Jay Hoag, co-founder of Technology Crossover Ventures (TCV), shares captivating insights from his journey in tech investing since 1995. He recounts Netflix's transformative shift from DVDs to streaming, highlighting crucial decisions during challenging times. The conversation dives into customer retention strategies that emphasize easy cancellations and a focus on consumer experience. Hoag also discusses the mindset needed for investing through downturns, underlining resilience and strong leadership as key to navigating market challenges.
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Pioneers of Crossover Investing
In Acquired's Altimeter episode, Brad Gerstner highlighted Jay Hoag and TCV as pioneers in crossover investing.
TCV, founded in 1995, was the first firm to invest in both public and private companies from the same fund.
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Netflix Everywhere
Ben Gilbert recounts seeing a prominent Netflix button on a hotel TV remote, highlighting Netflix's pervasive presence.
This seemingly small detail underscores the magnitude of Netflix's success and impact.
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From Stoplights to Tech Investing
Jay Hoag's upbringing in the pre-tech era, with limited exposure to technology, makes his career in tech investing an interesting contrast.
He recounts the novelty of a second stoplight in his small Wisconsin town, highlighting the pace of technological change.
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In this book, Reed Hastings and Erin Meyer explore the counterintuitive management culture that has driven Netflix's success. The authors discuss how Netflix's approach, which includes no vacation or expense policies, generous severance for underperforming employees, and a focus on candid feedback, has led to unparalleled innovation and speed. Drawing on hundreds of interviews with current and past Netflix employees, the book provides actionable lessons for leaders on how to build and maintain a highly innovative and adaptable organizational culture.
The Innovator's Dilemma
When New Technologies Cause Great Firms to Fail
Clayton M. Christensen
In this influential business book, Clayton Christensen shows how even the most outstanding companies can lose market leadership when they fail to adapt to disruptive innovations. Christensen explains why companies often miss new waves of innovation and provides a set of rules for capitalizing on disruptive technologies. The book uses examples from various industries, including the disk drive, mechanical excavator, steel, and computer industries, to illustrate trends that lead to success or failure in the face of disruptive technologies.
We had the rare opportunity to interview Jay Hoag, cofounder of the first tech crossover investing firm, TCV, at TCV’s Engage Summit in Half Moon Bay earlier this fall. Jay and Rick Kimball started TCV back in 1995 and have been part of the private-to-public journeys of storied companies like Netflix (which Jay shares some great war stories about on this episode), Spotify, Zillow, Expedia, Facebook, Airbnb, Peloton and many others. Jay and TCV were kind enough to let us release the conversation as an Acquired LP episode, and we’re excited to share it with all of you. We cover the firm’s history, how companies should calibrate the magnitude of their future-looking product investments (a topic we didn’t realize would end up being so timely) and perhaps most importantly, pivotal moments where now seemingly unstoppable companies almost died amidst big macroeconomic changes. We hope you enjoy!
Note: Acquired hosts and guests may hold assets discussed in this episode. This podcast is not investment advice, and is intended for informational and entertainment purposes only. You should do your own research and make your own independent decisions when considering any financial transactions.
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