In episode 57 of the 20 minutes VC, host Harry Stebbings interviews Nicholas Whittenborn, a venture capitalist at .9 Capital. Nicholas shares his journey into the VC world, starting with his early tech enthusiasm and an entrepreneurial stint importing iPhones. He discusses the investor checklist, emphasizing the importance of market size, product engagement, and team composition in evaluating startups. Nicholas also talks about the significance of having a working product at seed stage and the potential of emerging business models. Additionally, he highlights the importance of passion for entrepreneurs and reveals his latest investment in Green Blender, a smoothie subscription service. Throughout, Nicholas provides insights into what .9 Capital looks for in startups, from technical prowess to the ability to return the fund.
"And on today's show, I'm so excited to welcome Nicholas Whittenborn. Nicholas is a VC at .9 Capital, one of the leading seed funds in Europe, and prior to zero nine, Nicholas was an analyst at Team Europe."
The quote introduces Nicholas Whittenborn and his credentials as a venture capitalist at Point Nine Capital and his experience at Team Europe, setting the stage for the podcast's focus on venture capital insights.
"And for me personally, I'm probably particularly lucky in how I ended up in VC."
This quote reflects Nicholas's acknowledgment of the fortunate circumstances that led to his career in venture capital, emphasizing the serendipity often involved in entering the field.
"So I started doing this in a bigger scale, I guess, which is kind of a gray zone. But it actually taught me that it's relatively easy to make these things happen."
Nicholas's quote highlights his early entrepreneurial spirit and willingness to explore opportunities that existed in a legal gray area, showcasing his proactive approach to business.
"And one day I just happened to read about these guys called Team Europe, which were one of the original company builders and kind of pioneers of the Berlin tech scene."
The quote captures the moment of inspiration for Nicholas to pursue a career in the tech industry, influenced by the pioneers of the Berlin tech scene.
"So they just never got back to me."
This quote conveys the initial disappointment Nicholas faced when attempting to break into the venture capital industry, highlighting the challenges of entering such a competitive field.
"So I was just like, fuck it, I'm just going to do it. And I said no to the consulting offer. I went into Team Europe... And then eventually the partner that was managing that seed fund actually joined forces with Chris of Jans... and they started .9 capital."
The quote explains Nicholas's decision to pursue a career in venture capital by joining Team Europe and later .9 capital, highlighting a pivotal career choice that led him away from consulting.
"And for us, what we aim for when we do an investment is trying to get to an outcome that at least returns the fund once."
The quote outlines the investment goal of .9 capital, which is to achieve returns that can at least equal the total value of the fund through strategic investments.
"So I think the key here, at least this is my current thinking, is the combination of two things, and that's one, it's having proxies... and I think the other, maybe even more important part here... is just looking at other numeric signals that tell you that this is something that people really love to use."
This quote reflects Nicholas's methodology for evaluating the potential of new business models that lack a pre-existing market, focusing on indirect indicators and user engagement metrics.
"And I guess ideally what we look for is kind of a complementary team where you have a technical founder, you have a business guy, maybe a design leader, or just a visionary that can tell a story and set a strategy and fundraise at the end of the day."
The quote highlights Nicholas's ideal founding team structure, which includes a mix of technical, business, and visionary skills, although flexibility remains in their evaluation process.
"It's super important to have great product people and great technical people, right. Because at the end of the day it's about really differentiating with the solution that you're creating and then distributing that."
This quote emphasizes the critical role of product and technical teams in developing and maintaining a competitive edge for SaaS companies through innovation and solution differentiation.
"So we do typically only invest when there's a first product. That doesn't mean that the product has to be perfect, right."
This quote clarifies that .9 Capital is willing to invest in early-stage products that are not yet perfect, indicating a focus on potential and growth rather than immediate perfection.
"And it's just beautiful. Right. If you sit people on something like this versus a Google survey or maybe, and I'm burning the competition a bit here, a survey man cave form or something like that. It's just a huge difference, right."
This quote highlights the importance of user experience and aesthetic appeal in a product's ability to stand out from the competition, which can be a deciding factor for investment.
"So there has to be some growth and we like to see some kind of heavy engagement."
This quote explains that after investment, .9 Capital prioritizes evidence of product growth and user engagement as indicators of potential long-term success.
"But on a high level, I like to think about, and this is something that is honestly very tough to fix once a product is out..."
Although the quote is not complete, it points to the difficulty of addressing organic growth post-launch, emphasizing the importance of incorporating growth strategies into the product from the onset.
"Is that you think about how you can empower the customer to actually be awesome or just be a better version of himself. This would at least, or the least effort possible."
This quote emphasizes the goal of creating an app that enhances the user's capabilities or self-perception with ease, leading to a satisfying experience they would likely share with others.
"But then it gets to a point where you wonder how much ambition is great and what does it do to a person."
The quote reflects on the theme of the book, which questions the extent to which ambition can be beneficial before it becomes detrimental to an individual's well-being.
"Berlin vibrant."
The brevity of the response suggests a positive and energetic tech scene in Berlin without going into detail.
"So I think it's very important, especially when you think about starting your own company, to focus on something that you're really passionate about."
This advice stresses the importance of aligning one's entrepreneurial efforts with their passions to ensure sustained motivation and enjoyment.
"And then there's two other ones that I really like. One is by Claire Mauryon, who's doing an amazing SaaS newsletter. And then one more. And I really love this one because I think it's one of the few ones that really focus on mobile and is really good is Benedict Evans newsletter of Andreessen Horowitz."
The quote highlights two newsletters that Nicholas finds valuable, one for its focus on SaaS and the other for its mobile industry insights.
"It's a New York based company called Green Blender. And what they do actually is a smoothie as a service subscription play, which sounds maybe a little bit niche, right? Or funny at the beginning, but when you think about it as an entrance to kind of a subscription for a healthy nutrition, which is, I think, a huge trend at the moment. This can really be big."
Nicholas explains his recent investment in Green Blender, a company that aligns with the current trend towards healthy living and has demonstrated promising early-stage business metrics.
"Their blink algorithm meant I spent so little time looking at tons of irrelevant cvs and allowed me to meet the most relevant candidates for the job and really allowed me to choose the right person to join my team."
Harry expresses gratitude to Hiring Screen for their algorithm, which has significantly optimized the hiring process, allowing him to find the right team member.