants.</p> <p>My partner and I become executive chairmen. And we do whatever needs to be done, whether it’s helping raise money or recruiting or frankly, even sometimes playing an operating role. Sometimes I’m CEO. Sometimes I’m chairman. Sometimes I’m something else. So it kinda varies. We do that for a year until the company raises its series A. We do the next one the next year. And that we’ve done in a number of companies. We’ve built a company called Adore Me, which is a lingerie e-commerce company doing about a $100 million in revenues. We’ve built [inaudible 00:18:41] in Brazil, which is the OTA doing $600 million revenues and profitable. We built Rebag, which is a handbag marketplace doing, like, $30 million in revenues and doing rather well. We are building a blue collar job site in New York called Merlin. We’re building a big real estate marketplace in Canada called [inaudible 00:18:58] and frankly a number of others including a number of failures, including a number of actually rather public failures like BP.</p> <p>Meb: BP. Fabrice, this was…I used BP to sell a car a couple of years ago. This is one of the more surprising startups that I was like, “This was so pleasant and seamless. The entire car buying and selling experience is so miserable.” Probably find in Twitter timeline somewhere. I was like, “What a wonderful app and company.” I kinda saw that it didn’t work out or maybe they got acquired or something. But that was a surprise to me.</p> <p>Fabrice: One of our theses is reinventing marketplaces where buyer and seller need to do a lot of work with a much more delightful user experience. And so creating these managed marketplaces where the buyer or the seller doesn’t need to talk to each other and the marketplace actually does a lot of the work and BP fell straight into that type of thesis. We had done really well in the first three cities. And it was a rather competitive industry with [inaudible 00:19:53]. I guess the founders felt that it was a land grab and we had to spend and expand as fast as possible. And basically, the company probably spent too much money and expanded too fast to too many geographies.</p> <p>One of the approaches I really recommend to all the entrepreneurs is really nail it before you scale it. Like, get your unit of economics right, prove underlying unit profitability in the core geography before you expand to other geographies and especially if you’re in a hyper local marketplace where liquidity and critical mass buyers and sellers matter because otherwise, the only thing you’re doing is expanding your losses and your burn. I think that’s a lesson that we didn’t take to heart in that startup. And we expanded too fast, burnt too much capital. And so it was rather difficult ultimately in a rather competitive environment to continue raising. That sadly was right off. But I actually loved the company. I loved the approach. I think we were, like, essentially a 100% five star reviews on Yelp. The NPS was really high. And we’d actually really fixed a broken user experience. But I couldn’t make it work from…more from a financial perspective and made a number of mistakes along the way.</p> <p>Meb: Even some of the ones that you love don’t work out. So I’ve heard you talk, and you’ve interlaced it throughout this thread a bit, about expanding and geography. And you were just talking about BP. And I’ve heard you mention, I mean, a number of these companies already pretty global. Talk to me a little bit about your interest in investing the majority in the U.S. because I know at one time, you guys were pretty heavy in some developing countries like Brazil, Russia and Turkey. And on the flip side, we had Jason Calcanis on the podcast. And he said, “No, no, no. You’ve gotta be located in Silicon Valley.” Tell me a little bit about the way you think about geography as kind of a nomad Edison of the world.</p> <p>Fabrice: If you have a choice, I think build a U.S. company. Cater your US customers. Don’t go global. It’s not worth it, right? Like the U.S. has 340 million rich consumers who are early adopters and it’s an amazing market. And if you’re at a $100 million in the U.S. in revenues it’s easier to go from a $100 million to $200 million in the U.S. than it is to go from zero to $100 million anywhere else. If you’re at $1 billion, it’s still true. Most likely, if you’re at $10 billion, it’s still true. So my core recommendation for most companies is do not go global. So if you would in the U.S. you’re gonna be worth so much more just from a valuation perspective. You can actually buy the foreign companies. And by the way, it’s exhausting to be international. It’s exhausting to be traveling. And it’ll decrease your probability of winning in the U.S., right? If Uber could take a step back and not have actually gotten into all these markets and just made sure they won a 100% of the U.S., I think they would take that trade-off actually almost every day of the week.</p> <p>Now that said, there are few exceptions to the rule. My comment really applies if you…your business requires like payments, inventory, supply chain management, etc. If you’re in a user-generated content business, you’re Wikipedia or your Facebook then by all means go global, right? Like, you don’t actually need local operators or local offices. It’s really easy. There may be a winner-take-all-business in that category. But for most other businesses, my recommendation is just do the U.S. Now that said, there have been opportunities for arbitrage where other countries were doing rather well.</p> <p>And you can invest in great companies there. And often it’s less competitive, valuations are low and you can have exits. Now the issue with these markets is you face market risk. Often when I’ve been investing internationally…frankly I’ve been investing in ideas that were reasonably proven because they had been done elsewhere and then invested there. But that’s not the core of what I do. The core of what I do is like business model reinvention and innovation in the U.S. and reinventing U.S. business models. So that’s the most interesting part.</p> <p>That said, I take into consideration…I’m an economist at heart so I look at the global macro environment. And so in 2010 Brazil was doing well. Russia was doing well. Turkey was doing well. So I was long [inaudible 00:23:35] these countries. And you may remember there’s a cover of The Economist with like Brazil is taking off. And you had like the Rio de Janeiro statue like as rocket ship going up. At that point, about 50% of our investments were in these three countries. All three of these countries made political choices. And so they were political choices originally that I felt were going to have negative macro consequences. I mean, it is somewhat different in each country. Like they elected Erdogan as president in Turkey. Vladimir Putin decided to I guess first invade Georgia, then invade Crimea and then create troubles in Ukraine. They elected Dilma Rousseff in Brazil who started passing non-business friendly laws and increasing the cost of operating there and capital controls, etc.</p> <p>And so I felt that these decisions were going to have negative macro consequences, which were ultimately going to have negative micro consequences in our world. So I basically shut down all of our investments in all three countries. And we went from 50% of the new investments there to zero which proved out to be a [inaudible 00:24:33] call. Especially the timing between investment and exit is about five years. So you wanna be somewhat of a contrarian. But you don’t wanna be investing near the peak. And I felt that we were…things looked too good relative to the direction that it was heading. I was able to sell off and avoid most of the disasters that happened in all these countries. And frankly, as I said, I’d be happy to just invest in the U.S. It’s still the place with the most interesting innovation, company skill, the fastest. I mean, China is probably the other ecosystem that’s just as robust. But it’s not a level playing field. Now obviously I prefer to be in a place where it is a level playing field. And it’s really the people that are the hardest working and the luckiest and the best to win, and not the people that are the most best connected.</p> <p>Meb: You mentioned your preference for marketplaces. And is that something that’s majority driven by just your skill set or is it actually a macro opportunity that you think is under-served or is right for more business models? Why in particular do you guys focus in that world?</p> <p>Fabrice: I came to a lot of marketplaces because as an economist, as I said, I like bringing liquidity and transparency to opaque and fragmented markets, of which there are many. A few years ago there was this famous slide that came out of all the sites that were attacking Craigslist category by category. Many people who were investing in that and many VCs it’s just, “Oh, this is done. You know, like marketplaces are done.” The reality is much of the world has not been digitalized yet. And the tech revolution has really not reached most of the business sectors or industries. It hasn’t reached the public sector. And I find that marketplaces are the most scalable and interesting way to actually build businesses with…in a capital efficient way in every single category.</p> <p>And so right now when we look at the B2B world where many of the transactions are done the old-fashioned way through Rolodex and connections and Excel or email, they’re just not efficient. And so all of the efficiency that has happened in the consumer-facing world has not yet happened in the B2B world. So we’ve been investing a lot in B2B marketplaces where no day…like petrol chemicals marketplace where RigUp, which is an oil services contractor marketplace, where if you’re an oil services firm and you wanna employ a welder, they’re a marketplace where you can find that and that person for a few weeks. And they’re doing hundreds of millions of sales and categories or industries. We’re in a dump truck marketplace called Tread that in the dump truck market people don’t realize it’s $37 billion a year market.</p> <p>And things have been rather inefficiently. All these categories which are much larger than people suspect are ripe for innovation. And I find that marketplaces are actually by far the most efficient way to go after them. And so yeah, that we’re…many people think we’re both at the…you know, that everything that needs to be done has been done or invented and that marketplaces are done. And I actually think that’s far from true. And like, I think we’re still at the very beginning of the tech revolution. As Jeff Bezos wrote in his first letter to shareholder and as he keeps republishing and rewriting every year back from 1997. We are day one. I mean, we’re maybe at the bottom of the first inning. We’re at the very, very beginning of the tech revolution.</p> <p>Meb: One of the unique properties of what you do, Fabrice, is…and when people probably heard the intro and they heard you say, “We invest in 400 companies,” they probably dropped their jaw and say…someone who wanted to disparaging or derogatory would say, “You know, that’s the spray and pray method. You’re just investing as many things as possible.” But maybe talk a little bit about how that could actually be a compliment with some of the properties of investing in companies and why your approach is to invest in so many companies versus concentrating in just a handful.</p> <p>Fabrice: I would argue we don’t do spry and pay, given that every week we get a 100 companies. We’re investing in 1.5, right? So every year we’re seeing 5,000 plus companies. And we’re making 75 investments. It actually is a pretty strong filter, especially since it’s in a given vertical. I actually don’t have a portfolio construction theory where I’m trying to like create the ideal portfolio with a set number of companies I wanna invest in or a set number of capital that I wanna deploy. Now, in light of the strategy that I’ve defined, which is I wanna mostly do seed and pre-seed. I don’t wanna lead. I don’t wanna price. I don’t wanna take board seats. There is a maximum amount of capital I can deploy before which I would probably start competing with VC, which is the last thing I wanna do because I wanna be their partner. I wanna bring them deals, etc.</p> <p>So I would argue we’re not spraying and praying because we’re actually rather specific or rather selective in the deals that we do especially, you know, it’s under one business model. But that’s it. There is a lot of value and diversification. If you think of traditional public market returns, they follow a normal Gaussian distribution curve and everything falls within whatever, one standard deviation of the [inaudible 00:29:12] basically. In private markets, especially the venture markets, actually things have a tendency to follow power law. So the top few deals actually account for most of that return. So if you look at the U.S. in the last two decades, you’ve had four super unicorns, companies with over a $100 billion, right. You have Facebook, probably Airbnb, and Uber in this decade. The decade before, you had like Facebook and Google. The decade before, you had like maybe Cisco, Oracle and Microsoft, you know, and Intel. So it’s like two a decade basically. Maybe three a decade. And [inaudible 00:29:43] in China by the way in the last two decades.</p> <p>Then you have maybe 20 companies that are worth like $10 billion, $100 billion. And then there are like a 100 companies that end up being worth over a $100 billion or over $1 billion. And when you look at all of the venture deals, right, every year there’s about 5,000 seed-funded startups with 500K or more. When you look at the outcomes really over the course of a decade, 50,000 seed-funded startups, it’s actually the top 100 per decade or a 120 per decade that account for 99% of the returns. The top two account for 40% of the returns. The top 22 account for 80% of the returns. You really wanna be in those companies and there is a real value in diversification to guarantee the probability of being in those. So Kaufman did a study of how many…what’s the ideal portfolio size for an angel investor? And the funny thing is the more companies you were an investor in. the higher your IR, unless you got really lucky.</p> <p>And so for most people, there is actually really, real, real value in diversification. All that said, we’re probably rather different than most…what I just described kinda suggests you want to try and play Powerball. You’re trying to be in that 1,000 [inaudible 00:30:47] or you’re trying to be in the next Facebook or Uber. I actually am…I’m investing with a belief that I’m not going to be in that because I chose to be in New York that we can talk about in a few seconds, that I’m not gonna see these deals. By virtue of investing in these companies that have valid business models, that have great unit economics I had…also by not being in the board, by not leading, I actually get a lot of exits, right? It’s very rare an angel investor VC has a 150 exits that are realized. And the reason is we’re probably doing the anti-VC strategy. Most VCs, if you talk to them, they’ll tell you, “Concentrate your bets. And find the winners. And then double down on the winners.” We’ve actually been selling our winners.</p> <p>So our traditional path of ownership is we invest in the seed and we’ll sell it maybe in the C route. There’s no negative signal on selling because we own like less than 5% of the companies. And often we do it as a favor. Like the company becomes really, really hot and like whatever. Gridlock, Sequoia, and Andreessen all wanna invest. They all have 50 minimum ownership requirements, so that’s 45% dilution. The [inaudible 00:31:47] is like, “Look. I love all you guys. I want you guys and I definitely don’t want you to fund anywhere else. I don’t want that much dilution. Go buy some early investors.” If we find that the valuation is richer than we think the business dictates, we will sell 50 to 75% of our stake in the upper end. And that has allowed us to put out great returns and get reasonably early liquidity and much earlier than traditional VCs. And so it makes sense in our case to have this reasonably diverse portfolio with [inaudible 00:32:13] economics where we’re selling the upside. And I would argue that we are not at all spraying and praying.</p> <p>Meb: Traditionally selling to venture capitalists who are then buying the stake in the C round or are you using companies like EquityZen? What’s the route to liquidity?</p> <p>Fabrice: Now we’re mostly selling to the VCs when there’s [inaudible 00:32:30]. So in the private markets, companies are not sold. They’re bought. Either an acquirer comes in and wants to buy the company or we go public. There is a…a new [inaudible 00:32:38] happens. And as I said, it’s typically around the series C that things become hot because right now, all the VCs that used to be at the series A and B have raised funds that are so large, like, they’re multi-billion dollar funds, they wanna write bigger checks. And there are not that many companies that get to a point where they can accept $50 million [inaudible 00:32:54] where there’s so many people trying to write $50 million checks. [inaudible 00:32:57] have gone reasonably high. And vision funds, of course, is creating inflation in the later stages.</p> <p>And so in fact, because everyone else is going late stage, I’m going earlier stage. So I’m…I’ve actually moved from seed to now encompass pre-seed, which is not something we did in the past. The main way we sell is to other VCs and when a round is structured. So it’ll be a round and the primary price will be whatever, a $100 million. And they’ll buy secondary at a 10% or 20% discount. Occasionally, we’ve transacted on [inaudible 00:33:29]. And I think we’ve also used EquityZen and [inaudible 00:33:32]. But there, we’ve been more buyer than a seller. We haven’t sold much stuff there. We mostly bought shares in companies that we were interested in that we didn’t have exposure to.</p> <p>That said, the main reason for that by the way is a lot of the companies that we’re selling, they’re not big enough that they would be on an Equidate or [inaudible 00:33:48] or an EquityZen. I mean, the things that trade there are really quasi-public companies. It’s like Airbnb and Uber, companies that are really big, that are really reasonably well-known, that have high market caps. Companies we would be typically selling, they’re at like $80 million valuation or a $100 million valuation, $200 million valuation. They are not on these platforms. And we can only sell them to informed buyers who actually have done a lot of due diligence, decided they want more exposure or they want exposure in the category. And again, we don’t typically sell a 100%. We sell like 50% or 70%.</p> <p>Meb: Dog, talk to me a little bit about…and by the way, we just had the founder of EquityZen on a prior podcast. And we had to bleep out like half of the episode because I was naming all these companies. And he’s like, “Meb, you can’t be naming these because these are active offerings. We’re gonna have to bleep out all the names.” Tell me a little bit about lessons learned. So you’ve been doing this actively as an angel style investor. Four hundred companies. You probably have a lot of successes, but also a lot of scars or disappointments or takeaways. As you look back over the past five, six years, what are some of the things that you’ve incorporated into your methodology as the years go on where you say, “You know, look. This is process we implemented because of XYZ,” or, “Hey, we’ve decided that we prefer founders over ideas or vice versa?”</p> <p>Fabrice: Number one, if you’re gonna be investing in this asset class, be diversified. I mean, a few years ago I created this angel list co-investment vehicle, which we would do on a deal-by-deal basis. And we’re like, you know, up to, whatever, 75 deals we do a year. There was some where we have enough availability for friends and family to invest with us. The thing is, you know, people like my dad don’t turn around very quickly. And so at the end of the year…so they miss most of the opportunities. And at the end of the year, they had about two investments. So, you know, three years later, they had five.</p> <p>And we would be at like 225. And then you would lose money on every single deal and tell me, “Fabrice, you suck. You don’t know what you’re doing.” And I’m like, “Okay. This doesn’t work. You should not…you, as a private investor without actually the ability to make…to evaluate these deals, should not be investing frankly in the asset class in a deal-by-deal basis. You should be investing in the fund. And you should get exposure in the entire portfolio because you need diversification. If you have less than 20 or 30 or 40 investments, you’re probably going to lose money as an investor.”</p> <p>So we ended up not doing for the most part deal-by-deal angel syndicates. Instead, we created like a co-investment vehicle where people can invest with us. It’s kinda [inaudible 00:36:18] what we invest 100K and the fund puts a 100k but it’s not really a…it’s not a fund. There’s really capital put upfront and there’s whatever [inaudible 00:36:24] and I can sell.</p> <p>Meb: Where is that located? Is that on a platform? Do you guys do it on your own?</p> <p>Fabrice: It’s on angel lists.</p> <p>Meb: Okay.</p> <p>Fabrice: And we do one of these. You need to be an accredited investor. There’s a 99 investor limit so whenever we invite 99 investors, we stop it. And whenever we run out of money we do the next fund. So there’s no real…I mean, we have a traditional venture fund, which is the equivalent of a $200 million fund, which would be your second and traditional fund. But there our minimal investments are like $5 million. That’s different. We’re rather different I guess from most investors you see because a big chunk of the capital is our own capital rather than third party institutional funding. In fact, we have no institutions. We only have family offices and strategics investing with us.</p> <p>The second big learning, I’ve learned to stick to my guns. So like I want the team, the business, and the valuation to all be within our expectations for us to invest. So I used to have these [inaudible 00:37:11] where I would fall in love with an entrepreneur and it’s like, “You know what? The entrepreneur trumps all my concerns of the business where valuation are irrelevant. They’re so amazing. They’re gonna figure it out.” More often than not, I ended up losing money when I did that. And I’ve realized I want all three. In fact, I want all four things to be true. I want the idea to meet my thesis, which is my perspective on the direction the world is heading in to invest along…to create that world of tomorrow and that better world of tomorrow. Two, I want to love the entrepreneur. Three, I wanna love the business. And four, I think the deal terms need to be reasonable. And all four of these things need to be true. And if they’re not true, we should not invest.</p> <p>And we should tell them we’re not investing, which I guess leads me to point or lesson number three is we’re always honest and radically honest and transparent. One of the things I hated as an entrepreneur is I would meet a VC, I would feel the meeting went well, and then I’d never hear from them again. I never knew where I stood. I never knew if they were interested or not, if I was ever gonna get a term sheet. We tell people where they sit and we turn around quickly. And I’ve realized that builds a lot of credibility. And I guess the next thing I’ve learned is you don’t necessarily need… You know, early on in this podcast you said, “Hey, you know, you’re just on the one side. Maybe you’re just a passive investor.” And you would think we’re a passive investor because we’re in so many companies and we’re not on the board. But I would argue we’re probably some of the most value-added investors, entrepreneurs, especially marketplace entrepreneurs have, because we actually help them raise money.</p> <p>Our core value-add for the entrepreneurs is…and we’ve realized like there are big venture funds out there like Andreessen and they have so many resources and headhunters and venture partners that can help you with all these things. We obviously don’t have the time, the resources, to do that. But we’ve realized what an entrepreneur is doing is always raising money. Entrepreneurs are raising on a continuous basis and we for the most part…not even for the most part. We are not going to be raising or leading the next round. We have no [inaudible 00:39:03]. We don’t have an [inaudible 00:39:05] of like wanting a low valuation. We want them to do well. And so because we’ve built these relationships with all these VCs, we will introduce them for their next round to all the top VCs.</p> <p>And it’s win-win-win. The VCs love it because they see differentiated deal flow and companies they can invest in. The entrepreneurs love it because it’s easy for them to raise money and easier than it would be otherwise and they get the meeting. We made the intro to [inaudible 00:39:28] and they get the meeting. And we love it because the companies we invested in get funded. And I think we’ve come to realize what we’re good at and what to focus on and not try to boil the ocean from that perspective.</p> <p>Meb: And as you look around the landscape today, I think you see a lot of macro commentary about there being a lot of money sloshing around. So as there’s been a number of developments in the past cycle, namely valuations creeping up, the existence now of money, a lot more money kinda looking at the early stage rounds, you have the platforms like an angel list or FundersClub or Wefunder, all these others and also this new legislation, which is still getting finalized on opportunity zones. There’s a lot going on. Tell me a little bit about just kinda how you see the landscape. Are you worried about all the money chasing the deals? Are you never seen so many awesome deals in your life and it’s not a concern? What’s the lay of the land look like to you?</p> <p>Fabrice: I’m seeing more opportunities than ever before, especially in the early stages. So our returns are pretty exceptional, right. Like 70% of realized IR over like 19 years. And so like I don’t know if it’s probably top .1% VC of all time. While I think we generate alpha, I think the beta and the sector we’re at is really good because the fund economics are such that if you’re a fund manager and you’re good, your economic incentive is to go and raise a bigger fund, right? So all of these people from Excel to Sequoia to whatever have gone from like $400 million in our funds to like $2 billion in funds, 5 billion in funds, etc. And so they need…because of course 2% of management fee at $5 billion is $100 million. Just a lot more than 2% management fee on $400 million, which is $8 million. So the economics have incentivized managers to raise bigger and bigger funds.</p> <p>And in the later stage, especially because of the introduction of the vision fund, but also frankly just because everyone has raised bigger funds, there’s a lot of value…a lot of competition and it is very, very [inaudible 00:41:21]. It has actually pushed me to the other direction. As I said, we used to do seed. Now we’re doing pre-seed because I feel that at the seed and pre-seed stage, there are few funds and there are few great funds. I mean, Floodgate or Uncorked or Slow or [inaudible 00:41:36] at the pre-seed stage that they’re F4. You know, there are a few amazing people. But for the most part, we’re competing with angel investors who don’t have VCs, who don’t have heuristics, don’t have deal flow, and don’t necessarily know what they’re doing. And the [inaudible 00:41:50] are pretty ripe. And if anything, it’s less competitive than it was a while back. There are few years ago where out of YC, it was completely crazy.</p> <p>So YCombinator, every single deal was like an on cap node and at crazy valuations ultimately from a conversion perspective. And that was, like, 2011 and 2012. It has become way less crazy. Valuations, you know, are high, but not completely unreasonable. So in the early stages, not that crazy. The YC remains very frothy. But our strategy there is just to wait until the next round or do a seed extension. So we’re more creative in where we play and where the rounds are played. And by the way, by virtue of being nimble…you know, we’re a quasi-family office masquerading as venture fronts where we can change stage. We can change geography. We can change theses all the time. We’ve been able to navigate the changing landscape. And so far, you know, I don’t have a set number of companies want to invest in every year. If I meet great entrepreneurs and great deals and great companies, I invest. And if not, I don’t. I have no obligation to go in one direction or in the other. And I am reasonably confident that the companies we’re investing are amazing. The evaluations are good.</p> <p>Now at a macro level, yes. Our interest rates are still reasonably low. Is there a lot of capital? Absolutely. The good news is in my category, it seems to be chasing the later stage deals that seem to be very expensive, which is creating a lot of exit opportunities. Now continuing on the macro level we’re in the eighth year of a non-interrupted economic expansion, which is longer…one of the longest expansions ever in history. There are a number of signs. You know, the yield curve is flattening and maybe inverting in the not too distant futures. There’s…at the same time it actually doesn’t like look…it doesn’t feel like we’re at a cycle, right? We’re like 3.90% unemployment and inflation remains reasonably tame. For the first time in 10 years, we have aligned growth in every one of the major economies from China to Western Europe to the U.S.</p> <p>On a pure cyclical basis, you don’t actually see fundamental recession risk in the next 12 months or 24 months. That said, there is a black swan risk, which is probably more geopolitical because we have more of these uncertain political actors who could make geopolitical decisions that could lead us to recession and/or are doing weird things like trade wars that should not exist. There is clear geopolitical risk or greater than before. So the risk of a downturn is greater than has been. But barring these types of black swans, I actually remain pretty optimistic. And in our case, I mean, right now it’s a great time to actually have exits. I mean, this year we already had one IPO I think over 10 successful exits. We have another company that filed to go public not that long ago. So things are looking really good. I mean, we’re having one of our best years ever, if not maybe the best year ever.</p> <p>Meb: Funny. I laugh. There’s a quote one of my buddies have that he says, “You know, so many people on the public markets love saying this is the ninth inning.” And he says, “Have you ever been to a baseball game? You know how long the ninth inning lasts? This could be years.” So that…</p> <p>Fabrice: Exactly.</p> <p>Meb: I love that analogy. We gotta come up with a phrase for the…what comes before pre-seed coming years. Everyone keeps moving downstream. It’s maybe just your Labs is inventing a new concept and launching it. I’m gonna ask you a few more quick questions. I’d love to keep you around today. This has actually been a lot of fun. Put on your economics hat and I don’t know how familiar you are with this new legislation on opportunity zones. If you’re not, we can skip it. But if you are, do you think something as a startup founder in the U.S. that this is a simulative type of initiative where they’re giving tax breaks for these companies and investments in downtrodden communities or is this just gonna be abused as a tax shield? Any thoughts on that in general?</p> <p>Fabrice: Don’t know the legislation well enough. My intuition is that it won’t do anything great for these regions but that said, that the macro direction or trend is for people…is for more and more places to have great and robust technical systems, right? In the late 1990’s if you wanted to hire like developers, you really needed to be in Silicon Valley. Like there is no talent elsewhere. And by the way, my first company, I had to spend millions of dollars building servers and building data centers and having Oracle and Microsoft licenses. Now you just use AWS. So the cost of entry has decreased dramatically. The barrier to entry has decreased dramatically. The ability to code has become…it’s way easier to code than it’s ever been. You can…I can basically build almost anything for like 50K. And frankly, if you can get sweat equity for people basically for free, you can build almost anything.</p> <p>And that is creating ecosystems that are emerging and very robust in many, many cities. And we’re now investors and startups in like North Carolina and Chicago. And, I mean, Chicago maybe is already urban and developed, but like in many non-traditional centers. Miami and, of course, New York, Boston. Now like Los Angeles with Silicon Beach has really, really emerged. But even in Chicago after Groupon…has great companies. And we’re investors in a company in Chicago called Reverb. They’re a music instrument marketplace. They’re doing like over half a billion in sales in used music instruments. I mean, you’re seeing these wonderful businesses emerging everywhere.</p> <p>I don’t think it’s actually driven by legislation. It’s really driven by the cost of starting startups has declined dramatically. It’s easier to start startups than ever before. And so you have more places where people are emerging and capital is becoming more available though, especially in the series A and B, and remains concentrated in the major cities. But that’s okay. Maybe your headquarter’s there. And if you really succeed, people will find you. And I don’t actually suspect that it’s driven by legislation at all.</p> <p>It’s also driven by San Francisco deciding to shoot itself in the foot. I mean, they are passing anti-business legislation. They’re creating…they’re blaming tech on their housing problem where frankly, it’s purely a supply problem or it’s mostly a supply problem. If they removed air rights and you could build up, they wouldn’t have this overpricing issue. Between the negative…the anti-business legislations, the idiotic housing legislation, they’re increasing cost to the point where there’s an exodus, both of people in the tech world and not tech world. So the combination of those two things I think will be a more prevalent driver of the growth of other ecosystems than underlying tax or business legislation.</p> <p>Meb: A couple more quick ones and we’ll let you know. We didn’t talk about this. We actually don’t talk about it much on this podcast surprisingly. What’s been your involvement and do you see any interesting startups or do you participate at all in the crypto world or is that totally scarred by getting your wallet hacked years ago?</p> <p>Fabrice: It didn’t get hacked years ago. I got hacked last November. So the thing is we didn’t talk about what we do as hobbies or whatever. But like I’ve been a gamer my entire life. I’ve always had these powerful GPUs so I started mining for fun in 2011. But I started doing it for, you know, intellectual masturbation or for fun and to use my GPU in its down cycle. And as a result, lived through all the bubbles that happened to the space and lived through [inaudible 00:48:40] where I lost everything. So multiple times and I [inaudible 00:48:44], etc. Oh, now between like two-factor identification and a number of their security measures, I was safe. And of course lo and behold I wasn’t and I got hacked and people literally got access into everything I had. The thing is by sheer luck…and I will easily admit that it was luck. I had decided that validations were too frothy and I’d sold everything the week before.</p> <p>So literally, you know, millions of crypto that could’ve been sold, they were not sold. I think at the end of the day they sold .01 BTC out of all the crypto I’ve ever had. So I think that was great. So involvement in crypto, I decided to stop direct involvement in crypto once things became complicated enough. I mean, we’re still years away frankly from real contute mass market consumer-facing applications. We’re still investing in the underlying tools. So FJ has invested in maybe 10 startups in the crypto space. But almost all of them were like infrastructure and groundwork breaking.</p> <p>We decided to not…to stop drooling over direct investments. And instead, we’ve helped build a hedge fund called Lydian [SP], which one of our EIRs is leading. We basically invested in that instead. So we’ve actually allocated our own capital to the hedge fund that we helped build, rather than continuing to direct investments because we felt that the expertise both in the trading side and frankly on the startup side was different enough that it…from a [inaudible 00:50:05] focus on marketplaces that I…that it deserved a dedicated fund.</p> <p>Meb: We haven’t much participated in that world, except we reserve the Hodel Ticker for a public fund humorously watching from afar a lot of these ETF issuers try to do these crypto funds. The SEC was saying, “No dice for a long time.” We’ve been sideline cheerleaders, but don’t have any dog in that fight. One of the questions we always ask our guests near the end is what has been your most memorable investment? And so this can be good. It can be bad. But really it’s meant to be the first thing that pops into your head.</p> <p>Fabrice: It’s necessarily not an investment because we’re experienced as a startup entrepreneur. When I was running Zingy I…you know, and I missed payroll like so many times. We become cash flow positive and April 1 of 2003 but the [inaudible 00:50:52] carriers were paying us quarterly plus 45. So I actually didn’t even know and we gnawed on this and said we had a good database. Get database extracts to their databases to like get paid. So we didn’t even know what we were doing. That’s the period during which we had signed all the carriers. We had gone from 27 people to 7 people.</p> <p>I was like working day and night as everything, project manager, programmer, CEO, and essentially janitor. When you stop paying people, you know, they kinda stop showing up for work. So things were like really bad. And finally on August 16 or August 15 of 2003 the check from Sprint arrives for like half a million dollars. I think it was like $457,000. And that’s when I got it. We were saved. Like we were cash flow positive.</p> <p>And that was like such a relief that we had made it. Like we had covered the chasm. And once you’re profitable, you’re a master of your own destiny. And until then, like, the three years or the two and a half years before then had been such a struggle, especially in the post [inaudible 00:51:45] days. And I remember that day much more than, like, the day I sold my company and made $40 million, you know, the first…the second big company I built or the next company I sold for hundreds of millions or of all the ups and downs or frankly even like…I was investor in Baba right? Like I invested in Ali Baba. I had $4 a share when it was private. And I’ve been riding it all the way since. But none of these has, you know, gut-wrenching or frankly meaningful as the day I like, turned it around. I was like, “Oh, my God. We’re getting paid by $100,000 in credit cards. I can pay the rent and the employees. And we’re gonna be around.” Like, that, was probably the most memorable day for me.</p> <p>Meb: That’s funny. You know, you talk to so many entrepreneurs. And this is obviously a little bit survivor bias because the ones that don’t make it don’t have these stories. But even the ones that do make it, how many times right on the ledge…I mean, we definitely had a couple of years in the sunken place where tough times and you…the story with Elon Musk and Tesla being days away from bankruptcy and all sorts of things.</p> <p>Fabrice: This summer…I mean, we had an exit in our Turkish company where I probably would be now [inaudible 00:52:47] are gonna end up making a 110 or 120 X my investment. The company was a day away from closing shop, a mobile gaming company where we’re…they’re doing it like a Clash of Clans type game for the emerging markets on Android and every game…not one of the games they ever made ever worked in that strategy. Like, they all failed. They did okay, but nothing great. We were literally closing the company. And the team for fun had built a simple casual game called 1010, kind of like 2048 or…and they put it in and like instant, instant mega hit. The company becomes profitable overnight. [inaudible 00:53:20] was okay. Well, maybe instead of trying to make these complex games, let’s focus on these casual games. And we seem to be pretty good at making them and it turned all right.</p> <p>We went from being a day away from closing shop, releasing a game we’ve built in one day, one day. Like it was nothing…it had nothing to do with anything we ever did. And then the company I think last year did, like, $30 million [inaudible 00:53:39]. That has been success to success to success and then Zynga bought it for like $250 million cash upfront like…and early this summer, like three months ago, four months ago. And just that was like a 75 or 80 X for us. And so you have these stories where things can get really, really close to the edge or the precipice. But of course, many times you get to the precipice and you fall off the cliff. I mean, you don’t actually make it. We’ve been lucky both in our professional lives as entrepreneurs and as investors to make it. But 50% of the time actually in our investments. So we’ve made money in about 50% of the deals.</p> <p>Meb: We laugh here all the time where we talk about how we spend so many hours on building these very serious and well-researched funds. And we’re gonna launch some stupid thematic cannabis ETF that will probably raise hundreds of billions of dollars and end up being something totally different. But so far, we’re trying to stay away from it. What’s been the biggest whiff where you passed on something that’s gone on to become…I was laughing earlier when you said a $100 billion companies because that’s almost passé now. We have two $1 trillion companies. We’re now into the Ts. Memorable whiffs?</p> <p>Fabrice: I was an early investor in Tencent and I sold like just after the IPO. Tencent is today worth, I don’t know, about $500 billion. I don’t even pay attention anymore. It’s too depressing. And yeah, I made 50 X on my money. But at that time, they were just a messenger. And I never imagined they could become a Facebook plus Zynga plus WhatsApp plus everything else, right, like, and much more and a payment system and a conference platform and so that…they were just [inaudible 00:55:08] which was at that time…really ICQ was pre…it was free but it really became WeChat. And it’s one of the lessons that led me to, “Okay, instead of selling a 100%, maybe I sell 50% or 70% because sometimes trees do grow to the moon even though it’s really, really rare.” I had an opportunity to invest in Zynga very early, which I passed on because I don’t usually do gaming.</p> <p>I’m a marketplace guy and I thought that I didn’t like gaming economics. We’re more of a studio business. I felt acquisition cost would increase. I’m sure it and would increase and development goals would go up and so I didn’t like the business and…but of course that was all true. But in the meantime, you could’ve built a $10 billion business. I passed on the $2 billion round at Uber and I passed it. I wrote in my debrief, “I’m gonna regret this the rest of my life because I love the product and I love the company and I love everything.” But, you know, I made the mistake of looking at their numbers and I have a hard time justifying $2 billion.</p> <p>You know, when we’ve been in the business as long as I have, like, you have a lot of near wins and near misses and companies you could have invested in or the companies that you could’ve made money and didn’t sell, etc. but…and it happens, right. Like my first company that I was running, we had a $300 million cash offer from eBay and 40% of the company and wanted to sell. I would’ve made a $120 million. But my majority shareholder [inaudible 00:56:18] voted me down and I didn’t. I was 24. I didn’t really know anything. And I did have a drag. I didn’t even know what a drag was. There’s been a lot of near misses. Hopefully, the next few times we don’t do near miss, but we actually convert and hit the home run.</p> <p>Meb: What is on Fabrice’s skiing bucket list for somewhere you haven’t skied yet, but love to?</p> <p>Fabrice: Did recently Greenland and Iceland. Right now on my skiing bucket list, Antarctica and there’s a new heli operator that skis Antarctica. I haven’t done the Himalayas. I haven’t done [inaudible 00:56:48]. I have not done [inaudible 00:56:50]. So all of these are on the to do. I was actually recently invited to go and…so OLX is massive in Pakistan. And I’m a pretty big celebrity there. So I was actually invited to go heli ski in Pakistan. So all those are on the skiing bucket list for the next decade.</p> <p>Meb: Three I think. I still have never been to Silverton outside of Telluride. It’s not a crazy mountain. But I’ve always wanted to go to Taos. It’s not necessarily the best snow but seems like a pretty cool location and I’d love to get down to Portillo or any of those places in Chile.</p> <p>Fabrice: That’s also on it. I’ve not been to neither the Argentinian or Chilean ranges, heli ranges and they’re both on the to do list.</p> <p>Meb: Good. Well, we’ll have a startup economic summit down there and then have a conference. The show was actually sponsored last year by Mountain Collective Ski Pass. And so that had 2 days at about 20 different locations. We’ll have to…we need to get them to re-up, Jeff. I…we gotta reach out to those guys. Fabrice, where are the best places for people to find you and all of my listeners that are going to send you all of their amazing pitch decks? Where do people follow you, if they wanna follow your writings, your ramblings, your investments and everything else?</p> <p>Fabrice: The easiest probably to go to my blog. It’s just my first name, last name .com. So fabricegrinda.com. I write once every other week or so but whatever crosses my mind. The entire portfolio of companies is there, our theses, whatever crosses our mind. And I’m also on Twitter and Facebook, Instagram, and LinkedIn and all the usual suspects.</p> <p>Meb: It’s been a pleasure. If you find yourself in Los Angeles, let us know. We’ll hop up to Mammoth or to Squaw or to any of those places. But Fabrice, thanks so much for joining us today.</p> <p>Fabrice: Thank you for having me.</p>

<p>I had the pleasure of chatting with Meb Faber, co-founder and the Chief Investment Officer of Cambria Investment &hellip; <a href="https://fabricegrinda.com/far-ranging-and-fun-podcast-with-meb-faber/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;Far ranging and fun podcast with Meb Faber&#8221;</span></a></p>

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Far ranging and fun podcast with Meb Faber. Categories - Entrepreneurship, Interviews &amp; Fireside Chats. Date-Posted - 2018-10-01T14:14:49 . I had the pleasure of chatting with Meb Faber, co-founder and the Chief Investment Officer of Cambria Investment Management. He normally covers public market investing which led to a fun conversation about the differences between the two. More details on Meb’s blog at: https://mebfaber.com/2018/09/26/episode-123-fabrice-grinda-were-still-at-the-very-beginning-of-the-tech-revolution-we-are-day-one/ Date Recorded: 9/14/18 Run-Time: 58:49 Summary: In Episode 123, we welcome entrepreneur and renowned angel investor, Fabrice Grinda. The guys begin by discussing their mutual love for skiing, talking about heli-skiing in Canada, powder skiing in Japan, and the steeps of Chamonix in France. Meb asks Fabrice to recap his background. What follows is a fascinating look at the professional path of a wildly-successful entrepreneur and angel investor. Fabrice’s history involves consulting with McKinsey, building the equivalent of eBay in Europe and South America, starting another company that brought ringtones, mobile games, and wallpaper to the US (and eventually did $200M in revenues), and then consulting for fellow CEOs. Ultimately, Fabrice and his partner launched FJ Investments, which is where he’s currently focused. Meb asks about Fabrice’s investment approach and the frameworks he uses. Fabrice tells us he invests in about 75 new startups each year, mostly seed and pre-seed. He writes smaller checks (about $500K), as compared to the bigger VC firms. He provides us insights into his selection criteria – one of the most important of which is unit economics. The degree to which a founder understands his/her economics is an indicator as to how well he/she understand the business. Fabrice has deployed about $140M to date, mostly personal money. He’s had 150 realized exits on 400 investments, with a realized IRR that’s pretty staggering. You’ll have to listen to get that detail. The guys hit on a handful of topics next: Fabrice’s experience with Beepi, which ends with Fabrice’s advice to “nail it before you scale it”…. Why investing in the U.S. is often a wiser choice than looking internationally… Fabrice’s preference for investing in marketplace-oriented businesses… And how “we’re still at the very beginning of the tech revolution… we are day one.” Next, the guys talk about the specifics of creating an angel portfolio, with Meb bringing up the phrase “spray and pray”. Fabrice tells us that’s not his methodology. He’s more selective. That said, in private markets, returns tend to follow power law, meaning the top few deals account for most of the returns so it’s important to have some of those deals in your portfolio. Given this, for most people, there’s real value in diversification. Meb asks what lessons Fabrice has learned throughout his experiences so far. Fabrice tells us that if you’re going to invest in this asset class, you need to be diversified. He mentions that if you have less than a certain amount of investments, you’re going to lose money. Another lesson is that investors needs to stick to their guns. For instance, Fabrice has found that his thesis, the company team, the business, and the valuation (deal terms) must all be within his desired parameters in order to move forward. There was a time when he would fall in love with a founder, and would use that as an excuse to slide on some of his other criteria. But doing so sometimes lost him money. Other lessons involve honesty and transparency, as well as the importance of knowing your true value-add. There’s way more in this angel-themed episode: The current angel market, including opportunities and valuations… How Fabrice sees the broader economy and recession risk… How a crypto-hacker got into Fabrice’s crypto wallet… and Fabrice’s most memorable trade. Any entrepreneurs will likely be able to relate to this one. All these details and more in Episode 123. Links from the Episode: 0:50 – Welcome Fabrice and talk about his passion for skiing 3:38 – Fabrice’s background as an entrepreneur 12:53 – The kind of work he is engaged in right now 19:30 – Reinventing marketplaces 20:55 – How Fabrice and his partner think about the geography of their investments 25:13 – Why his focus on marketplace businesses 27:28 – Why their investing approach includes putting money into hundreds of companies 32:18 – How they sell their stake 34:18 – Lessons learned as an angel-style investor 34:20 – EquityZen Podcast Episode 39:38 – How the investment landscape is looking going forward 45:01 – Fabrice’s thoughts on opportunity zones 48:01 – Any interesting crypto startups he’s looking into 50:27 – Most memorable investment 54:30 – Biggest company he missed investing in 56:30 – Fabrice’s skiing bucket list Transcript: Welcome Message: Welcome to the Meb Faber Show where the focus is on helping you grow and preserve your wealth. Join us as we discuss the craft of investing and uncover new and profitable ideas, all to help you grow wealthier and wiser. Better investing starts here. Disclaimer: Meb Faber is the co-founder and Chief Investment Officer at Cambria Investment Management. Due to industry regulations he will not discuss any of Cambria’s funds on this podcast. All opinions expressed by podcast participants are solely their own opinions and do not reflect the opinion of Cambria Investment Management or its affiliates. For more information visit cambriainvestments.com. Meb: Welcome podcast listeners. Today we have a great show for you with a man Forbes recently named as the number one angel investor in the galaxy. They actually said the world. But I don’t know any other angel investors on Mars. He’s an investor in a lot of companies you would recognize including one of our favorites and friends, Betterment, and has invested in 400 companies. He’s not just an investor. He’s also started up, sold, three companies. He runs the startup, studio, and venture fund, FJ Labs, which he co-founded with a buddy of his. We’re thrilled that he’s joined us. Welcome, Fabrice Grinda. Fabrice: Thank you for having me. Meb: You are live from Punto Cana right now. We’re excited to have you on and chat. But before we get to all the serious stuff, I hear you’re a fellow skier. So you’ve gotta let me know what is your favorite ski destination in the world? Fabrice: I’ve been skiing frankly since I’ve learned how to walk, since I was three. And I use a brace. I fell in love with powder reasonably early in my life. And I’ve had the privilege heli-skiing every winter in the Revelstoke area in British Columbia. The area around Kelowna, Revelstoke, Calgary definitely has the best deep steep tree skiing in the world. And it’s by far my favorite. Meb: As the locals call it, Revelstoke, because a lot of times these big storms come in and you get stuck there. We went there a couple of years ago. And it was pretty awesome trip, what people call the powder highway, listeners, which is a bunch of destinations and cat skiing around there. Fabrice, have you been to ski the Empire of Japan yet? Fabrice: I have. I…Hokkaido and…so the Niseko area is absolutely extraordinary. It’s probably the place where it snows the most in the world. The powder is extraordinary. That said, the mountains are not very high and the steep is not particularly…and the slopes are not particularly steep even though it’s an amazing place probably to learn powder skiing. And there’s also this really cool snowmobile up and ski down approach that they have, which is an alternative to heli, which I guess given the amount of snow probably makes sense. I find it somewhat less compelling than actually the Reve [SP] area and the entire British Columbia mountain range. Meb: You get to have ramen for lunch. So it’s kind of…it’s awesome. I love skiing in Japan. I grew up in Colorado so similar story. What was your home mountain? Chamonix, Taward [SP] Valley? Where did you go to? Fabrice: No. So I’m actually from Nice in the southeast of France. So I was skiing in the Southern Alps in [inaudible 00:03:05]. Those were the home mountains. But, of course, I would go to [inaudible 00:03:09] for the longer [inaudible 00:03:14] for racing. Meb: To get back to Europe, the only place I’d skied was Anton. And that was like not even half as much skiing as it was drinking beer. [inaudible 00:03:22], that was the name of the bar. Oh, my God. That’s a…that was a hard one to remember. I think half… Fabrice: I think Europe does Apres ski very well. Meb: Oh, my God. There was like half way up the mountain, half the people…you walk out and they’re like sleeping in the snow. You had to ski down afterwards. It was a mess. All right, listeners. We’ll get into some actual investing topics. You have an interesting background. I wanna spend most of the time kinda on what you’re up to these days with your investing because your approach is a little different than a lot that we talk about. I think it’s important to spend a few minutes on your background to help inform kinda what you’re up to today. People, it’s…I think it helps shape your world view of how you approach investing. So you started out as an entrepreneur. Maybe walk us through kinda your path from undergrad as an econ guy kinda starting companies and entrepreneur on the tech world. Fabrice: I grew up as always a nerd. And I got my first PC in 1984, a Compaq. I was 10 years old. It was, like, love at first sight. So I immediately started programming. I had a modem so I started connecting to BBSs, ultimately build a BBS. I went to Princeton knowing I wanted to be in the tech sector in some way, shape or form. The word tech entrepreneur didn’t really exist yet. I mean, there were Dell and maybe IBM had been created by then. That was it. By kind of virtue of luck and timing, Princeton started installing high speed internet connections in my sophomore year in ’93. So all of a sudden, we had high speed connections to the ancestor of the web in the sense that we were using things like Gopher and [inaudible 00:04:51]. Mosaic wasn’t live yet. Mosaic came out. And that was the very beginning of the web. And then when Netscape went public in ’95, it was obvious there was a bubble that was forming. So Yahoo came out. Amazon came out. And I actually was thinking through whether or not I should do something. But the thing is I graduated Princeton. And I was actually rather good student. I finished off my class with all of these different awards. But I was a socially awkward, shy tech nerd that I never really worked in teams. I wasn’t very socially gifted. And I thought, “You know, if I go and start something, I’m probably not going to succeed. I don’t have any business expertise per se,” even though I’ve built a small startup in college to pay for college. And so I actually graduated from Princeton in ’96 and decided I was gonna join McKenzie Company because it’s kind of like business school, except their pay you. And McKenzie actually does a really good job in investing in his people. And I took, like, oral, written communication classes, public speaking classes and working in teams. And the class was actually super helpful. But I went there as a means to an end. So I went there knowing I wanted to be a tech entrepreneur. And actually I thought I was gonna miss the bubble. But lo and behold I didn’t miss the bubble. And so in ’98, I felt I had learned what I needed to learn. They promoted me I guess from [inaudible 00:05:55] to associate. But, you know, the time has come. I’m gonna build a startup. Now the issue is at that time, I was 23. And it was a lot harder to build startups than it is today. You didn’t have AWS. You didn’t have open source. You needed a lot more capital. A lot of things that I wanted to build…I remember the first idea I wanted to build like…because I’ve mostly been working in fig or in the financial district services industry. An internet bank. You know, you would need like a banking license and capital and things that were probably too complicated. Frankly, they were too capital intensive for a 23-year-old. And the same thing, if you wanted to build an Amazon, too complicated. You need like supply chain management and inventories and logistics. And as an economist, you know, I’d always fallen in love with the idea of bringing liquidity and transparency to opaque and fragmented markets. That’s when I had saw eBay. And I thought it was an amazing idea of like creating a marketplace for things that didn’t necessarily have markets for them outside of like your garage sale. And so I decided to build the equivalent of eBay in Europe and with my partner in Latin America. So I was 23, sold my apartment, quit McKenzie, moved back to France. I raised $63 million. So that time it was…I mean, it was hard at first. Then it became really easy. I mean, people were just throwing money at you, if you had the right pedigree. And Princeton, McKenzie and an internet idea…money was flowing. And so I grew that company into like 5 countries, a 150 employees, like $10 billion in monthly sales and a buy-out offer. We were valued at insane prices. Ultimately, the bubble burst and it didn’t monetize for a variety of reasons I won’t bore you with. Neither did the Latin American one or the European one. I built a company in Latin America called [inaudible 00:07:28] or helped build it which then became like [inaudible 00:07:30] many years later. It’s not publically traded NASDAQ. Sure, I [inaudible 00:07:35] that thought long and hard. Okay. What do I do next? Do I go back to business school? Do I go to business school? Do I go back to McKenzie, try to join a venture firm?” And I’m like, “You know, I didn’t really become an entrepreneur because I wanna make money. I became an entrepreneur because I like building something out of nothing. And frankly I feel that I’m probably rather unemployable. I don’t like having a boss. I don’t like taking orders from people. I like to do what makes the most sense to me and maximize my utility to be an entrepreneur.” And so my main constraint and consideration then was, “Okay. I need to build…I wanna be an entrepreneur. Now we are in a world where capital is no longer available. I need an idea that can be profitable. And it doesn’t really matter to me what that idea is. It just needs to be capital-efficient and ideally profitable reasonably soon.” I thought long and hard and decided to bring ringtones and mobile games and wallpapers to the U.S. And that’s an idea that had already worked in Europe and in Asia. The U.S. was in the dark ages when it came to mobile. Now, of course, it was really hard because I went to all of the venture capitalists in 2001. And at the mere mention of B2C telecom [inaudible 00:08:36] every B2C company from E-tours to [inaudible 00:08:38] pets.com got under. All the telco companies got under. I don’t think I’d finish the sentence. And they hung up. I invested every last penny I had. I borrowed on my credit cards, lived in New York essentially on $2 a day for like two years, like, sleeping on the couch at the office, eating ramen noodles because I couldn’t even afford coffee or traditional food. But little by little, I managed to grab victory from the jaws of defeat. So I ended up signing all the major carriers, all the major labels, all the major publishers and the company grew. I mean, I missed, in the process payroll 27 times. At one point, we went from like 30 people to 7. I had to start coding again. I mean, it was rough. Revenues went from $1 million in ’02 to $5 million in ’03 to $50 million in ’04 to $200 million in ’05. I sold it to a publically-traded company in the same category for about $80 million June of 2004 and stayed on as CEO for 18 months and then went on to build the company I really wanted to build, which was basically…which has become since then the largest classified site in the world. So imagine what Craigslist should be. A mobile first, beautiful, spam free, murder free, prostitution free, personals free, version of a classified site that focuses on helping especially women who are the primary decision makers in all household decisions to buy and sell goods, to find…to hire a babysitter, to buy a car, to buy an apartment, etc. And so that company, OLX, I had launched with my business partner with whom I tried…I helped build [inaudible 00:10:05] of Latin America who is also a partner with [inaudible 00:10:06] today’s partner back in 2006. And we launched in 100 countries and 50 languages or so. And it really took off in 4 countries in Brazil, India, Portugal and Pakistan. So then we focused on these four countries, became really big and then started little by little expanding. And today, OLX has 350 million unique users a month, about 3,000 employees, very profitable in the countries which we dominate from Russia to Ukraine to Brazil to the UAE and also the leader in Pakistan, India, all of Africa, all of Lat Am and Southeast Asia. So very large company, which I sold in a rather complicated deal over a number of years to a publically-traded South African media company called [inaudible 00:10:51]. We did the first transaction with them at 2010 and stayed on as a CEO till I exited in 2013. What’s interesting is by virtue of being a consumer-facing internet CEO, other entrepreneurs would approach me and ask for money and advice. And after I started having money I started investing in startups. Now because I didn’t have time being a full time CEO as a day job, I’m like, you know, I need to only invest in things I understood. So I decided, “You know what? I’m only gonna invest in marketplaces. I’m going to create a set of thesis and a set of heuristics that allow me to make my investment decisions in one hour basically.” And so by 2013 with the other partner from the first company I started co-investing in a whole bunch of startups. So by 2013, I was already an investor in about a 100 startups. When I’m finished with OLX and I decided what to do next I’m like, “You know what? I’ve realized my partner and I both like building companies. And we both like investing in companies.” And so we created what ultimately became FJ Labs, which is this hybrid venture fund and startup studio that I’m currently running. Meb: The way that I came across you, Fabrice was that I started dabbling in private markets in about 2013, 2014 mainly as a way…my background was asa fundamental equity analyst, all quant now. This is kind of a hole in my skill set. And so I said I wanted to become educated about this world. And the only way, in my mind, to really do a lot is to put real money behind it. And so I started investing in a lot of private companies. And I kept seeing FJ Labs either as a current shareholder or participating in a round. And I said…oh, a funny thing that it stuck in my head is because I owned at the time kind of a vintage truck, which was a 1960’s Toyota Land Cruiser, which is FJ 40. And so it stuck in my head. I said, “What is this? Does this guy love old land cruisers? Where did he get the FJ?” And it turns out, of course, that’s I think you all’s initials. Is that right? Fabrice: Fabrice and my partner is Jose. So that’s FJ Labs. Meb: And so I kept seeing your name. And I said, “Okay. Who is this?” And then eventually I had read some more literature and kinda became more familiar with what you all do and said, “Let’s have them on the podcast and chat.” You have made this transition to being an investor. I think you briefly mentioned this. But you also continue to create companies internally, as well. Can you expand on that? You’re a purely passive investor. Tell us the general framework. Fabrice: By the standards of most investors, I’m probably a little bit crazy, if not probably a lot crazy. So every year I invest in about 75 new startups. We see every week about a 100 startups that come in through directly to us because we’re known as investors. A third are introduced to us by other VCs because they want our prospective in deals. And well, frankly, we don’t compete with VCs, right? Most VCs, they lead. They do due diligence, etc. We don’t lead. We don’t price. We don’t take board seats. We essentially do no due diligence. And I’ll talk about that shortly. Two one-hour meetings, so at most a week we decide whether we invest or not. And so because we’re writing small checks…you know, if you’re a lead VC in a series A and you’re writing a $6 or $7 million check, we’ll write 750K check. If you’re company who’s raising $20 million, maybe we’ll write a $1 or $2 million check. We’re the friendly value-added investor for the startups and for the VCs with really deep domain expertise in one business model, which is marketplaces and where we can really think through, you know, how do you build liquidity on the supply side, the demand side? What is the proper business model? Should you take a rate or a listening fee? Should you take another buyer or the seller? What is the scale of that rate? So because we have this deep domain expertise and that’s where we are specific, we’re actually reasonably generalists [inaudible 00:14:14]. The other third of the companies we get every week mostly coming from the [inaudible 00:14:18]. So to date we’ve invested in 400 startups. So that’s about a 1,000 entrepreneurs. And they come back with the next company. They send us their friends. They send us their employees. You know, so basically the way it works, so every week we get about a 100 companies. We will talk to 40 because 60 are out of scope. They’re like, you know, whatever. They’re great. But they’re in, like, satellite tech or hardware or agricultural tech or biotech. So 40 we take a one-hour call. We have the standardized reporting on this call where we evaluate the company base. First of all, does it meet our underlying theses? And number two, does it meet our heuristics in terms of quality of the team, valuation and business? And our valuation of the business is nine business selection criteria, which includes total addressable market size, the business model. But one of the most important one of those for us is unit economics. And we really want that. And by the way, the company may not be live. So it might be theoretical unit economics. But we want the company to recoup their customer acquisition cost in a unit level within the first six months and maybe to get three X net contribution margin per transaction over the first 18 months, relative to their customer acquisition cost [inaudible 00:15:25] LTB to be as high as possible. And again, maybe the company’s not there. But they need to have a story to explain to us about how they’re going to get there. And in fact, our evaluation of how well they understand their economics is a key evaluation process for us of how well they understand their business. And so we drill fairly deeply on that in the one-hour basis. The team makes a recommendation. We have a weekly investment call every Tuesday from 10 to noon. We review the 40 companies. And then either we pass, we pass for now, or I take a call and frankly, we invest directly. And on average, we’ve been investing in 1.5 companies a week. To date, we’ve invested in 400 startups, seventy percent in the US, 20% in Western Europe and the Nordics, 10% in Brazil and India, 65% seed and pre-seed. So pretty early in their life, about 25% series A and series B and 10% in the later stages. Check sizes have been varying. But the average check size is about 500K. Understanding that pre-seed, which is basically an idea on a PowerPoint or maybe less sub-50K revenue per month, we’re investing 225K. Seed, we’re investing like 450K. A, we’re investing 750 to 1. And then afterwards we do 1 to 2 or 1 to 3. To date, we’ve deployed a $140 million, of which $90 million has been my partner and my capital. So it’s been mostly personal capital. So we’re very different again from that perspective. And most of the capital’s been personal. And we’ve done rather well. We’ve had a 150 exits, realized exits, on the 400 investments. And on these 150 exits we’ve had a realized IR of 70% realized. You know, most VCs talk to you about like, “Oh, the implied value of my portfolio based on the last round of valuation is blah, blah, blah.” But, you know, a lot of that is gonna go to zero. So I’m talking only on the stuff that we’ve actually realized cash on cash and with about an average six X multiple. So that’s one of the two lines of the businesses, the business we do every year. And then for fun every year we build one or two new startups de novo. My partner and I have realized we love building startups. We love helping build startups. So since 2013, we’ve built about 10. And the way it works is we go to five business schools first year. And we tell people we have this apprenticeship and future EIR program, if they wanna join. And every year on average, about 225 students have been applying from the first year of Harvard, MIT, Columbia, Warden, and Sanford. We hire three to four of those. They join us full-time during the summer, during which we make them work part-time in one of the early stage portfolio companies, part-time in venture. We teach them venture. During the second year of business school they become…they work 10, 20 hours a week for us as venture investors filtering in bad deal. And then when they graduate, the idea is that they become entrepreneurs or residents. And they start looking to…for ideas to build with us. And the business model there is a little bit different. We give them $750,000 in exchange for 35% of the company for us, 65% for them. But we join as active participants. My partner and I become executive chairmen. And we do whatever needs to be done, whether it’s helping raise money or recruiting or frankly, even sometimes playing an operating role. Sometimes I’m CEO. Sometimes I’m chairman. Sometimes I’m something else. So it kinda varies. We do that for a year until the company raises its series A. We do the next one the next year. And that we’ve done in a number of companies. We’ve built a company called Adore Me, which is a lingerie e-commerce company doing about a $100 million in revenues. We’ve built [inaudible 00:18:41] in Brazil, which is the OTA doing $600 million revenues and profitable. We built Rebag, which is a handbag marketplace doing, like, $30 million in revenues and doing rather well. We are building a blue collar job site in New York called Merlin. We’re building a big real estate marketplace in Canada called [inaudible 00:18:58] and frankly a number of others including a number of failures, including a number of actually rather public failures like BP. Meb: BP. Fabrice, this was…I used BP to sell a car a couple of years ago. This is one of the more surprising startups that I was like, “This was so pleasant and seamless. The entire car buying and selling experience is so miserable.” Probably find in Twitter timeline somewhere. I was like, “What a wonderful app and company.” I kinda saw that it didn’t work out or maybe they got acquired or something. But that was a surprise to me. Fabrice: One of our theses is reinventing marketplaces where buyer and seller need to do a lot of work with a much more delightful user experience. And so creating these managed marketplaces where the buyer or the seller doesn’t need to talk to each other and the marketplace actually does a lot of the work and BP fell straight into that type of thesis. We had done really well in the first three cities. And it was a rather competitive industry with [inaudible 00:19:53]. I guess the founders felt that it was a land grab and we had to spend and expand as fast as possible. And basically, the company probably spent too much money and expanded too fast to too many geographies. One of the approaches I really recommend to all the entrepreneurs is really nail it before you scale it. Like, get your unit of economics right, prove underlying unit profitability in the core geography before you expand to other geographies and especially if you’re in a hyper local marketplace where liquidity and critical mass buyers and sellers matter because otherwise, the only thing you’re doing is expanding your losses and your burn. I think that’s a lesson that we didn’t take to heart in that startup. And we expanded too fast, burnt too much capital. And so it was rather difficult ultimately in a rather competitive environment to continue raising. That sadly was right off. But I actually loved the company. I loved the approach. I think we were, like, essentially a 100% five star reviews on Yelp. The NPS was really high. And we’d actually really fixed a broken user experience. But I couldn’t make it work from…more from a financial perspective and made a number of mistakes along the way. Meb: Even some of the ones that you love don’t work out. So I’ve heard you talk, and you’ve interlaced it throughout this thread a bit, about expanding and geography. And you were just talking about BP. And I’ve heard you mention, I mean, a number of these companies already pretty global. Talk to me a little bit about your interest in investing the majority in the U.S. because I know at one time, you guys were pretty heavy in some developing countries like Brazil, Russia and Turkey. And on the flip side, we had Jason Calcanis on the podcast. And he said, “No, no, no. You’ve gotta be located in Silicon Valley.” Tell me a little bit about the way you think about geography as kind of a nomad Edison of the world. Fabrice: If you have a choice, I think build a U.S. company. Cater your US customers. Don’t go global. It’s not worth it, right? Like the U.S. has 340 million rich consumers who are early adopters and it’s an amazing market. And if you’re at a $100 million in the U.S. in revenues it’s easier to go from a $100 million to $200 million in the U.S. than it is to go from zero to $100 million anywhere else. If you’re at $1 billion, it’s still true. Most likely, if you’re at $10 billion, it’s still true. So my core recommendation for most companies is do not go global. So if you would in the U.S. you’re gonna be worth so much more just from a valuation perspective. You can actually buy the foreign companies. And by the way, it’s exhausting to be international. It’s exhausting to be traveling. And it’ll decrease your probability of winning in the U.S., right? If Uber could take a step back and not have actually gotten into all these markets and just made sure they won a 100% of the U.S., I think they would take that trade-off actually almost every day of the week. Now that said, there are few exceptions to the rule. My comment really applies if you…your business requires like payments, inventory, supply chain management, etc. If you’re in a user-generated content business, you’re Wikipedia or your Facebook then by all means go global, right? Like, you don’t actually need local operators or local offices. It’s really easy. There may be a winner-take-all-business in that category. But for most other businesses, my recommendation is just do the U.S. Now that said, there have been opportunities for arbitrage where other countries were doing rather well. And you can invest in great companies there. And often it’s less competitive, valuations are low and you can have exits. Now the issue with these markets is you face market risk. Often when I’ve been investing internationally…frankly I’ve been investing in ideas that were reasonably proven because they had been done elsewhere and then invested there. But that’s not the core of what I do. The core of what I do is like business model reinvention and innovation in the U.S. and reinventing U.S. business models. So that’s the most interesting part. That said, I take into consideration…I’m an economist at heart so I look at the global macro environment. And so in 2010 Brazil was doing well. Russia was doing well. Turkey was doing well. So I was long [inaudible 00:23:35] these countries. And you may remember there’s a cover of The Economist with like Brazil is taking off. And you had like the Rio de Janeiro statue like as rocket ship going up. At that point, about 50% of our investments were in these three countries. All three of these countries made political choices. And so they were political choices originally that I felt were going to have negative macro consequences. I mean, it is somewhat different in each country. Like they elected Erdogan as president in Turkey. Vladimir Putin decided to I guess first invade Georgia, then invade Crimea and then create troubles in Ukraine. They elected Dilma Rousseff in Brazil who started passing non-business friendly laws and increasing the cost of operating there and capital controls, etc. And so I felt that these decisions were going to have negative macro consequences, which were ultimately going to have negative micro consequences in our world. So I basically shut down all of our investments in all three countries. And we went from 50% of the new investments there to zero which proved out to be a [inaudible 00:24:33] call. Especially the timing between investment and exit is about five years. So you wanna be somewhat of a contrarian. But you don’t wanna be investing near the peak. And I felt that we were…things looked too good relative to the direction that it was heading. I was able to sell off and avoid most of the disasters that happened in all these countries. And frankly, as I said, I’d be happy to just invest in the U.S. It’s still the place with the most interesting innovation, company skill, the fastest. I mean, China is probably the other ecosystem that’s just as robust. But it’s not a level playing field. Now obviously I prefer to be in a place where it is a level playing field. And it’s really the people that are the hardest working and the luckiest and the best to win, and not the people that are the most best connected. Meb: You mentioned your preference for marketplaces. And is that something that’s majority driven by just your skill set or is it actually a macro opportunity that you think is under-served or is right for more business models? Why in particular do you guys focus in that world? Fabrice: I came to a lot of marketplaces because as an economist, as I said, I like bringing liquidity and transparency to opaque and fragmented markets, of which there are many. A few years ago there was this famous slide that came out of all the sites that were attacking Craigslist category by category. Many people who were investing in that and many VCs it’s just, “Oh, this is done. You know, like marketplaces are done.” The reality is much of the world has not been digitalized yet. And the tech revolution has really not reached most of the business sectors or industries. It hasn’t reached the public sector. And I find that marketplaces are the most scalable and interesting way to actually build businesses with…in a capital efficient way in every single category. And so right now when we look at the B2B world where many of the transactions are done the old-fashioned way through Rolodex and connections and Excel or email, they’re just not efficient. And so all of the efficiency that has happened in the consumer-facing world has not yet happened in the B2B world. So we’ve been investing a lot in B2B marketplaces where no day…like petrol chemicals marketplace where RigUp, which is an oil services contractor marketplace, where if you’re an oil services firm and you wanna employ a welder, they’re a marketplace where you can find that and that person for a few weeks. And they’re doing hundreds of millions of sales and categories or industries. We’re in a dump truck marketplace called Tread that in the dump truck market people don’t realize it’s $37 billion a year market. And things have been rather inefficiently. All these categories which are much larger than people suspect are ripe for innovation. And I find that marketplaces are actually by far the most efficient way to go after them. And so yeah, that we’re…many people think we’re both at the…you know, that everything that needs to be done has been done or invented and that marketplaces are done. And I actually think that’s far from true. And like, I think we’re still at the very beginning of the tech revolution. As Jeff Bezos wrote in his first letter to shareholder and as he keeps republishing and rewriting every year back from 1997. We are day one. I mean, we’re maybe at the bottom of the first inning. We’re at the very, very beginning of the tech revolution. Meb: One of the unique properties of what you do, Fabrice, is…and when people probably heard the intro and they heard you say, “We invest in 400 companies,” they probably dropped their jaw and say…someone who wanted to disparaging or derogatory would say, “You know, that’s the spray and pray method. You’re just investing as many things as possible.” But maybe talk a little bit about how that could actually be a compliment with some of the properties of investing in companies and why your approach is to invest in so many companies versus concentrating in just a handful. Fabrice: I would argue we don’t do spry and pay, given that every week we get a 100 companies. We’re investing in 1.5, right? So every year we’re seeing 5,000 plus companies. And we’re making 75 investments. It actually is a pretty strong filter, especially since it’s in a given vertical. I actually don’t have a portfolio construction theory where I’m trying to like create the ideal portfolio with a set number of companies I wanna invest in or a set number of capital that I wanna deploy. Now, in light of the strategy that I’ve defined, which is I wanna mostly do seed and pre-seed. I don’t wanna lead. I don’t wanna price. I don’t wanna take board seats. There is a maximum amount of capital I can deploy before which I would probably start competing with VC, which is the last thing I wanna do because I wanna be their partner. I wanna bring them deals, etc. So I would argue we’re not spraying and praying because we’re actually rather specific or rather selective in the deals that we do especially, you know, it’s under one business model. But that’s it. There is a lot of value and diversification. If you think of traditional public market returns, they follow a normal Gaussian distribution curve and everything falls within whatever, one standard deviation of the [inaudible 00:29:12] basically. In private markets, especially the venture markets, actually things have a tendency to follow power law. So the top few deals actually account for most of that return. So if you look at the U.S. in the last two decades, you’ve had four super unicorns, companies with over a $100 billion, right. You have Facebook, probably Airbnb, and Uber in this decade. The decade before, you had like Facebook and Google. The decade before, you had like maybe Cisco, Oracle and Microsoft, you know, and Intel. So it’s like two a decade basically. Maybe three a decade. And [inaudible 00:29:43] in China by the way in the last two decades. Then you have maybe 20 companies that are worth like $10 billion, $100 billion. And then there are like a 100 companies that end up being worth over a $100 billion or over $1 billion. And when you look at all of the venture deals, right, every year there’s about 5,000 seed-funded startups with 500K or more. When you look at the outcomes really over the course of a decade, 50,000 seed-funded startups, it’s actually the top 100 per decade or a 120 per decade that account for 99% of the returns. The top two account for 40% of the returns. The top 22 account for 80% of the returns. You really wanna be in those companies and there is a real value in diversification to guarantee the probability of being in those. So Kaufman did a study of how many…what’s the ideal portfolio size for an angel investor? And the funny thing is the more companies you were an investor in. the higher your IR, unless you got really lucky. And so for most people, there is actually really, real, real value in diversification. All that said, we’re probably rather different than most…what I just described kinda suggests you want to try and play Powerball. You’re trying to be in that 1,000 [inaudible 00:30:47] or you’re trying to be in the next Facebook or Uber. I actually am…I’m investing with a belief that I’m not going to be in that because I chose to be in New York that we can talk about in a few seconds, that I’m not gonna see these deals. By virtue of investing in these companies that have valid business models, that have great unit economics I had…also by not being in the board, by not leading, I actually get a lot of exits, right? It’s very rare an angel investor VC has a 150 exits that are realized. And the reason is we’re probably doing the anti-VC strategy. Most VCs, if you talk to them, they’ll tell you, “Concentrate your bets. And find the winners. And then double down on the winners.” We’ve actually been selling our winners. So our traditional path of ownership is we invest in the seed and we’ll sell it maybe in the C route. There’s no negative signal on selling because we own like less than 5% of the companies. And often we do it as a favor. Like the company becomes really, really hot and like whatever. Gridlock, Sequoia, and Andreessen all wanna invest. They all have 50 minimum ownership requirements, so that’s 45% dilution. The [inaudible 00:31:47] is like, “Look. I love all you guys. I want you guys and I definitely don’t want you to fund anywhere else. I don’t want that much dilution. Go buy some early investors.” If we find that the valuation is richer than we think the business dictates, we will sell 50 to 75% of our stake in the upper end. And that has allowed us to put out great returns and get reasonably early liquidity and much earlier than traditional VCs. And so it makes sense in our case to have this reasonably diverse portfolio with [inaudible 00:32:13] economics where we’re selling the upside. And I would argue that we are not at all spraying and praying. Meb: Traditionally selling to venture capitalists who are then buying the stake in the C round or are you using companies like EquityZen? What’s the route to liquidity? Fabrice: Now we’re mostly selling to the VCs when there’s [inaudible 00:32:30]. So in the private markets, companies are not sold. They’re bought. Either an acquirer comes in and wants to buy the company or we go public. There is a…a new [inaudible 00:32:38] happens. And as I said, it’s typically around the series C that things become hot because right now, all the VCs that used to be at the series A and B have raised funds that are so large, like, they’re multi-billion dollar funds, they wanna write bigger checks. And there are not that many companies that get to a point where they can accept $50 million [inaudible 00:32:54] where there’s so many people trying to write $50 million checks. [inaudible 00:32:57] have gone reasonably high. And vision funds, of course, is creating inflation in the later stages. And so in fact, because everyone else is going late stage, I’m going earlier stage. So I’m…I’ve actually moved from seed to now encompass pre-seed, which is not something we did in the past. The main way we sell is to other VCs and when a round is structured. So it’ll be a round and the primary price will be whatever, a $100 million. And they’ll buy secondary at a 10% or 20% discount. Occasionally, we’ve transacted on [inaudible 00:33:29]. And I think we’ve also used EquityZen and [inaudible 00:33:32]. But there, we’ve been more buyer than a seller. We haven’t sold much stuff there. We mostly bought shares in companies that we were interested in that we didn’t have exposure to. That said, the main reason for that by the way is a lot of the companies that we’re selling, they’re not big enough that they would be on an Equidate or [inaudible 00:33:48] or an EquityZen. I mean, the things that trade there are really quasi-public companies. It’s like Airbnb and Uber, companies that are really big, that are really reasonably well-known, that have high market caps. Companies we would be typically selling, they’re at like $80 million valuation or a $100 million valuation, $200 million valuation. They are not on these platforms. And we can only sell them to informed buyers who actually have done a lot of due diligence, decided they want more exposure or they want exposure in the category. And again, we don’t typically sell a 100%. We sell like 50% or 70%. Meb: Dog, talk to me a little bit about…and by the way, we just had the founder of EquityZen on a prior podcast. And we had to bleep out like half of the episode because I was naming all these companies. And he’s like, “Meb, you can’t be naming these because these are active offerings. We’re gonna have to bleep out all the names.” Tell me a little bit about lessons learned. So you’ve been doing this actively as an angel style investor. Four hundred companies. You probably have a lot of successes, but also a lot of scars or disappointments or takeaways. As you look back over the past five, six years, what are some of the things that you’ve incorporated into your methodology as the years go on where you say, “You know, look. This is process we implemented because of XYZ,” or, “Hey, we’ve decided that we prefer founders over ideas or vice versa?” Fabrice: Number one, if you’re gonna be investing in this asset class, be diversified. I mean, a few years ago I created this angel list co-investment vehicle, which we would do on a deal-by-deal basis. And we’re like, you know, up to, whatever, 75 deals we do a year. There was some where we have enough availability for friends and family to invest with us. The thing is, you know, people like my dad don’t turn around very quickly. And so at the end of the year…so they miss most of the opportunities. And at the end of the year, they had about two investments. So, you know, three years later, they had five. And we would be at like 225. And then you would lose money on every single deal and tell me, “Fabrice, you suck. You don’t know what you’re doing.” And I’m like, “Okay. This doesn’t work. You should not…you, as a private investor without actually the ability to make…to evaluate these deals, should not be investing frankly in the asset class in a deal-by-deal basis. You should be investing in the fund. And you should get exposure in the entire portfolio because you need diversification. If you have less than 20 or 30 or 40 investments, you’re probably going to lose money as an investor.” So we ended up not doing for the most part deal-by-deal angel syndicates. Instead, we created like a co-investment vehicle where people can invest with us. It’s kinda [inaudible 00:36:18] what we invest 100K and the fund puts a 100k but it’s not really a…it’s not a fund. There’s really capital put upfront and there’s whatever [inaudible 00:36:24] and I can sell. Meb: Where is that located? Is that on a platform? Do you guys do it on your own? Fabrice: It’s on angel lists. Meb: Okay. Fabrice: And we do one of these. You need to be an accredited investor. There’s a 99 investor limit so whenever we invite 99 investors, we stop it. And whenever we run out of money we do the next fund. So there’s no real…I mean, we have a traditional venture fund, which is the equivalent of a $200 million fund, which would be your second and traditional fund. But there our minimal investments are like $5 million. That’s different. We’re rather different I guess from most investors you see because a big chunk of the capital is our own capital rather than third party institutional funding. In fact, we have no institutions. We only have family offices and strategics investing with us. The second big learning, I’ve learned to stick to my guns. So like I want the team, the business, and the valuation to all be within our expectations for us to invest. So I used to have these [inaudible 00:37:11] where I would fall in love with an entrepreneur and it’s like, “You know what? The entrepreneur trumps all my concerns of the business where valuation are irrelevant. They’re so amazing. They’re gonna figure it out.” More often than not, I ended up losing money when I did that. And I’ve realized I want all three. In fact, I want all four things to be true. I want the idea to meet my thesis, which is my perspective on the direction the world is heading in to invest along…to create that world of tomorrow and that better world of tomorrow. Two, I want to love the entrepreneur. Three, I wanna love the business. And four, I think the deal terms need to be reasonable. And all four of these things need to be true. And if they’re not true, we should not invest. And we should tell them we’re not investing, which I guess leads me to point or lesson number three is we’re always honest and radically honest and transparent. One of the things I hated as an entrepreneur is I would meet a VC, I would feel the meeting went well, and then I’d never hear from them again. I never knew where I stood. I never knew if they were interested or not, if I was ever gonna get a term sheet. We tell people where they sit and we turn around quickly. And I’ve realized that builds a lot of credibility. And I guess the next thing I’ve learned is you don’t necessarily need… You know, early on in this podcast you said, “Hey, you know, you’re just on the one side. Maybe you’re just a passive investor.” And you would think we’re a passive investor because we’re in so many companies and we’re not on the board. But I would argue we’re probably some of the most value-added investors, entrepreneurs, especially marketplace entrepreneurs have, because we actually help them raise money. Our core value-add for the entrepreneurs is…and we’ve realized like there are big venture funds out there like Andreessen and they have so many resources and headhunters and venture partners that can help you with all these things. We obviously don’t have the time, the resources, to do that. But we’ve realized what an entrepreneur is doing is always raising money. Entrepreneurs are raising on a continuous basis and we for the most part…not even for the most part. We are not going to be raising or leading the next round. We have no [inaudible 00:39:03]. We don’t have an [inaudible 00:39:05] of like wanting a low valuation. We want them to do well. And so because we’ve built these relationships with all these VCs, we will introduce them for their next round to all the top VCs. And it’s win-win-win. The VCs love it because they see differentiated deal flow and companies they can invest in. The entrepreneurs love it because it’s easy for them to raise money and easier than it would be otherwise and they get the meeting. We made the intro to [inaudible 00:39:28] and they get the meeting. And we love it because the companies we invested in get funded. And I think we’ve come to realize what we’re good at and what to focus on and not try to boil the ocean from that perspective. Meb: And as you look around the landscape today, I think you see a lot of macro commentary about there being a lot of money sloshing around. So as there’s been a number of developments in the past cycle, namely valuations creeping up, the existence now of money, a lot more money kinda looking at the early stage rounds, you have the platforms like an angel list or FundersClub or Wefunder, all these others and also this new legislation, which is still getting finalized on opportunity zones. There’s a lot going on. Tell me a little bit about just kinda how you see the landscape. Are you worried about all the money chasing the deals? Are you never seen so many awesome deals in your life and it’s not a concern? What’s the lay of the land look like to you? Fabrice: I’m seeing more opportunities than ever before, especially in the early stages. So our returns are pretty exceptional, right. Like 70% of realized IR over like 19 years. And so like I don’t know if it’s probably top .1% VC of all time. While I think we generate alpha, I think the beta and the sector we’re at is really good because the fund economics are such that if you’re a fund manager and you’re good, your economic incentive is to go and raise a bigger fund, right? So all of these people from Excel to Sequoia to whatever have gone from like $400 million in our funds to like $2 billion in funds, 5 billion in funds, etc. And so they need…because of course 2% of management fee at $5 billion is $100 million. Just a lot more than 2% management fee on $400 million, which is $8 million. So the economics have incentivized managers to raise bigger and bigger funds. And in the later stage, especially because of the introduction of the vision fund, but also frankly just because everyone has raised bigger funds, there’s a lot of value…a lot of competition and it is very, very [inaudible 00:41:21]. It has actually pushed me to the other direction. As I said, we used to do seed. Now we’re doing pre-seed because I feel that at the seed and pre-seed stage, there are few funds and there are few great funds. I mean, Floodgate or Uncorked or Slow or [inaudible 00:41:36] at the pre-seed stage that they’re F4. You know, there are a few amazing people. But for the most part, we’re competing with angel investors who don’t have VCs, who don’t have heuristics, don’t have deal flow, and don’t necessarily know what they’re doing. And the [inaudible 00:41:50] are pretty ripe. And if anything, it’s less competitive than it was a while back. There are few years ago where out of YC, it was completely crazy. So YCombinator, every single deal was like an on cap node and at crazy valuations ultimately from a conversion perspective. And that was, like, 2011 and 2012. It has become way less crazy. Valuations, you know, are high, but not completely unreasonable. So in the early stages, not that crazy. The YC remains very frothy. But our strategy there is just to wait until the next round or do a seed extension. So we’re more creative in where we play and where the rounds are played. And by the way, by virtue of being nimble…you know, we’re a quasi-family office masquerading as venture fronts where we can change stage. We can change geography. We can change theses all the time. We’ve been able to navigate the changing landscape. And so far, you know, I don’t have a set number of companies want to invest in every year. If I meet great entrepreneurs and great deals and great companies, I invest. And if not, I don’t. I have no obligation to go in one direction or in the other. And I am reasonably confident that the companies we’re investing are amazing. The evaluations are good. Now at a macro level, yes. Our interest rates are still reasonably low. Is there a lot of capital? Absolutely. The good news is in my category, it seems to be chasing the later stage deals that seem to be very expensive, which is creating a lot of exit opportunities. Now continuing on the macro level we’re in the eighth year of a non-interrupted economic expansion, which is longer…one of the longest expansions ever in history. There are a number of signs. You know, the yield curve is flattening and maybe inverting in the not too distant futures. There’s…at the same time it actually doesn’t like look…it doesn’t feel like we’re at a cycle, right? We’re like 3.90% unemployment and inflation remains reasonably tame. For the first time in 10 years, we have aligned growth in every one of the major economies from China to Western Europe to the U.S. On a pure cyclical basis, you don’t actually see fundamental recession risk in the next 12 months or 24 months. That said, there is a black swan risk, which is probably more geopolitical because we have more of these uncertain political actors who could make geopolitical decisions that could lead us to recession and/or are doing weird things like trade wars that should not exist. There is clear geopolitical risk or greater than before. So the risk of a downturn is greater than has been. But barring these types of black swans, I actually remain pretty optimistic. And in our case, I mean, right now it’s a great time to actually have exits. I mean, this year we already had one IPO I think over 10 successful exits. We have another company that filed to go public not that long ago. So things are looking really good. I mean, we’re having one of our best years ever, if not maybe the best year ever. Meb: Funny. I laugh. There’s a quote one of my buddies have that he says, “You know, so many people on the public markets love saying this is the ninth inning.” And he says, “Have you ever been to a baseball game? You know how long the ninth inning lasts? This could be years.” So that… Fabrice: Exactly. Meb: I love that analogy. We gotta come up with a phrase for the…what comes before pre-seed coming years. Everyone keeps moving downstream. It’s maybe just your Labs is inventing a new concept and launching it. I’m gonna ask you a few more quick questions. I’d love to keep you around today. This has actually been a lot of fun. Put on your economics hat and I don’t know how familiar you are with this new legislation on opportunity zones. If you’re not, we can skip it. But if you are, do you think something as a startup founder in the U.S. that this is a simulative type of initiative where they’re giving tax breaks for these companies and investments in downtrodden communities or is this just gonna be abused as a tax shield? Any thoughts on that in general? Fabrice: Don’t know the legislation well enough. My intuition is that it won’t do anything great for these regions but that said, that the macro direction or trend is for people…is for more and more places to have great and robust technical systems, right? In the late 1990’s if you wanted to hire like developers, you really needed to be in Silicon Valley. Like there is no talent elsewhere. And by the way, my first company, I had to spend millions of dollars building servers and building data centers and having Oracle and Microsoft licenses. Now you just use AWS. So the cost of entry has decreased dramatically. The barrier to entry has decreased dramatically. The ability to code has become…it’s way easier to code than it’s ever been. You can…I can basically build almost anything for like 50K. And frankly, if you can get sweat equity for people basically for free, you can build almost anything. And that is creating ecosystems that are emerging and very robust in many, many cities. And we’re now investors and startups in like North Carolina and Chicago. And, I mean, Chicago maybe is already urban and developed, but like in many non-traditional centers. Miami and, of course, New York, Boston. Now like Los Angeles with Silicon Beach has really, really emerged. But even in Chicago after Groupon…has great companies. And we’re investors in a company in Chicago called Reverb. They’re a music instrument marketplace. They’re doing like over half a billion in sales in used music instruments. I mean, you’re seeing these wonderful businesses emerging everywhere. I don’t think it’s actually driven by legislation. It’s really driven by the cost of starting startups has declined dramatically. It’s easier to start startups than ever before. And so you have more places where people are emerging and capital is becoming more available though, especially in the series A and B, and remains concentrated in the major cities. But that’s okay. Maybe your headquarter’s there. And if you really succeed, people will find you. And I don’t actually suspect that it’s driven by legislation at all. It’s also driven by San Francisco deciding to shoot itself in the foot. I mean, they are passing anti-business legislation. They’re creating…they’re blaming tech on their housing problem where frankly, it’s purely a supply problem or it’s mostly a supply problem. If they removed air rights and you could build up, they wouldn’t have this overpricing issue. Between the negative…the anti-business legislations, the idiotic housing legislation, they’re increasing cost to the point where there’s an exodus, both of people in the tech world and not tech world. So the combination of those two things I think will be a more prevalent driver of the growth of other ecosystems than underlying tax or business legislation. Meb: A couple more quick ones and we’ll let you know. We didn’t talk about this. We actually don’t talk about it much on this podcast surprisingly. What’s been your involvement and do you see any interesting startups or do you participate at all in the crypto world or is that totally scarred by getting your wallet hacked years ago? Fabrice: It didn’t get hacked years ago. I got hacked last November. So the thing is we didn’t talk about what we do as hobbies or whatever. But like I’ve been a gamer my entire life. I’ve always had these powerful GPUs so I started mining for fun in 2011. But I started doing it for, you know, intellectual masturbation or for fun and to use my GPU in its down cycle. And as a result, lived through all the bubbles that happened to the space and lived through [inaudible 00:48:40] where I lost everything. So multiple times and I [inaudible 00:48:44], etc. Oh, now between like two-factor identification and a number of their security measures, I was safe. And of course lo and behold I wasn’t and I got hacked and people literally got access into everything I had. The thing is by sheer luck…and I will easily admit that it was luck. I had decided that validations were too frothy and I’d sold everything the week before. So literally, you know, millions of crypto that could’ve been sold, they were not sold. I think at the end of the day they sold .01 BTC out of all the crypto I’ve ever had. So I think that was great. So involvement in crypto, I decided to stop direct involvement in crypto once things became complicated enough. I mean, we’re still years away frankly from real contute mass market consumer-facing applications. We’re still investing in the underlying tools. So FJ has invested in maybe 10 startups in the crypto space. But almost all of them were like infrastructure and groundwork breaking. We decided to not…to stop drooling over direct investments. And instead, we’ve helped build a hedge fund called Lydian [SP], which one of our EIRs is leading. We basically invested in that instead. So we’ve actually allocated our own capital to the hedge fund that we helped build, rather than continuing to direct investments because we felt that the expertise both in the trading side and frankly on the startup side was different enough that it…from a [inaudible 00:50:05] focus on marketplaces that I…that it deserved a dedicated fund. Meb: We haven’t much participated in that world, except we reserve the Hodel Ticker for a public fund humorously watching from afar a lot of these ETF issuers try to do these crypto funds. The SEC was saying, “No dice for a long time.” We’ve been sideline cheerleaders, but don’t have any dog in that fight. One of the questions we always ask our guests near the end is what has been your most memorable investment? And so this can be good. It can be bad. But really it’s meant to be the first thing that pops into your head. Fabrice: It’s necessarily not an investment because we’re experienced as a startup entrepreneur. When I was running Zingy I…you know, and I missed payroll like so many times. We become cash flow positive and April 1 of 2003 but the [inaudible 00:50:52] carriers were paying us quarterly plus 45. So I actually didn’t even know and we gnawed on this and said we had a good database. Get database extracts to their databases to like get paid. So we didn’t even know what we were doing. That’s the period during which we had signed all the carriers. We had gone from 27 people to 7 people. I was like working day and night as everything, project manager, programmer, CEO, and essentially janitor. When you stop paying people, you know, they kinda stop showing up for work. So things were like really bad. And finally on August 16 or August 15 of 2003 the check from Sprint arrives for like half a million dollars. I think it was like $457,000. And that’s when I got it. We were saved. Like we were cash flow positive. And that was like such a relief that we had made it. Like we had covered the chasm. And once you’re profitable, you’re a master of your own destiny. And until then, like, the three years or the two and a half years before then had been such a struggle, especially in the post [inaudible 00:51:45] days. And I remember that day much more than, like, the day I sold my company and made $40 million, you know, the first…the second big company I built or the next company I sold for hundreds of millions or of all the ups and downs or frankly even like…I was investor in Baba right? Like I invested in Ali Baba. I had $4 a share when it was private. And I’ve been riding it all the way since. But none of these has, you know, gut-wrenching or frankly meaningful as the day I like, turned it around. I was like, “Oh, my God. We’re getting paid by $100,000 in credit cards. I can pay the rent and the employees. And we’re gonna be around.” Like, that, was probably the most memorable day for me. Meb: That’s funny. You know, you talk to so many entrepreneurs. And this is obviously a little bit survivor bias because the ones that don’t make it don’t have these stories. But even the ones that do make it, how many times right on the ledge…I mean, we definitely had a couple of years in the sunken place where tough times and you…the story with Elon Musk and Tesla being days away from bankruptcy and all sorts of things. Fabrice: This summer…I mean, we had an exit in our Turkish company where I probably would be now [inaudible 00:52:47] are gonna end up making a 110 or 120 X my investment. The company was a day away from closing shop, a mobile gaming company where we’re…they’re doing it like a Clash of Clans type game for the emerging markets on Android and every game…not one of the games they ever made ever worked in that strategy. Like, they all failed. They did okay, but nothing great. We were literally closing the company. And the team for fun had built a simple casual game called 1010, kind of like 2048 or…and they put it in and like instant, instant mega hit. The company becomes profitable overnight. [inaudible 00:53:20] was okay. Well, maybe instead of trying to make these complex games, let’s focus on these casual games. And we seem to be pretty good at making them and it turned all right. We went from being a day away from closing shop, releasing a game we’ve built in one day, one day. Like it was nothing…it had nothing to do with anything we ever did. And then the company I think last year did, like, $30 million [inaudible 00:53:39]. That has been success to success to success and then Zynga bought it for like $250 million cash upfront like…and early this summer, like three months ago, four months ago. And just that was like a 75 or 80 X for us. And so you have these stories where things can get really, really close to the edge or the precipice. But of course, many times you get to the precipice and you fall off the cliff. I mean, you don’t actually make it. We’ve been lucky both in our professional lives as entrepreneurs and as investors to make it. But 50% of the time actually in our investments. So we’ve made money in about 50% of the deals. Meb: We laugh here all the time where we talk about how we spend so many hours on building these very serious and well-researched funds. And we’re gonna launch some stupid thematic cannabis ETF that will probably raise hundreds of billions of dollars and end up being something totally different. But so far, we’re trying to stay away from it. What’s been the biggest whiff where you passed on something that’s gone on to become…I was laughing earlier when you said a $100 billion companies because that’s almost passé now. We have two $1 trillion companies. We’re now into the Ts. Memorable whiffs? Fabrice: I was an early investor in Tencent and I sold like just after the IPO. Tencent is today worth, I don’t know, about $500 billion. I don’t even pay attention anymore. It’s too depressing. And yeah, I made 50 X on my money. But at that time, they were just a messenger. And I never imagined they could become a Facebook plus Zynga plus WhatsApp plus everything else, right, like, and much more and a payment system and a conference platform and so that…they were just [inaudible 00:55:08] which was at that time…really ICQ was pre…it was free but it really became WeChat. And it’s one of the lessons that led me to, “Okay, instead of selling a 100%, maybe I sell 50% or 70% because sometimes trees do grow to the moon even though it’s really, really rare.” I had an opportunity to invest in Zynga very early, which I passed on because I don’t usually do gaming. I’m a marketplace guy and I thought that I didn’t like gaming economics. We’re more of a studio business. I felt acquisition cost would increase. I’m sure it and would increase and development goals would go up and so I didn’t like the business and…but of course that was all true. But in the meantime, you could’ve built a $10 billion business. I passed on the $2 billion round at Uber and I passed it. I wrote in my debrief, “I’m gonna regret this the rest of my life because I love the product and I love the company and I love everything.” But, you know, I made the mistake of looking at their numbers and I have a hard time justifying $2 billion. You know, when we’ve been in the business as long as I have, like, you have a lot of near wins and near misses and companies you could have invested in or the companies that you could’ve made money and didn’t sell, etc. but…and it happens, right. Like my first company that I was running, we had a $300 million cash offer from eBay and 40% of the company and wanted to sell. I would’ve made a $120 million. But my majority shareholder [inaudible 00:56:18] voted me down and I didn’t. I was 24. I didn’t really know anything. And I did have a drag. I didn’t even know what a drag was. There’s been a lot of near misses. Hopefully, the next few times we don’t do near miss, but we actually convert and hit the home run. Meb: What is on Fabrice’s skiing bucket list for somewhere you haven’t skied yet, but love to? Fabrice: Did recently Greenland and Iceland. Right now on my skiing bucket list, Antarctica and there’s a new heli operator that skis Antarctica. I haven’t done the Himalayas. I haven’t done [inaudible 00:56:48]. I have not done [inaudible 00:56:50]. So all of these are on the to do. I was actually recently invited to go and…so OLX is massive in Pakistan. And I’m a pretty big celebrity there. So I was actually invited to go heli ski in Pakistan. So all those are on the skiing bucket list for the next decade. Meb: Three I think. I still have never been to Silverton outside of Telluride. It’s not a crazy mountain. But I’ve always wanted to go to Taos. It’s not necessarily the best snow but seems like a pretty cool location and I’d love to get down to Portillo or any of those places in Chile. Fabrice: That’s also on it. I’ve not been to neither the Argentinian or Chilean ranges, heli ranges and they’re both on the to do list. Meb: Good. Well, we’ll have a startup economic summit down there and then have a conference. The show was actually sponsored last year by Mountain Collective Ski Pass. And so that had 2 days at about 20 different locations. We’ll have to…we need to get them to re-up, Jeff. I…we gotta reach out to those guys. Fabrice, where are the best places for people to find you and all of my listeners that are going to send you all of their amazing pitch decks? Where do people follow you, if they wanna follow your writings, your ramblings, your investments and everything else? Fabrice: The easiest probably to go to my blog. It’s just my first name, last name .com. So fabricegrinda.com. I write once every other week or so but whatever crosses my mind. The entire portfolio of companies is there, our theses, whatever crosses our mind. And I’m also on Twitter and Facebook, Instagram, and LinkedIn and all the usual suspects. Meb: It’s been a pleasure. If you find yourself in Los Angeles, let us know. We’ll hop up to Mammoth or to Squaw or to any of those places. But Fabrice, thanks so much for joining us today. Fabrice: Thank you for having me.

2018-08-22T17:45:30

2018-08-22T17:45:30

https://fabricegrinda.com/?p=9432

2021-05-28T07:08:46

2021-05-28T07:08:46

summer-book-recommendations

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https://fabricegrinda.com/summer-book-recommendations/

Summer Book Recommendations

<p>I received numerous requests for book recommendations in the last few weeks. The rise in the mercury clearly correlates with an increase in reading under umbrellas on the beach.</p> <p>Here are a few books I really enjoyed over the last few years. Note that my tastes are far ranging and eclectic and cover everything from sci-fi soap operas to behavioral economics.</p> <h3><center><strong>Beach Reads and Page Turners</strong></center></h3> <ul> <li> <a href="https://www.amazon.com/Year-Provence-Vintage-Departures-ebook/dp/B003L1ZVMW/ref=sr_1_2?s=digital-text&amp;ie=UTF8&amp;qid=1534449598&amp;sr=1-2&amp;keywords=A+Year+in+Provence" rel="noopener noreferrer" target="_blank">A Year in Provence</a> by Peter Mayle</li> <li> <a href="https://www.amazon.com/Bill-Vampire-Book-1-ebook/dp/B0058I8A6K/ref=sr_1_2_sspa?s=digital-text&amp;ie=UTF8&amp;qid=1534450050&amp;sr=1-2-spons&amp;keywords=Bill+the+Vampire&amp;psc=1" rel="noopener noreferrer" target="_blank">Bill the Vampire</a> by Rick Gualtieri</li> <li> <a href="https://www.amazon.com/Circling-Sun-Novel-Paula-McLain-ebook/dp/B00R04GCMY/ref=sr_1_1?s=digital-text&amp;ie=UTF8&amp;qid=1534449951&amp;sr=1-1&amp;keywords=Circling+the+Sun" rel="noopener noreferrer" target="_blank">Circling the Sun</a> by Paula McLain</li> <li> <a href="https://www.amazon.com/Gone-Girl-Novel-Gillian-Flynn-ebook/dp/B006LSZECO/ref=sr_1_3?s=digital-text&amp;ie=UTF8&amp;qid=1534449741&amp;sr=1-3&amp;keywords=Gone+Girl" rel="noopener noreferrer" target="_blank">Gone Girl</a> by Gillian Flynn</li> <li> <a href="https://www.amazon.com/Infinity-Born-Douglas-Richards-ebook/dp/B072584M83/ref=sr_1_1?s=digital-text&amp;ie=UTF8&amp;qid=1534450030&amp;sr=1-1&amp;keywords=Infinity+Born" rel="noopener noreferrer" target="_blank">Infinity Born</a> by Douglas E. Richards</li> <li> <a href="https://www.amazon.com/Last-Days-Night-Novel-ebook/dp/B01A4AXM3W/ref=sr_1_1?s=digital-text&amp;ie=UTF8&amp;qid=1534449929&amp;sr=1-1&amp;keywords=Last+Days+of+Night" rel="noopener noreferrer" target="_blank">Last Days of Night</a> by Graham Moore</li> <li> <a href="https://www.amazon.com/Murder-Fine-Thomas-Emily-Quincey-ebook/dp/B07D7HDDGN/ref=tmm_kin_swatch_0?_encoding=UTF8&amp;qid=1534449655&amp;sr=1-1" rel="noopener noreferrer" target="_blank">Murder as a Fine Art</a> by David Morrell</li> <li> <a href="https://www.amazon.com/Old-Mans-War-John-Scalzi-ebook/dp/B000SEIK2S/ref=sr_1_1?s=digital-text&amp;ie=UTF8&amp;qid=1534449626&amp;sr=1-1&amp;keywords=Old+Man%E2%80%99s+War" rel="noopener noreferrer" target="_blank">Old Man’s War</a> by John Scalzi</li> <li> <a href="https://www.amazon.com/Ready-Player-One-Ernest-Cline-ebook/dp/B004J4WKUQ/ref=sr_1_1?s=digital-text&amp;ie=UTF8&amp;qid=1534449905&amp;sr=1-1&amp;keywords=Ready+Player+One" rel="noopener noreferrer" target="_blank">Ready Player One</a> by Ernest Cline</li> <li> <a href="https://www.amazon.com/Star-Force-12-Book/dp/B01A0UMJP8/ref=sr_1_20?s=digital-text&amp;ie=UTF8&amp;qid=1534449817&amp;sr=1-20&amp;keywords=Star+Force+by+BV+Larson" rel="noopener noreferrer" target="_blank">Star Force (Book Series)</a> by BV Larson</li> <li> <a href="https://www.amazon.com/Art-Racing-Rain-Novel-ebook/dp/B0017SWPXY/ref=sr_1_fkmr2_1?s=digital-text&amp;ie=UTF8&amp;qid=1534450129&amp;sr=1-1-fkmr2&amp;keywords=The+art+of+racing+in+the+rain+%28if+you+love+dogs+and+car+racing%29" rel="noopener noreferrer" target="_blank">The Art of Racing in the Rain: A Novel</a> by Garth Stein</li> <li> <a href="https://www.amazon.com/Martian-Novel-Andy-Weir-ebook/dp/B00EMXBDMA/ref=sr_1_1?s=digital-text&amp;ie=UTF8&amp;qid=1534449697&amp;sr=1-1&amp;keywords=The+Martian" rel="noopener noreferrer" target="_blank">The Martian</a> by Andy Weir</li> <li> <a href="https://www.amazon.com/Utterly-Uninteresting-Unadventurous-Vampire-Accountant-ebook/dp/B00M6AM6Q8/ref=sr_1_1?s=digital-text&amp;ie=UTF8&amp;qid=1534450104&amp;sr=1-1&amp;keywords=The+Utterly+Uninteresting+and+Unadventurous+Tales+of+Fred%2C+the+Vampire+Accountant" rel="noopener noreferrer" target="_blank">The Utterly Uninteresting and Unadventurous Tales of Fred, the Vampire Accountant</a> by Drew Hayes</li> <li> <a href="https://www.amazon.com/Bobiverse-3-Book-Series/dp/B073DCB98Y/ref=sr_1_14?s=digital-text&amp;ie=UTF8&amp;qid=1534449976&amp;sr=1-14&amp;keywords=We+are+Legion+%28We+are+Bob%29" rel="noopener noreferrer" target="_blank">We are Legion (We are Bob)</a> by Dennis Taylor</li> </ul> <h3><center><strong>Non-Fiction</strong></center></h3> <ul> <li> <a href="https://www.amazon.com/Short-History-Nearly-Everything-ebook/dp/B000FBFNII/ref=sr_1_1?s=digital-text&amp;ie=UTF8&amp;qid=1534444183&amp;sr=1-1&amp;keywords=A+Short+History+of+Nearly+Everything+by+Bill+Bryson" rel="noopener noreferrer" target="_blank">A Short History of Nearly Everything </a>by Bill Bryson</li> <li> <a href="https://www.amazon.com/Alexander-Hamilton-Ron-Chernow-ebook/dp/B000QJLQZI/ref=sr_1_2?s=digital-text&amp;ie=UTF8&amp;qid=1534444078&amp;sr=1-2&amp;keywords=Alexander+Hamilton+by+Ron+Chernow" rel="noopener noreferrer" target="_blank">Alexander Hamilton</a> by Ron Chernow</li> <li> <a href="https://www.amazon.com/Americana-400-Year-History-American-Capitalism-ebook/dp/B01N5X436J/ref=sr_1_1?s=digital-text&amp;ie=UTF8&amp;qid=1534444215&amp;sr=1-1&amp;keywords=Americana%3A+A+400-Year+History+of+American+Capitalism" rel="noopener noreferrer" target="_blank">Americana: A 400-Year History of American Capitalism</a> by Bhu Srinivasan</li> <li> <a href="https://www.amazon.com/Elon-Musk-SpaceX-Fantastic-Future-ebook/dp/B00KVI76ZS/ref=sr_1_1?s=digital-text&amp;ie=UTF8&amp;qid=1534449528&amp;sr=1-1&amp;keywords=Elon+Musk+by+Ashlee+Vance" rel="noopener noreferrer" target="_blank">Elon Musk</a> by Ashlee Vance</li> <li> <a href="https://www.amazon.com/How-Live-Montaigne-Question-Attempts-ebook/dp/B003E8AK4Q" rel="noopener noreferrer" target="_blank">How to live: a life of Montaigne</a> by Sarah Bakewell</li> <li> <a href="https://www.amazon.com/Into-Thin-Air-Jon-Krakauer-ebook/dp/B000FC1ITK/ref=sr_1_1?s=digital-text&amp;ie=UTF8&amp;qid=1534443837&amp;sr=1-1&amp;keywords=into+thin+air+by+jon+krakauer" rel="noopener noreferrer" target="_blank">Into Thin Air</a> by Jon Krakauer</li> <li> <a href="https://www.amazon.com/Letters-Young-Contrarian-Christopher-Hitchens-ebook/dp/B06XC9JFB6/ref=tmm_kin_swatch_0?_encoding=UTF8&amp;qid=1534444129&amp;sr=1-1" rel="noopener noreferrer" target="_blank">Letters to a Young Contrarian</a> by Christopher Hitchens</li> <li> <a href="https://www.amazon.com/Modern-Romance-Aziz-Ansari-ebook/dp/B00OZ0TMYG/ref=sr_1_1?s=digital-text&amp;ie=UTF8&amp;qid=1534443784&amp;sr=1-1&amp;keywords=Modern+Romance" rel="noopener noreferrer" target="_blank">Modern Romance</a> by Aziz Ansari and Eric Klinenberg</li> <li> <a href="https://www.amazon.com/Outliers-Story-Success-Malcolm-Gladwell-ebook/dp/B00FOR2FKW/ref=sr_1_1?s=digital-text&amp;ie=UTF8&amp;qid=1534447996&amp;sr=1-1&amp;keywords=Outliers%3A+The+Story+of+Success+Kindle+Edition" rel="noopener noreferrer" target="_blank">Outliers</a> by Malcolm Gladwell</li> <li> <a href="https://www.amazon.com/Sapiens-Humankind-Yuval-Noah-Harari-ebook/dp/B00ICN066A/ref=sr_1_1?s=digital-text&amp;ie=UTF8&amp;qid=1534443736&amp;sr=1-1&amp;keywords=Sapiens" rel="noopener noreferrer" target="_blank">Sapiens</a> by Yuval Noah Harari</li> <li> <a href="https://www.amazon.com/Steve-Jobs-Walter-Isaacson-ebook/dp/B004W2UBYW/ref=sr_1_1?s=digital-text&amp;ie=UTF8&amp;qid=1534448015&amp;sr=1-1&amp;keywords=Steve+Jobs+by+Walter+Isaacson" rel="noopener noreferrer" target="_blank">Steve Jobs</a> by Walter Isaacson</li> <li> <a href="https://www.amazon.com/SuperFreakonomics-Cooling-Patriotic-Prostitutes-Insurance-ebook/dp/B002R2OFGY/ref=sr_1_1?s=digital-text&amp;ie=UTF8&amp;qid=1534447888&amp;sr=1-1&amp;keywords=SuperFreakonomics+by+Levitt+%26+Dubner" rel="noopener noreferrer" target="_blank">SuperFreakonomics</a> by Levitt &amp; Dubner</li> <li> <a href="https://www.amazon.com/Surely-Youre-Joking-Mr-Feynman-ebook/dp/B003V1WXKU/ref=sr_1_1?s=digital-text&amp;ie=UTF8&amp;qid=1534448056&amp;sr=1-1&amp;keywords=Surely+you%E2%80%99re+joking%2C+Mr.+Feynman" rel="noopener noreferrer" target="_blank">Surely you’re joking, Mr. Feynman</a> by Richard P. Feynman and Ralph Leighton</li> <li> <a href="https://www.amazon.com/Big-Short-Inside-Doomsday-Machine-ebook/dp/B003LSTK8G/ref=sr_1_1?s=digital-text&amp;ie=UTF8&amp;qid=1534448308&amp;sr=1-1&amp;keywords=The+Big+Short+by+Michael+Lewis" rel="noopener noreferrer" target="_blank">The Big Short</a> by Michael Lewis</li> <li> <a href="https://www.amazon.com/Black-Swan-Second-Improbable-Incerto-ebook/dp/B00139XTG4/ref=sr_1_1?s=digital-text&amp;ie=UTF8&amp;qid=1534448260&amp;sr=1-1&amp;keywords=The+Black+Swan+by+Nassim+Taleb" rel="noopener noreferrer" target="_blank">The Black Swan</a> by Nassim Taleb</li> <li> <a href="https://www.amazon.com/Greatest-Trade-Ever-Behind-Scenes-ebook/dp/B002UBRFFU/ref=sr_1_1?s=digital-text&amp;ie=UTF8&amp;qid=1534448368&amp;sr=1-1&amp;keywords=The+Greatest+Trade+Ever+by+Gregory+Zuckerman" rel="noopener noreferrer" target="_blank">The Greatest Trade</a> Ever by Gregory Zuckerman</li> <li> <a href="https://www.amazon.com/Subtle-Art-Not-Giving-Counterintuitive-ebook/dp/B019MMUA8S/ref=sr_1_1?s=digital-text&amp;ie=UTF8&amp;qid=1534442939&amp;sr=1-1&amp;keywords=The+Subtle+Art+of+Not+Giving+a+Fuck" rel="noopener noreferrer" target="_blank">The Subtle Art of Not Giving a Fuck</a> by Mark Manson</li> <li> <a href="https://www.amazon.com/Undercover-Economist-Exposing-Poor-Decent-ebook/dp/B0040JHNR0/ref=sr_1_fkmr0_1?s=digital-text&amp;ie=UTF8&amp;qid=1534448180&amp;sr=1-1-fkmr0&amp;keywords=The+Undercover+Economist%3A+Exposing+Why+the+Rich+Are+Rich%2C+the+Poor+Are+Poor--and+Why+You+Can+Never+Buy+a+Decent+Used+Car%21+by+Tim+Hartford" rel="noopener noreferrer" target="_blank">The Undercover Economist: Exposing Why the Rich Are Rich, the Poor Are Poor&#8211;and Why You Can Never Buy a Decent Used Car!</a> by Tim Hartford</li> <li> <a href="https://www.amazon.com/Upside-Irrationality-Unexpected-Benefits-Defying-ebook/dp/B003JBHVZY/ref=sr_1_1?s=digital-text&amp;ie=UTF8&amp;qid=1534448100&amp;sr=1-1&amp;keywords=The+Upside+of+Irrationality+by+Dan+Ariely" rel="noopener noreferrer" target="_blank">The Upside of Irrationality: The Unexpected Benefits of Defying Logic at Work and at Home</a> by Dan Ariely</li> <li> <a href="https://www.amazon.com/What-If-Scientific-Hypothetical-Questions-ebook/dp/B00IYUYF4A/ref=sr_1_1?s=digital-text&amp;ie=UTF8&amp;qid=1534443707&amp;sr=1-1&amp;keywords=What+if+by+Randall+Munroe" rel="noopener noreferrer" target="_blank">What if</a> by Randall Munroe</li> </ul>

<p>I received numerous requests for book recommendations in the last few weeks. The rise in the mercury clearly &hellip; <a href="https://fabricegrinda.com/summer-book-recommendations/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;Summer Book Recommendations&#8221;</span></a></p>

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Summer Book Recommendations. Categories - Books. Date-Posted - 2018-08-22T17:45:30 . I received numerous requests for book recommendations in the last few weeks. The rise in the mercury clearly correlates with an increase in reading under umbrellas on the beach. Here are a few books I really enjoyed over the last few years. Note that my tastes are far ranging and eclectic and cover everything from sci-fi soap operas to behavioral economics. Beach Reads and Page Turners A Year in Provence by Peter Mayle Bill the Vampire by Rick Gualtieri Circling the Sun by Paula McLain Gone Girl by Gillian Flynn Infinity Born by Douglas E. Richards Last Days of Night by Graham Moore Murder as a Fine Art by David Morrell Old Man’s War by John Scalzi Ready Player One by Ernest Cline Star Force (Book Series) by BV Larson The Art of Racing in the Rain: A Novel by Garth Stein The Martian by Andy Weir The Utterly Uninteresting and Unadventurous Tales of Fred, the Vampire Accountant by Drew Hayes We are Legion (We are Bob) by Dennis Taylor Non-Fiction A Short History of Nearly Everything by Bill Bryson Alexander Hamilton by Ron Chernow Americana: A 400-Year History of American Capitalism by Bhu Srinivasan Elon Musk by Ashlee Vance How to live: a life of Montaigne by Sarah Bakewell Into Thin Air by Jon Krakauer Letters to a Young Contrarian by Christopher Hitchens Modern Romance by Aziz Ansari and Eric Klinenberg Outliers by Malcolm Gladwell Sapiens by Yuval Noah Harari Steve Jobs by Walter Isaacson SuperFreakonomics by Levitt &amp; Dubner Surely you’re joking, Mr. Feynman by Richard P. Feynman and Ralph Leighton The Big Short by Michael Lewis The Black Swan by Nassim Taleb The Greatest Trade Ever by Gregory Zuckerman The Subtle Art of Not Giving a Fuck by Mark Manson The Undercover Economist: Exposing Why the Rich Are Rich, the Poor Are Poor&#8211;and Why You Can Never Buy a Decent Used Car! by Tim Hartford The Upside of Irrationality: The Unexpected Benefits of Defying Logic at Work and at Home by Dan Ariely What if by Randall Munroe

2018-08-09T15:39:13

2018-08-09T15:39:13

https://fabricegrinda.com/?p=9405

2023-11-17T13:35:32

2023-11-17T13:35:32

ode-to-bagheera

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https://fabricegrinda.com/ode-to-bagheera/

Ode to Bagheera

<p>To my great chagrin, my beloved <a href="https://fabricegrinda.com/it-was-bagheeras-world-we-just-lived-in-it/" target="_blank" rel="noopener noreferrer">Bagheera passed away a year ago</a>. I wanted to share this tribute to all the love and happiness she brought to my life.</p> <div id="wppdfemb-frame-container-13678"><iframe id="wppdf-emb-iframe-13678" scrolling="no" data-pdf-index="9" class="pdfembed-iframe nonfullscreen" style="border: none; width:100%; max-width: 100%; min-height: 1000px;" src="https://fabricegrinda.com?pdfID=13678&#038;url=https%3A%2F%2Ffabricegrinda.com%2Fwp-content%2Fuploads%2F2018%2F08%2FpI-love-you-and-miss-you-Bagheera.pdf&#038;index=9" ></iframe></div> <p>I love you and miss you Bagheera!</p>

<p>To my great chagrin, my beloved Bagheera passed away a year ago. I wanted to share this tribute &hellip; <a href="https://fabricegrinda.com/ode-to-bagheera/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;Ode to Bagheera&#8221;</span></a></p>

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Ode to Bagheera. Categories - Featured Posts, The love of dogs, Personal Musings. Date-Posted - 2018-08-09T15:39:13 . To my great chagrin, my beloved Bagheera passed away a year ago. I wanted to share this tribute to all the love and happiness she brought to my life. I love you and miss you Bagheera!

2018-08-06T14:40:04

2018-08-06T14:40:04

https://fabricegrinda.com/?p=9415

2021-05-28T07:09:41

2021-05-28T07:09:41

forbes-just-named-me-the-1-angel-investor-in-the-world

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https://fabricegrinda.com/forbes-just-named-me-the-1-angel-investor-in-the-world/

Forbes just named me the #1 angel investor in the world :)

<p>They counted publicly recorded investments and exits to make their ranking. Admittedly they are not<br /> the best metrics. Number of investments only shows how prolific I am, not how good an investor I am.<br /> Likewise many of those exits might be unsuccessful. That said, actual performance is hard to figure out<br /> from Crunchbase and Angelist data, so this is a reasonable proxy. Besides if you are an entrepreneur<br /> looking for money, you probably want to approach a prolific investor 🙂</p> <p>This is giving me an incentive to keep my Crunchbase and Angelist profiles up to date because the data<br /> they have is completely out of date. I have now made around 400 investments, with 150 exits. Of those<br /> 150 exits, I made money on around half and my realized IRR (on actual cash on cash exits) is 67%<br /> (including all the investments on which I lost money).</p> <p>It’s good to be the king! Now if only my ego and I could still fit in the same room 🙂</p> <p>You can read the article at:<br /> <a href="https://www.forbes.com/sites/alejandrocremades/2018/08/05/top-50-angel-investors-based-on-investment-volume-and-successful-exits/#72fc2dca7748" rel="noopener" target="_blank">https://www.forbes.com/sites/alejandrocremades/2018/08/05/top-50-angel-investors-based-on-investment-volume-and-successful-exits/#72fc2dca7748</a></p>

<p>They counted publicly recorded investments and exits to make their ranking. Admittedly they are not the best metrics. &hellip; <a href="https://fabricegrinda.com/forbes-just-named-me-the-1-angel-investor-in-the-world/" class="more-link">Continue reading<span class="screen-reader-text"> &#8220;Forbes just named me the #1 angel investor in the world :)&#8221;</span></a></p>

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Forbes just named me the #1 angel investor in the world :). Categories - Entrepreneurship. Date-Posted - 2018-08-06T14:40:04 . They counted publicly recorded investments and exits to make their ranking. Admittedly they are not the best metrics. Number of investments only shows how prolific I am, not how good an investor I am. Likewise many of those exits might be unsuccessful. That said, actual performance is hard to figure out from Crunchbase and Angelist data, so this is a reasonable proxy. Besides if you are an entrepreneur looking for money, you probably want to approach a prolific investor 🙂 This is giving me an incentive to keep my Crunchbase and Angelist profiles up to date because the data they have is completely out of date. I have now made around 400 investments, with 150 exits. Of those 150 exits, I made money on around half and my realized IRR (on actual cash on cash exits) is 67% (including all the investments on which I lost money). It’s good to be the king! Now if only my ego and I could still fit in the same room 🙂 You can read the article at: https://www.forbes.com/sites/alejandrocremades/2018/08/05/top-50-angel-investors-based-on-investment-volume-and-successful-exits/#72fc2dca7748