This Week in Startups ANGEL: FirstMark’s Rick Heitzmann on shaking off the bull run, “shock absorbers,” and more | E1670
Feb 2, 2023
Rick Heitzmann, a seasoned venture capitalist at FirstMark Capital, shares his insights from navigating multiple economic cycles. He discusses the importance of 'shock absorbers' in leadership, particularly during downturns, and how companies like Airbnb exemplify resilience. He emphasizes the shift from growth to profitability, advising founders to adapt their strategies accordingly. Rick also reflects on the challenges of customer acquisition costs and lifetime value in today's volatile market, highlighting key lessons for startups.
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Airbnb's Response to Downturn
- Airbnb reacted well to the downturn by taking decisive action, securing insurance, and implementing austerity measures.
- They right-sized the company and learned how to operate efficiently before the bubble burst.
Marketplace Advantages
- Marketplaces can react better in down markets because they are asset-light and can adjust costs quickly.
- Their primary costs are people and marketing, which can be titrated down.
Dot-com Bust Experience
- Rick Heitzmann started in venture capital in the mid-90s and founded First Advantage after the dot-com bust.
- The dot-com bust involved hard shutdowns, severance issues, and intense competition for resources.