Dear Reader,
Welcome to the 52nd edition of the good reads newsletter by Malpani Ventures. Sharing your weekly dose of articles for this weekend’s reading!
Seed-Stage Repeatability: Simplify GTM by Focusing on Who and What Work
https://underscore.vc/startupsecrets/seed-stage-repeatability/
Key points:
The optionality trap: The problem with trying to serve multiple ICPs with multiple sales approaches
Repeatability is the foundation for scale: How to generate sales conversations, convert those sales conversations and generate happy customers by following a standard playbook
Leaning into who works: Identify and lean into your Hell Yes customers
Leaning into what works: Design your sales outreach to find nearly identical customers and sell what they want to buy
The post ends with a worksheet to help founders design around who and what work. Give it a spin!
Letter #72: Don Valentine (2000) - Real VCs help build great companies
Don founded Sequoia Capital in 1972 and helped grow it into one of the most legendary investment firms in the world. Feared & revered by the likes of Charlie Munger who said “The best venture capital operation probably in the whole world is Sequoia’s and they are very good at this early stage investing. And I would hate to compete with Sequoia in their field. I think they’d run rings around me.”
Don said in his essay:
On the bubble - was true in 2000, is true in 2023
The Internet hysteria of the late 1990s made venture capital look easy. Anyone and everyone with a sizable checkbook has been throwing money at even the most half-baked ideas. Getting in on the feeding frenzy has become the goal and somewhere along the line we lost sight of why venture capitalists exist-to build long-lasting companies and industries.
First, let's look at the late '90s or, more specifically, 1995, when the Internet gold rush began in earnest. The power of the Internet changed the business landscape. First movers, armed with reasonable business plans, passion and commitment were able to attract VC financing. Problems began when a half-dozen copycats sprung up in every category. First they got the money, then they tried to piece together a business plan, believing that e-commerce could overcome a lack of business sense.
On the sudden wave of new age VCs
And, there are hundreds of so-called "new era venture capitalists" who claim business on the Web is all about market share or eyeballs or some other hallucination in order to "put money to work." Their orientation is to create a "great investment," not a great company or a new industry. There's a better name for these investors: I call them "day-trader VCs." For this group, the Internet is nothing more than a modern day gold rush.
What VC was meant to do
…venture capital will continue to be what it always has been: A company's builder's game. And real venture capitalists will still work to identify technology applications with monster markets that provide opportunities to build major companies for the benefit of the founders, employees and public shareholders.
Learnings from 3 years of running a startup studio by Greg Isenberg
https://twitter.com/gregisenberg/status/1644380847108157440?t=d6zDicFPuufjKvQKkJkqgQ&s=08
Greg has been running a successful product studio for 3 years without raising venture capital and has generated 8 figures of revenue, turned down a big acquisition offer, and acquired a company.
The secret sauce to his success includes building MVPs that cost $500 or less, focusing on indie, super-niche products, using email/SMS/community rituals to keep customers engaged, and building multiple products per audience.
He recommends using AI to find underserved niches, pre-selling products to fund operations, and investing in brand and design. He also suggests starting with a community before building a product, keeping teams small and global, and creating a manifesto for each startup.