Cardinal Sins and Personal Reflections in Software Investing

My guest today is Miles Grimshaw. Miles is in his early thirties and is a General Partner at Benchmark. His experience and success belie his age. He was an early investor in Segment, Benchling, and Airtable, all before they had 30 employees. I have learned a ton from Miles about software investing and that’s why I was excited to have him on the show. We discuss his biological approach to investing, whether pure API companies can be good businesses, and what most has his attention right now. Please enjoy this conversation with Miles Grimshaw.

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Show Notes

[00:02:57] - [First question] - His notion of the investor as a biologist or a physicist

[00:05:24] - Why he seeks out new companies with unique business models

[00:07:53] - How his investments are based on present and future needs in the market

[00:11:55] - Evaluating the genetics of a nascent or small company

[00:13:38] - The half-life of information as it flows through a company or platform

[00:17:26] - Unpacking how software companies can survive re-evaluation periods

[00:21:03] - The power of environment creation and facilitation

[00:25:10] - The importance of user conferences

[00:25:45] - A company’s potential for a differentiated second act as a sign of good genes

[00:30:21] - Product quality, timing, and reinvention in tech startups

[00:33:10] - Why it’s crucial for companies to avoid copying their heroes

[00:37:41] - Breaking down market perspective on pure API companies

[00:41:29] - His views on software targeted to vertical versus horizontal markets

[00:44:29] - Carefully leveraging relationships with core customers

[00:48:06] - Operational lessons from his experience with the companies he’s invested in

[00:50:26] - His maxim that software development is as much an art as a science

[00:51:12] - His idea of a product magician in the software industry

[00:52:19] - Effects of new products and categories at the forefront of the space

[00:58:21] - How software founders should prepare for 2023

[01:01:41] - How both market structure and product shape the genetics of a business

[01:04:32] - The challenge of pricing and packaging for SaaS companies

[01:06:42] - Cardinal sins in software investing

[01:07:42] - The kindest thing anyone has ever done for him