20VC Notion's Fundraise with Index The Most Anticipated Deal in The Valley How It Came To Be The Future of Remote Work How Notion Approach The Balance of Growth and Profitability



In a dynamic episode of "20 Minutes VC," the hosts welcome Sarah Cannon, a partner at Index Ventures, and Akshay Kothari, CEO of Notion, to discuss Notion's rapid ascent and recent $50 million funding round at a $2 billion valuation. Sarah, who has worked with transformative companies like Slack and Quill, shares her pursuit of Notion, a company she admired for its product and culture. Akshay, previously with LinkedIn, explains Notion's strategy to remain lean, efficient, and profitable while scaling up to meet growing demand. Both guests highlight Notion's potential to revolutionize workspace collaboration, with an emphasis on the upcoming API launch aimed at enhancing user creativity and productivity. The conversation also touches on the broader venture capital landscape, the impact of COVID-19 on remote work and digital collaboration, and the importance of diversity in the VC industry.

Summary Notes

Special Show Announcement

  • The company featured raised $50 million at a $2 billion valuation.
  • The leading fund announced raising an additional $2 billion.

This is the 20 minutes VC and my word. Do we have a special show for you today, a double guest episode and so relevant on so many different levels. First, just last week the company being featured raised an incredible $50 million round at a reported $2 billion valuation.

This quote sets the stage for the episode, highlighting the significance of the featured company's recent fundraising success and the fund's additional capital raise.

Guest Introductions

  • Sarah Cannon, a partner at Index Ventures, works with groundbreaking companies.
  • Akshay Kothari, CEO at Notion, joined after his previous company, Pulse News, was acquired by LinkedIn.
  • Notion is described as an all-in-one workspace tool.

First, Sarah Cannon partnered Index Ventures, where she works with some truly groundbreaking companies including Notion, Slack, Pitch, Quill, and Instabase... Then I'm also thrilled to welcome joining us from Notion, Akshay Kathari, CEO at Notion, the company that has taken the modern working world by storm as the all-in-one workspace to write, plan, collaborate and get organized.

The quote introduces the guests, Sarah Cannon and Akshay Kothari, and provides background on their professional affiliations and the impact of Notion in the workspace sector.


  • The host thanks various individuals for their question suggestions.
  • Acknowledges the collaborative effort in preparing for the podcast.

I do also have to say this really was a team effort in terms of the questions. So a huge thanks to Iden Senkut, Locky Groom, Daniel Gross, Elad Gill, and Notion's own Ivan Zhao for some truly fantastic questions suggestions today. I really do appreciate that.

This quote expresses gratitude for the contributions made by several individuals in shaping the content of the podcast episode.

Product Endorsements

  • Carter simplifies equity management for startups and investors.
  • Switch helps laid-off talent amid the coronavirus crisis find new opportunities.
  • Brex offers corporate cards for startups with various benefits.

But my word, this is a product I love Carter Carter simplifies how startups and investors manage equity, track cap tables and get valuations... Switch is free for all parties. It's just here to help... Brex is the company which built the corporate card for startups.

These quotes detail the features and benefits of Carter, Switch, and Brex, which are services aimed at assisting startups and investors in various capacities.

Personal Introductions and Backgrounds

  • Sarah Cannon's untraditional path to venture capital included time in West Africa and working on Obama's economic team.
  • Akshay Kothari's connection to Notion began with an investment and later joining the company as COO.

It was very untraditional path to venture capital. I spent some time living in West Africa, worked on Obama's economic team during the last recession, was training to be an economist... Yeah, so I've known Ivan for almost a decade now... notion was my first investment.

These quotes provide personal background information on how Sarah Cannon and Akshay Kothari arrived at their current positions, highlighting their unique journeys.

The Deal with Notion

  • Index Ventures led the recent funding round for Notion.
  • The deal was highly sought after by VCs in Silicon Valley.
  • Sarah Cannon pursued Notion due to her admiration for the product and its potential, given her insights from Slack.

This is the deal that every VC in the Valley wanted for so long. So how did it come about in terms of the deal?... I first discovered Notion's product in early 2018, and it really was kind of love at first sight... I was very fortunate to be a board observer at Slack at the time.

This quote discusses the competitive nature of the deal with Notion and Sarah Cannon's personal motivation for pursuing the investment, drawing on her experience with Slack.

Pursuing Notion

  • Sarah Cannon's efforts to connect with Notion included sending emails and visiting their office unannounced.
  • She used personal touches and persistence to engage with Notion's founders.

So I naturally, as an investor does, reached out to the founders and of course no response... And I just really have never felt this way about a product... I showed up at the office with an invitation for Ivan... I ended up leaving Ivan to continue to do his work. And I was like, boy, I hope he comes. Sure enough, definitely did not come to the gallery.

The quote illustrates Sarah Cannon's dedicated approach to establishing a relationship with Notion, including a personal visit and an invitation to an art gallery as a means to connect with the CEO, Ivan.

Building the Relationship

  • Cannon's persistence eventually led to a meaningful connection with Notion's team.
  • Her strategy included offering help and sharing insights from her experience at Slack.

I just kept trying to help. And I would just at the beginning, I was guessing what they wanted or might need, what I was learning at slack that I could share about hiring or pricing or anything I could really think of.

This quote demonstrates Sarah Cannon's proactive approach to building a relationship with Notion by offering assistance and sharing valuable insights to gain the trust and attention of its founders.

Fundraising Mindset Shift

  • Notion initially had no plans to raise money, as repeatedly stated by Akshay Kothari.
  • The crisis prompted a reevaluation of fundraising strategies.
  • The company decided to raise funds earlier than planned to get ahead of macroeconomic changes.
  • Raising funds was also seen as an insurance policy and a sign of long-term commitment to employees and customers.

Akshay kept saying, like, Sarah, we're not going to raise money. And I was like, I understand that, and I promise not to ask know. Then the crisis came and it changed, obviously, the way the company was thinking about fundraising.

The quote explains the initial reluctance of Notion to raise funds and how the crisis led to a change in their fundraising approach.

Talent Acquisition and Company Growth

  • Hiring top talent and showing commitment to the company's future is a priority.
  • The recent fundraise has boosted confidence among customers and employees.
  • Notion successfully hired Christina, a long-sought-after candidate, which was a significant win for the company.

We're able to show to our employees and our customers that we're here for the long run. Christina is an example of someone we've been trying to hire for 18 months and it finally came together in the last month.

This quote highlights the importance of demonstrating stability to stakeholders and the successful acquisition of a key employee.

Market Consolidation Expectations

  • There is an anticipation of market consolidation in the collaboration and remote tools space.
  • Unbundling of services from large suites like Microsoft Office has occurred, leading to best-in-class products.
  • Sarah Cannon predicts a rebundling phase where leaders in each product category emerge and potentially integrate.

I absolutely think we will see consolidation. There's an unbundling of Microsoft Office's suite into best in class products.

The quote reflects the belief that the market will undergo consolidation after a period of unbundling, leading to the emergence of leading platforms.

Transition from Application to Platform

  • Notion aims to rebundle services in a way that is more akin to a single medium, like paper, rather than separate software packages.
  • The goal is to reduce the number of tools needed to perform work tasks by creating a versatile platform.
  • Notion's API is highly anticipated by both individual and enterprise users to connect with other services and automate workflows.

The pendulum has to swing back to fewer tools that allow you to do your best work. We're not trying to do this in terms of creating like seven different pieces of software and then packaging them into the notion suite.

The quote describes Notion's strategy to simplify the work environment by reducing the number of separate tools required, contrasting with traditional software suites.

Remote Work and Collaboration Tools

  • The COVID-19 pandemic has forced teams to adopt remote work, making collaboration tools more critical.
  • Notion, as a collaboration tool provider, has gained insights and empathy for distributed teams.
  • The company has focused on enhancing productivity features for remote work, such as real-time document collaboration and improved asynchronous communication.

It's been a great experiment and it's actually forced a lot of our thinking, and we've gotten more empathy around just how people work distributedly.

This quote reflects on the unexpected shift to remote work and how it has influenced Notion's product development to better serve distributed teams.

Remote Work and Digital Collaboration

  • The current environment has highlighted the benefits of remote work and digital collaboration.
  • Tools like Notion are enabling people to avoid unnecessary meetings and collaborate on documents effectively.
  • Notion is being used across various sectors, including first responders and community coordination, to organize work and respond to the pandemic.

"And so in many cases, we're hearing from people that they're realizing that notion has become so handy in terms of even avoiding meetings that they have, because they can actually now just start a document and start collaborating and get the document in a good shape before they even have to talk about it."

This quote emphasizes the utility of digital collaboration tools like Notion that facilitate productivity and communication without the need for physical meetings.

Global Impact of COVID-19

  • COVID-19 is a unique crisis as it's a global, shared experience.
  • The pandemic is likely to result in a new equilibrium of behaviors worldwide.
  • Post-COVID, some behaviors will return to normal, while others, such as digital collaboration and decreased business travel, will likely persist.

"I think this is moving us into kind of a new equilibria of behaviors around the world."

Sarah Cannon suggests that the pandemic is catalyzing a shift in global behavior patterns, leading to a new normal in how people interact and work.

Long-Term Behavioral Changes

  • The pandemic has accelerated the adoption of digital collaboration and remote work.
  • It's expected that there will be a permanent increase in remote work, leading to a more diverse workforce.
  • Changes in business travel, empathy in the workplace, grocery delivery, telemedicine, and cashless transactions are anticipated to have lasting effects.

"I think there'll be some impactful changes over the long term."

Sarah Cannon predicts that the pandemic will have enduring effects on several aspects of daily life and business practices.

Maintaining a Lean Team

  • Notion has intentionally kept its team small to maintain agility and creativity.
  • A lean team has allowed Notion to be profitable and retain control over its destiny.
  • Even as Notion grows, it aims to preserve its values of efficiency and creativity within its workforce.

"It's allowed us to move fast and keep it very efficient."

Akshay Kothari explains that Notion's small team size has been a strategic choice that has contributed to its efficiency and profitability.

Profitability and Growth

  • Profitability and growth are not necessarily opposing forces.
  • Venture capital exists to fuel growth, even for profitable companies.
  • It's important for businesses to demonstrate a path to profitability and operate in industries with attractive margins at scale.

"I often think it's sequential that you're growing first and then you become profitable."

Sarah Cannon discusses the relationship between growth and profitability, suggesting that growth often precedes profitability in the business lifecycle.

Adjusting to Increased Funding

  • Notion's recent funding hasn't changed its commitment to building a large, impactful company.
  • The company is prepared to invest in growth, even if it means becoming temporarily unprofitable.
  • The influx of capital allows Notion to dream bigger and make strategic investments.

"Profitability has never been the goal for notion. I think the goal for us has always been to build the largest company and to be able to have as much impact in the world."

Akshay Kothari clarifies that while Notion has been profitable, its primary objective has always been to scale and maximize its impact, rather than focusing solely on profitability.

Runway and Financial Planning

  • Notion has given itself a significant financial runway, estimated at ten years, allowing the company to continue building and dreaming big despite economic uncertainties.
  • The company has prepared for extreme scenarios, such as their business revenue dropping to zero.

We now have about a ten year Runway to kind of continue building notion. And so from that standpoint, we can continue to dream big, even in this fairly kind of uncertain macro environment.

This quote emphasizes the importance of financial stability and long-term planning for a business, particularly in uncertain economic times.

Venture Capital Perspectives

  • Venture capitalists aim to partner with exceptional businesses and individuals.
  • Valuation considerations include both absolute and relative metrics.
  • Notion's growth and engagement levels are compared to successful companies like Slack.
  • Market size is crucial for justifying high valuations, with potential to scale significantly.
  • Diversification of returns is achieved through separate venture and growth funds at Index.

Fundamentally, my job, or our job as venture capitalists is to find exceptional businesses and partner with, you know, our business is one of outliers.

This quote underlines the venture capitalist's role in identifying and investing in standout companies that have the potential to disrupt markets and provide substantial returns.

Investment Metrics and Expectations

  • A 40x return on investment is seen as a significant but achievable goal for exceptional companies.
  • The size of the market for productivity tools like Notion is vast, with comparisons made to the user base of Microsoft Office.
  • Notion's potential for growth and scaling is compared to the trajectories of Slack and Zoom.

You only want to enter companies at this level of valuation when you feel the absolute size of the market is incredibly large and that could sustain, I mean, to your 40 x math, an 80 or 100 billion dollar business.

This quote discusses the rationale behind investing in companies with high valuations, emphasizing the importance of a large addressable market that can support ambitious growth targets.

Personal Recommendations and Insights

  • Recommended books reflect personal interests and discussions among colleagues.
  • Perspectives on economic policies, such as stimulus packages, suggest a focus on individual support.
  • The importance of diversity of thought in venture capital to fund a broader set of ideas and companies.

Guns, germs and steel by Jared diamond. It talks about why some companies are rich and some companies are poor.

This quote reveals personal reading preferences and the quest for understanding complex historical and economic patterns.

Company Building and Leadership

  • Akshay Kothari excels in the initial stages of product development and problem-solving within a company.
  • Scaling is identified as a less enjoyable aspect for Kothari, who prefers to surround himself with individuals skilled in that area.
  • Diversity in venture capital is desired to bring in varied experiences and fund a wider array of innovative companies.

I'm really good at the zero to one part. I think you can throw me pretty much any problem inside the company and I could get you to a version of product market fit there.

This quote highlights Kothari's strength in initiating and developing new products or solutions within a company, a critical skill in the early stages of a startup.

Notion's Product and Market Misconceptions

  • Notion is often perceived merely as a note-taking tool, but it has broader capabilities.
  • The initial misunderstanding of the product's scope is seen as an opportunity to introduce users to its full potential.

Notion, I think for many people is a note taking tool... but it's also a great entry point into the product.

This quote reflects on the common misconception about Notion's functionality and the strategic use of this misunderstanding to engage and expand the user base.

Future Aspirations and Goals

  • Notion aims to empower people to create tools that shape their lives, reflecting a grand vision for the company's impact on society.
  • The goal is to maximize the computing power available to users, moving beyond basic uses to more sophisticated applications.
  • The next five years for Notion are focused on achieving significant growth and fulfilling the company's ambitious vision.

I'm very excited to work with Sarah and the team at notion to get to 40 x, as you kind of correctly pointed out, so very much focused on that.

This quote from Akshay Kothari outlines the forward-looking goals for Notion, with a clear focus on growth and achieving a substantial return on investment.

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