The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

20VC: The Lyft Memo: Floodgate's Ann Miura Ko on Why Successful Seed Investing Is Not Investing In a Company But The Development of a Set of Secrets, Whether Capital Is a Defensible Moat Today &How Startups Should Approach Competition

Aug 12, 2021

Ann Miura Ko, Co-founding Partner at Floodgate, shares her expertise in seed investing, emphasizing the importance of developing a deep understanding of customer needs. She recounts her pivotal role in Lyft's launch and the lessons learned from its unique customer development approach. Ann discusses the risks of rapid fundraising and stresses building honest relationships with founders. She also reflects on maintaining capital efficiency and fostering startup culture amidst competition, revealing critical insights for aspiring entrepreneurs.

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ANECDOTE

Customer Focus

Lyft's founders demonstrated a strong commitment to customer development through unconventional methods.
John Zimmer even wore a beaver suit on college campuses to promote the platform.

ADVICE

Seed Investing Focus

Seed investing is about backing founders committed to uncovering secrets, not just good ideas.
Look for founders willing to engage in customer development and learn through it.

ADVICE

Evaluating Founders

To evaluate founders, ask about their core beliefs, competition, and historical context.
Assess their speed of learning and how they iterate on insights.

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Ann Miura Ko is the Co-Founding Partner @ Floodgate, one of the leading early-stage firms of the last decade with a portfolio including the likes of Twitter, Twitch, Lyft, Okta, Outreach and more. As for Ann, not only did she lead the round for Lyft but in the last 12 months has led rounds for 2 of the hottest companies in the valley; Popparazzi and Popshop Live. Due to her immense investing success, Ann is a multiple Forbes Midas Lister and is also a lecturer in entrepreneurship at Stanford, a co-director of the Mayfield Fellows Program at Stanford, and a member of the Board of Trustees for Yale University.

In Today's Episode with Ann Miura Ko You Will Learn:

1.) How Ann made her way from a PhD in Quantitative Modelling at Stanford to co-founding one of the leading early-stage firms in the valley?

2.) What does Ann believe is the secret to successful seed investing? What insight development did Ann believe Lyft had? How had they approached customer development in such a unique way? What are the leading signals to Ann today that founders really understand the customer development process? What questions does she ask to discover this?

3.) Why does Ann not engage in the compression of fundraising timelines today? How does she build relationships of trust and honesty with founders so early? Does Ann worry that founders have such large capital injections too early today? Why should employees examine capital efficiency, not capital raised? How does Ann advise founders on pre-emptive rounds?

4.) How did Ann and the Lyft team approach prioritization in the early days? In what ways did Lyft decide to "play their own game" when it came to the competition? How did Uber and its growth impact the financing strategy for Lyft? In what deliberate ways did John and Logan set the culture for Lyft? What have been Ann's biggest lessons from them on culture building?

5.) Does Ann believe that capital in itself is a competitive moat today? What does Ann believe needs to be proven before capital can be used as a weapon to win? In the case of Lyft, what signals or measurements did Ann define as guiding metrics for success? How did they change over time? How can founders determine their own in their businesses?