Invest Like The Best
Episode 42 Building Something People Want to Buy
Invest Like The Best

Episode 42: Building Something People Want to Buy

Building Something People Want to Buy

Andy is the co-founder and CEO of Wealthfront. Previously he co-founded and was a long-time partner at Benchmark Capital. We cover Benchmark's founding strategy, product market fit, and Andy's transition from venture capitalist to operator at Wealthfront.

[00:02:36] – (First question) – Benchmark's partnership set-up and how they came to be 5 equal partners 

[00:07:57] – Why benchmark would not take on the chairman role in companies they invested in 

[00:09:28] – What made John Doerr the greatest capitalist investor ever

[00:11:59] – Looking at the venture process and what made an attractive investment for Benchmark, using eBay as an example.

[00:18:06] – If you are willing to help other people, without an expectation of return, it can create other opportunities

[00:20:08] – Andy explains the idea of product market fit, a term he coined

[00:22:18] – How does one go about finding product market fit

[00:25:55] – What are the components of the growth hypothesis

[00:26:51] – Why you can learn more professionally from success vs failure 

[00:28:13] – What it’s like to shift from venture capitalist to operator/CEO 

[00:30:24] – The rate at which technology gets adopted and what will help Wealthfront

[00:31:26] – Diffusion of Innovations

[00:32:38] – What does it look like to innovate on top of current platforms

[00:41:07] – Will platforms like Wealthfront help to democratize access to private markets

[00:44:23] – Kindest thing anyone has done for Andy

Building Something People Want to Buy

Introduction

Patrick
My guest this week is Andy Rachleff, who is the CEO of the automated investing platform Wealthfront. Andy was also the co-founder and long-time partner at Benchmark Capital, one of the most interesting and successful venture capital firms in the world. We spend most of our conversation discussing venture capital investing and entrepreneurship. Andy coined the now ubiquitous term “product/market fit” and has great insight into how investors and entrepreneurs should think about business. In that vein, we discuss both what we refer to as the value hypothesis: building a product or service that customers love, and the growth hypothesis: scaling that product or service to a large market. We finish our conversation by talking about Andy and his team's mission at Wealthfront, and this conversation is perfectly timed, as Wealthfront just released a new feature that allows investors to buy factor portfolios, similar to Smart Beta ETFs.

Above all, I'll remember Andy's advice to put the gun in the other person's hand - a strategy we explore in the middle of our talk. We start our conversation discussing what has made Benchmark Capital so successful, which started with how the founders thought about their competition. You can find show notes for this episode at investorfieldguide.com/andy. And now please enjoy my conversation with Andy Rachleff.

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