E5: Jonathan Hsu | Co-Founder of $1.6B AUM Tribe Capital on What Data Shows is Product Market Fit
Aug 14, 2023
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Jonathan Hsu, Co-Founder and General Partner of Tribe Capital, discusses growth patterns and product market fit (PMF) in venture capital. They explore the importance of data in VC and the success factors of early Facebook. The episode also delves into the future of VC and the changing nature of returns.
The pattern of growth and product market fit is crucial for the long-term success of a firm.
Using advanced data analysis techniques and AI can enhance venture capitalists' decision-making process and lead to more informed investment decisions.
Deep dives
The importance of pattern of growth and product market fit
The podcast highlights the significance of a pattern of growth and product market fit in the long-term success of a firm. It challenges the commonly held belief that the founder and team matter the most, emphasizing that the pattern of growth is the ultimate determinant of success.
Utilizing data and analytics in venture capital
The podcast discusses the use of data and analytics in venture capital decision making. It explores how advanced data analysis techniques and AI can help in generating insights, benchmarking, and evaluating companies. Utilizing data-driven approaches enables venture capitalists to make more informed investment decisions.
The role of AI in venture capital
The podcast touches on the role of artificial intelligence (AI) in the venture capital industry. It suggests that AI can be harnessed to assist with analyzing vast amounts of data, generating benchmarks, and potentially even aiding in investment decision-making. While AI is valuable, the podcast acknowledges that human involvement and relationships remain essential in the venture capital ecosystem.
The future of VC and the importance of specialized mandates
The podcast shares insights on the future of venture capital and the potential for specialized mandates. It highlights the growing appetite for venture capital as an asset class among investors and suggests that while larger funds may dominate, there will always be a need for firms with specific mandates to cater to the preferences of diverse LPs. The evolving nature of returns and the desire for specific tools and mechanisms drive the demand for different types of venture capital firms.
David Weisburd sits down with Jonathan Hsu, Co-Founder and General Partner of Tribe Capital and one of the top data scientists in the space. Hsu is a physicist-turned tech entrepreneur-turned VC. In this episode, they discuss the importance of growth patterns and product market fit (PMF) in venture capital. Tribe conducts intensive data work on approximately 400 companies annually, a unique dataset that cannot be purchased or obtained from other sources. If you’re ready to level-up your startup or fund with AngelList, visit www.angellist.com/tlp to get started.
(0:00) Episode preview
(1:15) Jonathan’s evolution from a physicist to a founder to FAANG operator to VC
(3:00) The big data revolution in Silicon Valley
(4:35) Jonathan’s learnings from early Facebook and what differentiated the company for its success
(6:17) Pattern recognition around Product Market Fit
(10:17) Using data in Venture investing
(12:17) What experienced VCs all regret
(15:04) Sponsor: AngelList
(17:09) Hardcore benchmark analytics for startups
(23:27) Venture capital efficiency
(25:57) AI and investing
(27:27) Jonathan’s prediction for future of VC
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