I’m not usually a fan of business books, but when one of the best CEOs I’ve ever encountered—Oguzhan Atay, co-founder of BillionToOne (B2O)—strongly recommends one, I take notice.
My point is that the T2D3 model never actually worked practically: great software businesses typically compound so much that through a combination of unique demand spikes and negative net churn, growth accelerates much faster at some point -and you see companies get from $1 to $5m then $15m then $40m or something.
I don't think the market can fund T2D3 in a fashion that is not too dilutive for founders or investors alike.
Thanks for your comment. I would love to find opportunities to work together. You guys are building a killer portfolio!
What worries me is that fast growers with high quality revenue are being pushed to grow faster by VCs enamored with even-faster-growers with low quality revenue. Ironically, many of these VCs got burned by pursuing low quality revenue at high prices in 2021, although perhaps they have not yet had to eat their markdown vegetables just yet.
Hey Sandy - congrats on yet another amazing investment. We should do more investments together with Long Journey!
Regarding the second part of your post, I have written something a bit similar to Stebbings here:
https://www.linkedin.com/posts/pascallevygarboua_the-vc-industrys-1-rule-has-changed-for-activity-7305233549199065088-TBW1
My point is that the T2D3 model never actually worked practically: great software businesses typically compound so much that through a combination of unique demand spikes and negative net churn, growth accelerates much faster at some point -and you see companies get from $1 to $5m then $15m then $40m or something.
I don't think the market can fund T2D3 in a fashion that is not too dilutive for founders or investors alike.
Thanks for your comment. I would love to find opportunities to work together. You guys are building a killer portfolio!
What worries me is that fast growers with high quality revenue are being pushed to grow faster by VCs enamored with even-faster-growers with low quality revenue. Ironically, many of these VCs got burned by pursuing low quality revenue at high prices in 2021, although perhaps they have not yet had to eat their markdown vegetables just yet.
Love the perspective Sandy. Thanks