Controversial views on entrepreneurship and venture capital

Andy Rachleff is a former partner at Benchmark Capital and co-founder and Executive Chairman of Wealthfront.

In this interview with Jason Calacanis, Andy shares several unconventional views on entrepreneurship and venture capital. He also talks about Wealthfront but I found his insights on entrepreneurship and venture capital particularly valuable. Here are 3 controversial views that resonated with me:

  1. 90% of the value added of the venture capitalist is making the right investment decision. Investors can help companies that would return 3X return 6X, but the 20X outcomes that are necessary for a successful portfolio will be 20X outcomes even in the absence of the investor.
  2. People are meant to be either investors or operators. Although Andy co-founded Wealthfront, he states that he was meant to be an investor.
  3. You need to get to early adopters first before going to the early majority because the early majority make their usage decision based on references. Attempting to go directly to the early majority is unlikely to succeed because the fact that your product would actually solve a problem for them if they tried it isn’t enough for them to actually try it in the absence of references from the early adopters.

You can watch the full interview below.