20VC Felicis' Wesley Chan on The Rise of IoT, Getting Recruited by Larry Page & Creating Google's Biggest Success Disaster

Abstract
Summary Notes

Abstract

In this episode of the 20 Minutes VC, host Harry Stebbings interviews Wesley Chan, Managing Director at Felicis Ventures, exploring his transition from a successful career at Google, where he founded Google Analytics and Google Voice, to the venture capital world. Wesley details his philosophy of democratizing technology, as demonstrated by his investments in companies like Canva, which simplifies design for the masses, and his approach to creating durable, impactful products. He also discusses the importance of founders who prioritize simplicity and user delight, citing the Ring doorbell as an example. Wesley's insights offer a glimpse into the mindset of a VC who values contrarian thinking, broad market potential, and the efficient use of time to drive innovation and success in the tech industry.

Summary Notes

Introduction to the Episode and Guest

  • Harry Stebbings hosts the 20 Minutes VC podcast.
  • Wesley Chan is the featured guest, known for his smart investments and tech background.
  • Wesley's partner at Felicis Ventures, Iden, has previously appeared on the show.
  • Wesley is celebrated for founding Google Analytics and Google Voice.
  • He is also recognized for his interest in hacking and IoT, with over 100 connected devices at home.

"So joining me today is Wesley Chan, managing director of Felicis Ventures, where he led their investments in the likes of of Canva, Flexport and Luma, just to name a few."

This quote introduces Wesley Chan and highlights his role and successful investments at Felicis Ventures, setting the stage for his expertise in the venture capital industry.

Harry Stebbings' Introduction

  • Harry Stebbings promotes Lisa mattresses, emphasizing the benefits of good sleep.
  • He mentions the VC Unlocked program for those interested in venture capital.

"And if you enter the promo code vc 75 at checkout you'll get a fantastic $75 off and they also give 100 nights to trial the mattress so you can really ensure that it's perfect for you."

This quote is part of the promotional message for Lisa mattresses, showcasing the benefits and offers available to the listeners.

Wesley's Transition from Google to Venture Capital

  • Wesley had a successful 13-year tenure at Google, contributing to early ad systems and founding Google Analytics and Google Voice.
  • He was awarded Google's Founders award for his significant contributions.
  • After Google, he became an early partner at Google Ventures, helping it grow into a significant fund.
  • Wesley took a year off to explore and built a smart home, meeting people in the IoT space.

"No one knew what venture was at Google, and no one really understood why even Google would have a venture fund. And today they've done over 300 investments and it's grown to be a 500 million dollar year fund."

This quote explains Wesley's role in establishing Google Ventures and its growth, highlighting his pioneering work in Google's venture capital efforts.

Wesley's Smart Home Project

  • Wesley's interest in IoT led him to build a smart home as a living laboratory.
  • He integrated various connected devices to test their interoperability.
  • The project connected him with innovators in home technology.

"And sort of built this living laboratory, sort of like the MIT media lab or something else, where you could test all these new things together."

Wesley describes his smart home as a living laboratory, similar to MIT's Media Lab, which underscores his passion for technology and hands-on experimentation.

Joining Felicis Ventures

  • Wesley was approached by Iden Senkut, founder of Felicis Ventures, to join the firm.
  • Iden's persistence and the encouragement from CEOs in Iden's network convinced Wesley to make the move.
  • Wesley values learning from others and contributing his experience to Felicis Ventures.

"Wesley, you've spent a great time at Google. You've spent a lot of time really learning how to build great products. Some of your products have become billion dollar businesses that you started. Why don't you come join me again and sort of help sort of bring your vision of smart home, of smart Internet, of smart devices, products that people build to Felicis."

This quote from Iden Senkut invites Wesley to Felicis Ventures, highlighting Wesley's achievements and the potential impact he could have at Felicis.

Wesley's Takeaways from Google and Venture Capital

  • Wesley emphasizes the importance of embracing change and discomfort.
  • He recalls challenges faced while developing Google Analytics, including skepticism from colleagues.

"My takeaway, spending my time at Google was really just doing something different every three years, right. If you look at my history at Google, I always moved on to something completely different every three years."

This quote reflects Wesley's philosophy of seeking new challenges and the personal growth that comes from regularly stepping out of one's comfort zone.

Wesley Chan's Journey at Google

  • Wesley Chan felt his project at Google didn't fit within the typical product suite.
  • He had to find a team in San Diego called Urchin Software to work on analytics.
  • After three years of development, Google Analytics became successful.
  • Post-Google Analytics, he moved on to work on Google Voice.
  • Wesley emphasizes the importance of doing what one wants and creating an impact.
  • He notes that every three years, the world changes, and in venture capital, these changes can be navigated more smoothly than in corporate environments.

"And in fact, no one wanted to work with me because they thought I was crazy. Sort of building this weird product that didn't quite fit in the Google sort of product suite."

This quote highlights the initial skepticism and challenges Wesley faced within Google when starting his project, which later became Google Analytics.

"So the one takeaway from all of this is really venture and technology investing. Things change. It's a lifetime every three years that the world sort of changes again."

Wesley reflects on the rapid pace of change in technology and venture capital, suggesting that one must adapt every few years to stay relevant and impactful.

The Success of Nest and Connected Devices

  • Nest was backed by Google Ventures, where Wesley was present during its early stages.
  • Tony Fadel, known for creating the iPod, introduced Nest as a revolutionary thermostat.
  • The vision for Nest included easy installation, beautiful design, and smart features.
  • Nest aimed to transform the thermostat into a connected device, starting with thermostats and expanding to smoke detectors and a broader ecosystem.
  • Wesley emphasizes the importance of creating devices that are easy to use, delightful, and consumer-friendly.
  • The success of Nest is evidenced by its inclusion in high-end home real estate listings.

"I didn't lead the deal at Google Ventures. One of my partners did. But I was there intimately when we first met Tony Fidel at the TED conference..."

Wesley clarifies his role in the Nest investment, highlighting the initial intrigue and excitement around Tony Fidel's secretive new project.

"Today, nest is sort of the de facto device that you have in your house if you build a high end home, right? They advertise it in the home real estate listings, that they have a nest thermostat in it."

This quote demonstrates the impact and widespread acceptance of Nest as a standard feature in high-end homes, signifying its success and desirability.

Democratization of Technology

  • Wesley Chan describes the democratization of technology as making complex tools accessible to everyone.
  • Google Analytics was designed to be user-friendly and easy to install, contrasting with complicated tools like Omniture.
  • Canva, another investment, follows a similar pattern by making design accessible to those without extensive training.
  • Wesley believes in empowering the average user, which has led to successful outcomes for both Google Analytics and Canva.

"The key takeaway there on Google Analytics is that there's a certain thing that I call the democratization of technology."

Wesley introduces the concept of democratizing technology, which involves simplifying complex tools for widespread use.

"Where do I sign the check? And I think that sort of proved itself."

The quote captures Wesley's enthusiasm and conviction in the potential of Canva's approach to democratize design, leading to his investment decision.

Target Market Considerations

  • Wesley discusses the challenge of targeting a broad market versus focusing on specific segments.
  • The traditional view in marketing is to hone in on niches, but democratizing technology aims to serve a wider audience.
  • The discussion is left incomplete, as the transcript cuts off before Wesley can fully address the inherent difficulties of targeting everyone.

(Note: The last key theme is incomplete due to the truncated transcript.)

Broad Market Tailoring

  • The conversation highlights the challenge and benefits of tailoring a product for a broad market.
  • A broad market approach can significantly increase the potential user base.
  • There's a comparison between niche tools for professionals and universal tools for the general public.
  • The discussion includes references to Google Analytics and Canva as examples of products designed for a broad audience.

"And we built Google Analytics for anybody that wanted to build a website so they could see what was happening and make great decisions if they were deciding to buy advertising."

This quote underlines the philosophy behind Google Analytics—to create a tool not just for specialists but for anyone interested in understanding website traffic, thus democratizing access to analytics.

"We want to build it for anyone that wants to go build design, because design is something that everybody does, not just the privileged few."

This quote emphasizes the inclusive vision of Canva, aiming to make design tools accessible to all users, not just professional designers.

Market Size Underestimation and Success Disaster

  • Wesley Chan shares a story about underestimating the market size for Google Analytics.
  • The anecdote demonstrates the unforeseen demand when offering a service to a broader audience.
  • The initial server capacity was planned for ten times the existing market size.
  • Google Analytics experienced a rapid and massive uptake, exceeding all expectations and server capacity.

"We had literally crashed Google and we had slowed Google down and sort of broken Google by launching Google Analytics."

This quote illustrates the unexpected server overload caused by the high demand for Google Analytics, which temporarily impacted Google's overall performance.

"This is an indication of you building this massive potential feature success."

The response from Google's leadership, as recounted by Wesley Chan, acknowledges the issue as a sign of a potentially groundbreaking service that needed scaling up drastically to meet demand.

Accessibility and Smart Home Interfaces

  • The conversation shifts to the accessibility of interfaces for programming IoT (Internet of Things) devices.
  • Early IoT devices required professional installation and were not user-friendly.
  • Wesley Chan criticizes the first-generation smart home devices for their lack of consumer accessibility.
  • He praises innovations like the Ring doorbell for its user-installable design and smart features.

"Most of the smart light switch companies that allowed you to sort of put the switches in required you to hire a dealer at $250 an hour to go and install this for you."

This quote criticizes the high cost and complexity of installing early smart home devices, which were not designed with the average consumer in mind.

"He literally took his screwdriver out of his pocket and started screwing his doorbell in the house."

This quote describes the founder of Ring installing an early prototype of the smart doorbell, showcasing the ease of installation that contrasts with the complicated setup of earlier smart home devices.

Smart Home Devices and User Experience

  • Simplicity and ease of installation are key to the success of smart home devices.
  • Jamie Siminoff's doorbell product exemplifies this by offering a straightforward setup process.
  • The product's success is attributed to its no-programming, quick connection to smartphones.
  • The doorbell allows users to interact with visitors remotely, enhancing convenience and security.
  • The approach of removing features rather than adding more can be more effective in product design.
  • This philosophy aligns with Tony Fadell's design of the Nest thermostat.

"I made it simple and easy to install. No programming. It just connects to your iPhone. You can get up and running in two minutes or less."

This quote emphasizes the importance of user-friendly design and the positive impact it has on product adoption and success.

Wesley Chan's Investment Philosophy

  • Wesley Chan appreciates the contrarian approach to investment as detailed in Michael Lewis's book "The Big Short."
  • He values investments in overlooked sectors, similar to the contrarian investors who profited from the 2008 mortgage crisis.
  • Wesley's successful investment in Fitbit reflects his contrarian strategy, as he invested when others doubted the profitability of hardware.
  • He seeks to invest in durable, impactful products that offer long-term value.

"I sort of wrote a check into it and became one of the biggest sort of returners for the fund at policis."

This quote highlights Wesley's successful contrarian investment in Fitbit, demonstrating the potential of investing against the grain.

Working with Larry Page

  • Wesley Chan describes working with Larry Page as a privilege and an enlightening experience.
  • Larry Page challenged Wesley to consider the importance and impact of his work.
  • This mindset has informed Wesley's career decisions, leading him to seek impactful projects and change focus every few years.

"Is this really the thing that you want to be working on?"

This quote reflects Larry Page's influence on Wesley's career philosophy, encouraging him to focus on work that has a significant impact on the world.

Wesley Chan's Current Interests

  • Wesley is interested in investing in products with a lasting impact, as opposed to ephemeral trends.
  • He seeks to invest in businesses and products that are durable and will be valued for decades.

"So that's where I want to spend my time."

This quote conveys Wesley's desire to focus his efforts on investments that have the potential for long-term significance and impact.

Wesley Chan's Reading Habits

  • Wesley reads Bob Lefsetz's email newsletter daily for its unique insights into music and politics.
  • He values Lefsetz's contrarian perspectives.

"It's by Bob Blefstez."

This quote reveals Wesley's source for thought-provoking content and the importance of diverse viewpoints in his daily reading.

Challenges in Wesley Chan's Role

  • Efficient time management is a daily challenge for Wesley in his role at Felicis.
  • He emphasizes the irreplaceable nature of time and strives to maximize its impact.

"How can I better figure out how to be most leveraged in my time?"

This quote underscores the importance Wesley places on time efficiency and the continuous effort to optimize his productivity.

Wesley Chan's Most Recent Public Investment

  • Wesley's most recent public investment was in Canva, motivated by its significant user engagement.
  • The decision was based on the product's global reach and the founders' impressive work.

"We said yes to them, and it's been the absolute delight working for them over the last several months."

This quote explains the rationale behind Wesley's investment in Canva and his satisfaction with the partnership.

Podcast Promotion and Sponsorship

  • The episode concludes with host Harry Stebbings promoting his social media and newsletter.
  • The episode's sponsor, Lisa, is highlighted for their unique mattress delivery method and social impact initiatives.

"And if you'd like to stay updated with everything from me, you can follow me on Snapchat at htebings or sign up to the newsletter on the Twentyminutevc.com so you never have to miss an episode or an update from us."

This quote is a call to action for listeners to stay engaged with the podcast through social media and newsletters.

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