The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

20VC: Betaworks' John Borthwick on Why The VC Model Is So Inefficient, Why Venture Fund Cycles Are Too Short & Why Frontier Tech Could Only Have Been Disappointing Over The Last Year

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Mar 6, 2017

John Borthwick, Founder & CEO at Betaworks, shares his insights on the VC landscape, critiquing traditional models for their inefficiency and short fund cycles. He discusses how the market has evolved beyond conventional venture capital strategies and explores the disappointment surrounding AI and frontier tech. Borthwick believes we’re addicted to short-term gains, and emphasizes the need for a longer outlook in investing. The conversation also delves into the interplay between consumer dynamics and innovation, showcasing Betaworks' unique approach.

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INSIGHT

Nonlinear Capital Needs In Startups

The cost to take an idea to beta has radically fallen, shifting capital needs earlier in the lifecycle.
Massive capital is still required when a company hits scale because distribution and marketing concentrate power.

INSIGHT

What Venture Capital Still Does Best

The traditional VC model excels at funding later-stage scaling where capital intensity spikes.
It struggles to adapt to the earlier, cheaper, faster experimentation that new platforms enable.

ANECDOTE

Giphy As A Rapid Scale Example

Giphy scaled to reach more than 100 million people every day after rapid viral adoption.
Betaworks used that example to show how quickly winners can emerge once infrastructure and distribution align.

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John Borthwick is the Founder & CEO @ Betaworks, the New York-based startup platform combining 3 areas of expertise. They have a studio where they have built products including Giphy, Dots, Bitly and more. They have a fund with prior investments including Tumblr, Medium and Kickstarter. Finally they have a camp, a thematic accelerator program for companies in frontier technology sectors. As for John, Prior to Betaworks, John was an SVP at Time Warner Inc following John's previous company, WP-Studio, being acquired by AOLTW.

In Today’s Episode You Will Learn:

1.) How John made his way from AOL and Time Warner to founder of Betaworks?

2.) Why is John skeptical of the traditional VC model? Why does John believe that the market has adapted but the VC model has not?

3.) Why does John believe fund cycles are simply too short, in the same school of thought as Matt Ocko @ Data Collective? What are the problems with this?

4.) How does John evaluate Fred Wilson's post on the consumer downturn? Why does John think we are addicted to short term rapid fire hits?

5.) Why is John not surprised that AI, Bots, VR and AR are being 'labeled a disappointment for the last year? What does he think will be the catalyst for their rise?

Items Mentioned In Today’s Show:

John’s Fave Book: King Lear

As always you can follow Harry, The Twenty Minute VC and John on Twitter here!

Likewise, you can follow Harry on Snapchat here for mojito madness and all things 20VC.

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