This Week in Startups ANGEL: FirstMark’s Rick Heitzmann on shaking off the bull run, “shock absorbers,” and more | E1670
Feb 2, 2023
Rick Heitzmann, a seasoned venture capitalist at FirstMark Capital, shares his insights from navigating multiple economic cycles. He discusses the importance of 'shock absorbers' in leadership, particularly during downturns, and how companies like Airbnb exemplify resilience. He emphasizes the shift from growth to profitability, advising founders to adapt their strategies accordingly. Rick also reflects on the challenges of customer acquisition costs and lifetime value in today's volatile market, highlighting key lessons for startups.
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Speculative Asset Bubble
- The past bull run was a "Speculative Asset Bubble" due to zero interest rates and no cost of capital.
- This led to bad behaviors like raising money too early and speculative investments.
Airbnb's Response to Downturn
- Airbnb reacted well to the downturn by taking decisive action, securing insurance, and implementing austerity measures.
- They right-sized the company and learned how to operate efficiently before the bubble burst.
Marketplace Advantages
- Marketplaces can react better in down markets because they are asset-light and can adjust costs quickly.
- Their primary costs are people and marketing, which can be titrated down.