
How First Round Capital missed out on Twitter's first round. - randall
http://redeye.firstround.com/2011/04/woulda-coulda-shoulda-twitter.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+redeyevc+%28Redeye+VC%29&utm_content=Google+Reader
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WasabiVentures
The key to any early stage investing is betting on the team involved. I agree
valuation really matters, but getting in with a great team is more important
than the perfect valuation.

~~~
webwright
As a counterpoint: [http://pmarca-archive.posterous.com/the-pmarca-guide-to-
star...](http://pmarca-archive.posterous.com/the-pmarca-guide-to-startups-
part-4-the-only)

TL;DR Market is more important than team.

Of course, trying to estimate the market of something totally new (or sorta
new) like Twitter is hard. What market does it enter/disrupt? Social
networking? Blogging?

Edit: Example is Odeo. Just about the same team as Twitter... Crappy market as
it turns out.

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tonystubblebine
I tackled that exact question in a post about my experience on the Odeo team
at the start of Twitter. My conclusion was that the phrasing was wrong. What
matters most for a product? Market. What matters most for a company? Team.

Odeo the product failed because there was no market for it. Odeo the company
produced a great win with Twitter because it had the right team to do
something like that.

A little more depth here, Real Lessons from Twitter (section #2):
[http://www.stubbleblog.com/index.php/2009/06/the-real-
lesson...](http://www.stubbleblog.com/index.php/2009/06/the-real-lessons-from-
twitter/)

~~~
webwright
That is an epic-good blog post. Thank you!

"A good team, that listens to its customers, is going to find a good market
and put together a good product for that market."

This is true. But, Andreeson is looking as an investor-- he invest once a team
has settled on a market--- when it's oftentimes too late to change directions
so radically. Ev did the sensible thing when Twitter was looking promising--
he effectively put Odeo on the shelf and started a fresh company with a fresh
cap table.

A lot of founders don't have that option (after they've taken money) and are
forced to pivot within their market. So a good team can be constrained by
investment/inertia.

~~~
tonystubblebine
You're right. It's nuanced.

------
suking
It's nice (and rare) to see VCs being humble.

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zachallaun
Actually, there may be something of a trend towards transparency forming.

<http://paulgraham.com/airbnb.html> \---
<http://www.bvp.com/Portfolio/AntiPortfolio.aspx>

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suking
3 out of thousands does not make a trend... Plus these are old.

