Josh Kuzon

Mostly bad jokes and helping early-stage founders build enduring companies in #payments #fintech #crypto #web3 #cybersecurity

[Josh Kuzon @Jkuzon]

@asanwal Please, Exeter.

[Josh Kuzon @Jkuzon]

@Etsy why do I have to create an account to view my order details?

[Josh Kuzon @Jkuzon]

@jefielding It’s an interesting thing. I worked with one of these, their saying was only spend OPM to build high risk ventures. 🤷‍♂️🤷‍♂️

[Dave Kline @dklineii]

My playbook for resolving any workplace disagreement

[Josh Kuzon @Jkuzon]

@zerohedge Never going to happen. So, what else is news worthy?

[fintechjunkie @fintechjunkie]

Great minds see with the eyes of generations. They understand the past and how the future is likely to unfold. Knowledge and perspective.

And then there are the voices that shout loudly and care nothing about anything other than themselves and now. And they’re all on Twitter.

[Josh Kuzon @Jkuzon]

How long until KeyCorp gets hit with a big AML violation? Mexico > US > Canada

[yoni rechtman @yrechtman]

Platform and value added services don't make sense for venture. They warp the incentives, lead to bloated teams/funds, and don't materially change outcomes.

Here's why venture capitalists insist on building them anyway:

[Josh Kuzon @Jkuzon]

@Trace_Cohen lol.

[Trace Cohen @Trace_Cohen]

I want to be clear that the top tier established VC funds raising 10s of billions and the lions share of LP capital right now is good for our industry and I’m happy it’s happening. I know a lot of them and they’re good people too.

My writing tries to highlight facts and also show the other side of it - how hard it is to raise a smaller emerging manager fund. I also really enjoy it 😄

It’s like a startup against Big Tech that has vast history and well everything - it’s a truly unfair advantage that they’ve earned. It’s not supposed to be easy and rising tides lift all ships, just not equally and/or at the same time.

The big funds raising countless billions I believe is good for the overall tech/VC industry after 2yrs of basically nothing. We need that spark back, even if it’s “Ai hype” for now because that’s what drives capital into our world.

This I truly believe will trickle down to the smaller funds as others want to get into the tech world and learn. Stocks are at time highs and there are so many HNW/FO outside our tiny tech world that are smart, willing to take risks and motivated to help.

Please just be patient with them and keep them engaged so they don’t feel burned. A lot are still getting over and are weary from trying in 2021.

We have a lot of work to do - time to build!

[Josh Kuzon @Jkuzon]

@Trace_Cohen @davegpack Property managers take over bilt.

[Josh Kuzon @Jkuzon]

@mikulaja Bit strange…. Ah ha ha

[Josh Kuzon @Jkuzon]

@mikulaja As some have commented. Where is A16Z and Angela?

[Josh Kuzon @Jkuzon]

@NikMilanovic 🤣

[Nik @NikMilanovic]

damn fintech is cooked

[Startup Archive @StartupArchive_]

NVIDIA CEO Jensen Huang: “I really discourage 1-on-1s”

Jensen famously has 60 direct reports. When Stripe founder Patrick Collison points out that this isn’t conventionally considered best practice, Jensen shares his reasoning:

“I don’t do 1-on-1s, and almost everything I say, I say to everybody all the time. I don’t really believe there’s any information that I operate on that only one or two people should hear about… I believe that when you give everybody equal access to information, that empowers people. And so that’s number one… Number two, if the CEO’s direct staff is 60 people, the number of layers you’ve removed in a company is probably something like seven.”

Patrick offers to steal man the other side of the argument:

“1-on-1s are where you provide coaching, where you maybe talk through personal goals and career advancement, where maybe you give feedback on something that you see somebody systematically not doing so well… Do you not do those things or do you do them in a different way?”

Jensen responds:

“I give you feedback right there in front of everybody. In fact, this is a really big deal. First of all, feedback is learning. For what reason are you the only person who should learn this?… We should all learn from that opportunity… Half the time I’m not right, but for me to reason through it in front of everybody helps everybody learn how to reason through it. The problem I have with 1-on-1s and taking feedback aside is you deprive a whole bunch of people that same learning. Learning from other people’s mistakes is the best way to learn.”

Video Source: @stripe

[Josh Kuzon @Jkuzon]

@pitdesi @BillAckman 😂

[Josh Kuzon @Jkuzon]

goat.

[fintechjunkie @fintechjunkie]

The Grand Reset: VCs and LPs Are Starting To Internalize Reality

The past few years in the VC space have been brutal. Darwin has returned from vacation and the frothy gold rush of the 2018-2021 startup ecosystem has vanished. The ZIRP environment caused valuations to soar and VCs threw money at any startup with a pulse. The money was put to work by Founders quickly, many of whom chased shiny objects and undisciplined growth because their bank accounts were flush with cash.

But a harsh reality set in once we entered a new and higher interest rate economic cycle at the beginning of 2022: The vast majority of the high-flying ZIRP era startups are unlikely to deliver great financial outcomes for their investors and employees.

Early in the correction cycle there was a lot of denial by Founders, VCs and LPs, but this denial has for the most part gone away. For many startups it’s clear that it will be challenging if not impossible to earn their way into their last valuation. For many investors it’s clear that they’re playing to recoup their money (i.e. – playing for pref) rather than playing for “fund returning outcomes”. And for many LPs, they realize that this is an industry wide phenomenon because every active fund manager played the game that was on the field.

This has birthed a phenomenon that can be thought of as "The Grand Reset" where everyone in the ecosystem is seeking the cleanest path to a “do over”.

Venture capitalists know that they have one or two funds that are going to underperform but are excited about their front book opportunities. So the “new deal” they’re making with LPs is that they’ll try to quickly recoup what they can and make the most of the back book in return for being more disciplined going forward.

LPs understand that more investments than normal will fail and they know that absorbing those losses will lead to lower fund performance. LPs realize that the VC asset class is cyclical and great vintages can be created by great managers once the ecosystem flushes out the mistakes produced in an abundant and free flowing capital environment. The “new deal” they’re making with VCs is that they’ll forgive a bad vintage if the VCs will be honest with them about what the back book is “worth”, be more disciplined going forward and they’ll do everything they can to return some cash “soon”.

And many Founders have realized that the ZIRP funding environment hurt their startups in multiple ways. First, their common equity is likely buried under a massive preference stack. Second, too much money caused them to hire too many people and invest in too many projects and undoing this has been challenging. Third, raising capital when a company has been in “shedding mode” rather than “growth mode” is difficult which puts re-booting growth at risk. And finally, the opportunity cost of trying to fix a broken business vs. starting a new one from scratch makes sticking around “expensive”.

The net result of this “Grand Reset” is that there’s no longer incentive for anyone to maintain the illusion they can shepherd mediocre companies towards billion-dollar IPOs that aren’t going to happen. Instead, the focus has shifted towards "landing the plane" for the 90% of companies that aren’t ever going to achieve escape velocity. This generally means navigating an acquihire for struggling companies and helping “good but not great” portfolio companies find exits through acquisitions or mergers even if it means selling for a fraction of their inflated peak valuations.

This shift can be brutal for Founders who envisioned a triumphant IPO. But for many, it's a wake-up call. The pressure to "grow at all costs" has receded, replaced by a need to focus on building sustainable businesses with real revenue models and clear paths to profitability.

And "The Grand Reset" isn't just about selling off inflated companies. It's about resetting expectations on all fronts. VCs are re-evaluating their investment theses, focusing on strong unit economics and caring about capital efficiency. Founders are being forced to build businesses that can turn over cards in a disciplined way and survive without the crutch of endless VC funding. And LPs are seeking to re-up with Funds that have great pre-2018 track records and have a true competitive edge in today’s new normal environment.

This new landscape has its downsides. The flow of easy money has dried up which makes it harder for promising early-stage startups to secure funding. But there are upsides as well. The emphasis on fundamentals could lead to the creation of a new generation of startups built on a foundation of sustainable growth, not just hype.

The Grand Reset represents a significant course correction for the startup ecosystem. It's a painful process, but it could ultimately lead to a healthier and more sustainable future for both VCs and startups alike. As the dust settles, one thing is clear: The era of easy money is over. The startups that emerge from this reset will be the ones that can demonstrate real value and build strong businesses for the long term.

(More on "landing the plane" in a thread next week).

[Josh Kuzon @Jkuzon]

@pythianism Just when you think you’ve seen it all, out comes a “boring old venture” 10 feet tall

[Josh Kuzon @Jkuzon]

@jas_shah @jevgenijs @mttjon I wish you could catch a live glimpse of the world his grandparents were born into