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Moneyball for tech startups - SplatF

Stashed in: Moneyball, @bhorowitz, @fredwilson, @cdixon, Awesome, @paulg, Blink, @davemcclure

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To us, the ideal founding team is one supremely talented product oriented founder and one, two, or three strong developers, and nothing else. The supremely talented product oriented founder should have been obsessed about a product area/idea for a long period of time and just has to build something to satisfy their passion/curiosity. That’s about it. Joshua Schachter/Delicious, Jack Dorsey/Twitter, Dennis Crowley/Foursquare are the iconic examples of this kind of person in our portfolio.”


The book is called Blink, by Malcolm Gladwell. Seems like is much more relevant than Michael Lewis's Moneyball, here.

You're right, this is more Blink than Moneyball.

What's fascinating about the three white guys Fred Wilson mentions above is that:

1. Joshua Schacter's experiments with Tasty Labs demonstrate that past is not a predictor of future success.

2. It's easy to say Jack Dorsey now but NO ONE wanted to fund him when he was kicked out of Twitter (including Fred!) AND Twitter itself had the very talented Ev-Biz-Goldman team, not just Jack, who needed to be booted from Twitter in 2007 to ensure its survival.

3. Dennis Crowley's Foursquare is a nice experiment whose commercial potential has not been realized. Not in the slightest. Most of my friends who used Foursquare in 2009 or 2010 have stopped. Not a good sign.

It's also funny that Fred doesn't mention his greatest success: Mark Pincus / Zynga.

Wow, does Fred Wilson fund ANY female founders at all? Not seeing any:

Fred's gut hasn't told him to invest in female founders yet ;).

The golden rule: he who has the gold, rules. Or in this case, when you have the gold, you get to re-write history as you wish.x

Fred's gut needs to become more female friendly.

When I have gold, I will rewrite that rule.

I like that Paul Graham says he just goes with his gut instincts.

Also, remember that Ben Horowitz is the guy who didn't fund Instagram and Square after they were succeeding:

No one gets it right all the time. There is no Moneyball for startups.

I like this blog post because it seems they are more honest about why or why they don't invest in startups.

David, that's a good point. Their honesty is refreshing.

My take on the Moneyball analogy is more along the lines of big bets versus small bets. I haven't read the book but in the movie, the filmmakers underscore that Billy Beane was looking for base hits, not home runs. VC's have backed themselves into a corner where they only place big bets — therefore they can only place big bets because they need those home runs (if not grand slams) to cover their losses and bring their funds to profitability. But by taking the approach used by 500 Startups and YC of placing many smaller bets, you only need a few base hits before your fund is profitable.

Speaking of 500, here's a Dave McClure post written exactly two years ago: Moneyball for Startups.

McClure declares "I was Billy Beane."

YCombinator on the ther hand is NOT looking for base hits. They want the next Dropbox or Airbnb.

Fred Wilson believes in pattern matching but not number crunching.

It's worth reading 17 hard hitting quotes from Moneyball.

See also this PandaWhale Convo a year ago: Moneyball: Relevant to Startups?

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