
The VC Playbook - frntier
https://frntier.substack.com/p/frntier-special-the-vc-playbook
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streetcat1
This letter completely misses the point. The point of any long term investment
is what is reversible and what is not.

Lets look at the three pillars:

1) Team - completely reversible. Hence not important.

2) Product - completely reversible. Team can change the product architecture
given a strong demand from the strong market.

3) Market - not reversible. Yes, a pivot is possible, but than the company is
basically a new venture.

To sum up. Market (the idea) is the only thing that counts.

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frntier
Thank you for the constructive feedback. Let me explore three responses.

First, and what will seem like a semantic argument, it is not a matter of
reversibility/irreversibility. It is a matter of substitutability (i.e.
whether you can substitute the founding team, whether you can substitute the
technology/product, whether you can substitute the market). In every instance
of a pillar being substituted, the venture would essentially change.

Second, each pillar is substitutable. The sweet-spot hypothesis put forward in
the newsletter does not argue that each cannot be substituted. Rather, those
companies which fall in the sweet-spot are those which require no substitution
of any of the pillars. Of course, very early-stage cos may not have got the
product or the market (lack of PMF) and may not have the core team (hence, the
need to hire); but, this does not mean the pillars need to be substituted (or
'reversed').

Finally, the sweet-spot hypothesis does not dismiss the need for a primary
filter. It is highly unlikely that you will find a 'perfect' investment. The
latticework of theses and heuristics explored throughout the newsletter aims
to identify the risk factors of an investment. If one of the theses/heuristics
in your latticework is a primary filter- and that filter is not present- you
can avoid that investment. Your primary filter- it seems- would be market and
later in the newsletter we identify that this is Scott Kupor's too (see
Question 3 in the newsletter).

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streetcat1
So are you a VC?

My primary filter is actually more specific than just the market. It is market
timing. You have to start around two years before the market starts the growth
stage.

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frntier
Sure- later in the newsletter we explore Timing. Yes- part of timing involves
Rogers' Bell Curve (i.e. the technology adoption curve).

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frntier
The premise for this specific newsletter was that VCs should have a
latticework of theses and heuristics which inform their investment decisions.

