Invest Like The Best
Episode 312 The DNA of Software Companies
Invest Like The Best

Episode 312: The DNA of Software Companies

Invest Like The Best

Episode 312

The DNA of Software Companies

Miles Grimshaw is a General Partner at Benchmark. We cover his biological approach to investing, the differences between pure API companies and other software businesses, and why software development is as much art as it is science.

This episode is brought to you by:

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[00:02:57] - [First question] - His notion of the investor as a biologist or a physicist

[00:05:24] - Why he seeks out new companies with unique business models

[00:07:53] - How his investments are based on present and future needs in the market

[00:11:55] - Evaluating the genetics of a nascent or small company

[00:13:38] - The half-life of information as it flows through a company or platform

[00:17:26] - Unpacking how software companies can survive re-evaluation periods

[00:21:03] - The power of environment creation and facilitation

[00:25:10] - The importance of user conferences

[00:25:45] - A company’s potential for a differentiated second act as a sign of good genes

[00:30:21] - Product quality, timing, and reinvention in tech startups

[00:33:10] - Why it’s crucial for companies to avoid copying their heroes

[00:37:41] - Breaking down market perspective on pure API companies

[00:41:29] - His views on software targeted to vertical versus horizontal markets

[00:44:29] - Carefully leveraging relationships with core customers

[00:48:06] - Operational lessons from his experience with the companies he’s invested in

[00:50:26] - His maxim that software development is as much an art as a science

[00:51:12] - His idea of a product magician in the software industry

[00:52:19] - Effects of new products and categories at the forefront of the space

[00:58:21] - How software founders should prepare for 2023

[01:01:41] - How both market structure and product shape the genetics of a business

[01:04:32] - The challenge of pricing and packaging for SaaS companies

[01:06:42] - Cardinal sins in software investing

[01:07:42] - The kindest thing anyone has ever done for him

The DNA of Software Companies

Introduction

Patrick
My guest today is Miles Grimshaw. Miles is in his early 30s and is a general partner at Benchmark. His experience and success belie his age. He was an early investor in Segment, Benchling and Airtable, all before they had 30 employees. I have learned a ton for Miles about software investing, and that's why I was excited to have him on the show.

We discussed his biological approach to investing, whether pure API companies can be good businesses and what most has his attention right now. Before we transition to the episode, I want to highlight the Founders podcast, which is part of our Colossus network. David Senra, who hosts Founders has devoted his life to learning from history's greatest entrepreneurs. And every week, he distills the lessons of a different founder.

If you want an entry point, I highly recommend starting with Episode 136 on Estée Lauder. I hosted David on Invest Like the Best this summer, and it's hard not to walk away insanely energized after listening to any episode with him. You can find a link to Founders and that episode in the show notes of this conversation, and you can search all past transcripts on our website joincolossus.com. Please enjoy this conversation with Miles Grimshaw.

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