Inside Tribe Capital: Building a $1.6B Data-Driven Venture Capital
Aug 30, 2023
auto_awesome
Explore the evolution of data science in investing with insights from Jonathan Hsu, co-founder of Tribe Capital. Discover the new accounting principle for startups, the quantitative approach to product market fit, and the unique data-driven model of Tribe Capital. Dive into the history of accounting, the future of venture capital, and the innovative strategies used in assessing investment opportunities.
Evolution from Benjamin Graham's accounting to data-driven analysis reshaped venture capital landscape.
Technology enables measuring product market fit before revenue, focusing on engagement metrics.
Deep dives
Evolution of Analytical Thinking in Business Building
Analytical thinking in investing traces back to Benjamin Graham, the pioneer who brought accounting systematically into investing about a hundred years ago. The shift towards data-driven approaches in the mid-2000s marked a pivotal moment in analyzing companies more quantitatively. Companies like Facebook led the way in utilizing data for operational insights. This evolution reshaped the landscape, focusing on engagement data and standardized analytic frameworks for operators and investors.
Quantitative Approach to Product Market Fit
The advent of technology enabled businesses to measure product market fit before revenue generation, a concept unfamiliar in earlier business models. The shift to software-based models emphasized metrics like monthly active users and gross transaction volumes. Understanding and analyzing engagement data through systematic definitions became crucial. Standardized metrics like MRR and cohort analysis transformed how startups gauge success pre-revenue.
Future Landscape of Venture Capital and Manager Diversity
With increasing capital inflow, the venture capital industry has seen a surge in diverse investment strategies and managers aligning with specific LP preferences. The flourishing ecosystem benefits founders with a wider array of potential investors catering to various investment philosophies. The future reflects a mix of data-driven and traditional approaches in venture capital, offering founders more options to partner with managers aligned with their vision.
In this episode, we talk to Jonathan Hsu. He is the co-founder of Tribe Capital, a venture capital firm that focuses on using data science to get an edge in venture. Prior to establishing Tribe Capital, Jonathan was the one of the first members of Facebook's data science department.
Jonathan describes his journey from becoming Facebook's first data analyst to co-founding a data-driven venture capital firm, what product market fit accounting looks like, and Tribe Capital's unique approach when founders come to seek investment opportunities.
Subscribe to Zypsy Spotlight wherever you listen to podcasts to learn more useful insights on what the future of venture capital looks like.
Timestamp 00:00 Introduction 01:09 Jonathan’s experience 02:57 New accounting principle for startups 06:02 Quantitative approach to product market fit 08:52 Using the quantitative strategy with Docker 13:02 The history and evolution of accounting 18:16 Future of Tribe Capital
Get the Snipd podcast app
Unlock the knowledge in podcasts with the podcast player of the future.
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode
Save any moment
Hear something you like? Tap your headphones to save it with AI-generated key takeaways
Share & Export
Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode