4 ms·

Article leads with a photo captioned "Garry Tan and Alexis Ohanian are looking to a build a VC firm for 'the next 100 years.'" The closest the story comes to e

by dxhdr 8y ago

Article leads with a photo captioned "Garry Tan and Alexis Ohanian are looking to a build a VC firm for 'the next 100 years.'" The closest the story comes to expounding on this that the firm has their own CRM software and that they "value doing our own research." A succinct summary of the article may be the paragraph leading "Like most VCs, Initialized says it isn't like the other VCs."

rdlecler1 8y ago
The irony about VC is that they don’t invest in lifestyle business (except their own). Building your own CRM isn’t really rocket science. We’ve built automation and AI into our deal flow and company tracking and a bespoke search engine to help with competitive market analysis. Want to be different? Run a VC firm like a startup: build proprietary technology to outcompete incumbents and scale in a way not possible without technology. It does’t even sound like they have a FT engineer.... Imagine investing in a startup that didn’t have a FT engineer! But that’s exactly what they (and most VCs) are asking of their Limited Partners! Sounds like a puffy and carefully managed PR piece with a complicit journalist to prime the raise of their next fund without triggering a Reg D 506c registration.. They may have great returns, smarter than most, and have higher conviction, but it’s pretty much same old same old of catching the wave of good deal flow from your celebrity network. Nothing innovative here.
- garry 8y ago
  Actually I am an engineer, as is Vince and Brett in our partnership. Brett and I implemented much of the software that runs YC today including the application process and the internal social network.
  - tixocloud 8y ago
    From the article, it mentions Matthew coming through a cold pitch but then later on it also states that he went through a referral process to get to the cold pitch. Are you guys doing anything to vet startups minus the referrals?
  - rdlecler1 8y ago
    Lot’s of VC partners are engineers. I’m specifically talking about the commitment to building technology in house as a core part of the business —- like Social Capital —- not a side project. You guys have celebrity brand and a great insider network so you’re already ahead but it’s likely not sufficient if you want to build a firm for the next 100 years.
- tixocloud 8y ago
  How often do VC firms develop their own tech to drive research? Just curious what the split might be between firms that follow the lead of others vs firms that due their own research.
  - kn0thing 8y ago
    I would love to know this, but also how often VC firms build their own tech to improve their daily processes and workflow, as well as develop their community of founders.
    - rdlecler1 8y ago
      Building their own tech is very rare.
      - tixocloud 8y ago
        That's what I would imagine. Doesn't seem to be a good investment to build their own tech unless it's research focused.
        rdlecler1 8y ago
        Why? I think the real issue is that historically small VCs don’t make enough in management fees to support engineers, no one wants to sell part of the GP to invest in growth and scale, and large VCs make so much money from management fee and carry that they don’t care about the complexity. I’d be surprised if a16z didn’t have a few engineers in staff, but I know several of the big firms definetly don’t. It’s going to take a new commer stealing away their LPs to get them to change.
        tixocloud 8y ago
        Could you enlighten me on your thoughts on what the engineers at a16z would do if not for focusing on getting better insight to vet deals? Agreed on what you said, change doesn't come unless there's a burning bridge. If the firms have a current process that gets them to where they are today, they will just keep doing what they are already doing. Perhaps a business opportunity to target the small VCs to help give them an edge.
- seanhunter 8y ago
  Not every startup needs engineers. Not every valuable business has an engineering problem at it's heart. VC is fundamentally about capital allocation - funds don't necessarily need scalable or innovative internal tech to do a really great job at this. I know a fund of 6 people with no particular tech skills who are killing it because they're really smart investors. There's a huge bias in the Valley (and obviously on here) towards hiring rockstar engineers and then trying to figure out problems to point them at. Isn't it way better to actually figure out a valuable problem first, and then hire the right mix of people (including engineers, but all the other skills also) to solve that problem? Just in case you think I'm anti-engineer: I have been a software engineer my whole working life. My father is a chemical engineer and his father was a mechanical engineer. I love engineers, but sheesh - not everyone has to be an engineer, and not all value is created by engineers.
  - rdlecler1 8y ago
    Walmart must have thought the same thing. Then along came Amazon. In a decade every company will need to be a tech company.
thrav 8y ago
I can’t help but wonder what it is about tech people that makes them so eager to expend their precious mental cycles reinventing the CRM wheel. Anything custom you could ever want to do in a CRM can be done on Salesforce’s platform with a fraction of the effort. Facebook, Amazon, and Google all use it to power various aspects of their back end, and yet start up culture folks continue to turn their nose up at it, while begrudgingly paying for their sales team’s licenses. What’s up with that? Why does this community seem to hate the company that built a great product that everybody needs and established SaaS as a thing?
- nojvek 8y ago
  Salesforce is really an overpriced, over complicated, awful UX and full of quirks kind of software. Anyone with any decent taste in software would probably write their own or use something else.
  - thrav 8y ago
    Out of curiosity, when was the last time you used it, and who owned the environment? It can certainly be that with the wrong person in charge of it. The problem is the expectation that it’s going to function like one trick consumer tech tools out of the box. To see the value, each company must make it their own. They should be creating the UX themselves, and a different one for every type of user according to their role. People say the same thing about every piece of business software they’ve never invested time to truly understand. Salesforce gives you the Model and the View, some basic Controls and the ability to customize all 3 with both clicks and code + APIs. Sales Cloud is an app built on it. Salesforce is a PaaS.
beagle3 8y ago
Reminds me of AlephVC[0] who did something quite similar. From rumours, it is quiet helpful to them and definitely a competitive advantage in the VC world. [0] https://aleph.vc/meet-ampliphy-our-aleph-operating-system https://aleph.vc/meet-ampliphy-our-aleph-operating-system

by dxhdr 8y ago

rdlecler1 8y ago

The irony about VC is that they don’t invest in lifestyle business (except their own). Building your own CRM isn’t really rocket science. We’ve built automation and AI into our deal flow and company tracking and a bespoke search engine to help with competitive market analysis. Want to be different? Run a VC firm like a startup: build proprietary technology to outcompete incumbents and scale in a way not possible without technology. It does’t even sound like they have a FT engineer.... Imagine investing in a startup that didn’t have a FT engineer! But that’s exactly what they (and most VCs) are asking of their Limited Partners! Sounds like a puffy and carefully managed PR piece with a complicit journalist to prime the raise of their next fund without triggering a Reg D 506c registration.. They may have great returns, smarter than most, and have higher conviction, but it’s pretty much same old same old of catching the wave of good deal flow from your celebrity network. Nothing innovative here.

garry 8y ago
Actually I am an engineer, as is Vince and Brett in our partnership. Brett and I implemented much of the software that runs YC today including the application process and the internal social network.
- tixocloud 8y ago
  From the article, it mentions Matthew coming through a cold pitch but then later on it also states that he went through a referral process to get to the cold pitch. Are you guys doing anything to vet startups minus the referrals?
- rdlecler1 8y ago
  Lot’s of VC partners are engineers. I’m specifically talking about the commitment to building technology in house as a core part of the business —- like Social Capital —- not a side project. You guys have celebrity brand and a great insider network so you’re already ahead but it’s likely not sufficient if you want to build a firm for the next 100 years.
tixocloud 8y ago
How often do VC firms develop their own tech to drive research? Just curious what the split might be between firms that follow the lead of others vs firms that due their own research.
- kn0thing 8y ago
  I would love to know this, but also how often VC firms build their own tech to improve their daily processes and workflow, as well as develop their community of founders.
  - rdlecler1 8y ago
    Building their own tech is very rare.
    - tixocloud 8y ago
      That's what I would imagine. Doesn't seem to be a good investment to build their own tech unless it's research focused.
      - rdlecler1 8y ago
        Why? I think the real issue is that historically small VCs don’t make enough in management fees to support engineers, no one wants to sell part of the GP to invest in growth and scale, and large VCs make so much money from management fee and carry that they don’t care about the complexity. I’d be surprised if a16z didn’t have a few engineers in staff, but I know several of the big firms definetly don’t. It’s going to take a new commer stealing away their LPs to get them to change.
        tixocloud 8y ago
        Could you enlighten me on your thoughts on what the engineers at a16z would do if not for focusing on getting better insight to vet deals? Agreed on what you said, change doesn't come unless there's a burning bridge. If the firms have a current process that gets them to where they are today, they will just keep doing what they are already doing. Perhaps a business opportunity to target the small VCs to help give them an edge.
seanhunter 8y ago
Not every startup needs engineers. Not every valuable business has an engineering problem at it's heart. VC is fundamentally about capital allocation - funds don't necessarily need scalable or innovative internal tech to do a really great job at this. I know a fund of 6 people with no particular tech skills who are killing it because they're really smart investors. There's a huge bias in the Valley (and obviously on here) towards hiring rockstar engineers and then trying to figure out problems to point them at. Isn't it way better to actually figure out a valuable problem first, and then hire the right mix of people (including engineers, but all the other skills also) to solve that problem? Just in case you think I'm anti-engineer: I have been a software engineer my whole working life. My father is a chemical engineer and his father was a mechanical engineer. I love engineers, but sheesh - not everyone has to be an engineer, and not all value is created by engineers.
- rdlecler1 8y ago
  Walmart must have thought the same thing. Then along came Amazon. In a decade every company will need to be a tech company.

thrav 8y ago

I can’t help but wonder what it is about tech people that makes them so eager to expend their precious mental cycles reinventing the CRM wheel. Anything custom you could ever want to do in a CRM can be done on Salesforce’s platform with a fraction of the effort. Facebook, Amazon, and Google all use it to power various aspects of their back end, and yet start up culture folks continue to turn their nose up at it, while begrudgingly paying for their sales team’s licenses. What’s up with that? Why does this community seem to hate the company that built a great product that everybody needs and established SaaS as a thing?

nojvek 8y ago
Salesforce is really an overpriced, over complicated, awful UX and full of quirks kind of software. Anyone with any decent taste in software would probably write their own or use something else.
- thrav 8y ago
  Out of curiosity, when was the last time you used it, and who owned the environment? It can certainly be that with the wrong person in charge of it. The problem is the expectation that it’s going to function like one trick consumer tech tools out of the box. To see the value, each company must make it their own. They should be creating the UX themselves, and a different one for every type of user according to their role. People say the same thing about every piece of business software they’ve never invested time to truly understand. Salesforce gives you the Model and the View, some basic Controls and the ability to customize all 3 with both clicks and code + APIs. Sales Cloud is an app built on it. Salesforce is a PaaS.

beagle3 8y ago

Reminds me of AlephVC[0] who did something quite similar. From rumours, it is quiet helpful to them and definitely a competitive advantage in the VC world. [0] https://aleph.vc/meet-ampliphy-our-aleph-operating-system https://aleph.vc/meet-ampliphy-our-aleph-operating-system