The Power and Perils of Narrative in VC Decision Making with Jessy Wu
Mar 8, 2023
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Jessy Wu, a standout brand in Australia, explores the power of controversy and branding as a superpower. They dive deep into the Australian venture capital market and Afterwork's story and comparative advantage. Other topics include the power of language, optimizing for multiples in investment, ownership strategies, and the role of fundraising.
Storytelling is valuable for fundraising, but distinguishing genuine narratives from misleading ones is crucial.
High conviction investing requires ongoing engagement with founders, feedback from the community, and monitoring key metrics.
Investors provide unique value through their broad view of multiple companies and insights gained from observing patterns and market trends.
Deep dives
Jesse Woo's Insightful Perspective on Branding and Investing
Jesse Woo, a prominent figure in the Australian startup ecosystem, discusses the importance of branding and contrarian thinking in this podcast episode. Woo emphasizes the value of storytelling and how it can influence fundraising, hiring, and team motivation. However, he also cautions against over-reliance on storytelling and the dangers of being swayed by emotional responses. Woo believes that high conviction investing requires a time series of observations and customer personas to validate assumptions. Furthermore, he explores the qualities that make a good investor, highlighting the importance of a bird's-eye view of different companies and the ability to bring insight and resources to founders. The conversation also touches on the role of VC associates and the need for differentiation and contrarian thinking in the industry.
The Power of Storytelling and its Limitations
Storytelling is seen as a valuable skill for founders, as it can aid in fundraising, recruiting, and sales. However, Woo emphasizes the importance of distinguishing between genuine storytelling and misleading narratives. He cautions against relying solely on an emotional response and highlights the need for logic and analysis when evaluating opportunities. Additionally, he discusses the potential risks of small funds and the challenge of straddling between contrarian and consensus investments. Woo underscores the value of customer personas and subject matter expertise in understanding market needs and making informed investment decisions. Lastly, he shares his thoughts on the qualities and background that make a good investor, emphasizing the importance of providing value through insights and resources rather than trying to be operators within companies.
Insights on Investor Conviction, Valuation Discipline, and Contrarian Thinking
Woo delves into the process of developing investor conviction, particularly in the early stages. He highlights the need for a time series of observations and understanding organizational discipline in founders. Woo emphasizes that high conviction does not necessarily come from initial checks but can be built over time through engagement with founders, feedback from the community, and monitoring key metrics. He also stresses the importance of valuation discipline and the focus on building sustainable businesses. Woo acknowledges the challenges faced by small funds in being contrarian and the need for consensus to drive larger financing rounds. Lastly, he discusses the role of subject matter expertise, differentiation, and community feedback in shaping investment decisions and avoiding common pitfalls.
The Role of VC Investors and Mindset Shifts in the Australian Startup Ecosystem
Woo highlights the unique value that VC investors bring to founders through their broader view of multiple companies and insights gained from observing patterns and market trends. He discusses the challenges faced by smaller funds in their investment approach, highlighting how their limitations can be mitigated through community feedback and subject matter expertise. Woo suggests that being a good investor requires a focus on providing insight and resources rather than necessarily being a mentor or operating within a company. He also examines the tension between commercial backgrounds and operator backgrounds among investors, recognizing the value that both perspectives bring. Lastly, he reflects on the need for contrarian thinking and differentiation within the Australian startup ecosystem to foster innovation and growth.
Jesse Woo: A Multi-Faceted Conversation on Investing, Branding, and Contrarian Thinking
In this podcast episode, Jesse Woo offers a wealth of insights on investing, branding, storytelling, and contrarian thinking in the Australian startup ecosystem. He emphasizes the value of storytelling in fundraising, hiring, and motivating teams while cautioning against overly relying on narratives. Woo encourages the development of investor conviction through prolonged engagement, subject matter expertise, and customer personas. He also emphasizes the importance of valuation discipline, differentiation, and community support in driving successful investment decisions. Furthermore, Woo explores the qualities that make a good investor and how a bird's-eye view and broad industry knowledge contribute to providing unique value to founders. The conversation concludes with a reflection on the state of the Australian startup ecosystem and the need for contrarian thinking and differentiation to foster innovation.
This week we were joined by Afterwork Principal Jessy Wu. Jessy has built a standout brand in Australia through her unique takes and contrarian views. We dived into Jessy’s upbringing, the power of controvery and branding as a super power. We then went deep into the Australian venture capital market and Afterwork’s story and comparative advantage.
This episode is sponsored by Recess a great Aussie startup providing furniture for your home and office. They’ve fitted out thousands of Aussies including the offices of Eucalyptus, Lyka and Afterwork. Use the code SACHINANDADAM for 20% off your next order.
