Venture capitalist Harry Stebbings on getting into venture

There were quite a few memorable scenes from The Social Network, the 2010 movie that chronicles the inception of Facebook – and the lawsuits that followed. There’s the initial whirlwind of a breakup that leads to the highly problematic Facemash.com, the moment Saverin confronts Zuckerberg for being cheated out of his shares, the perfectly delivered “drop the ‘the.’ Just Facebook.”

But it was none of those scenes that lingered on Harry Stebbings’ mind. No. What the soon-to-be podcast host and venture capitalist calls to mind is a somewhat forgettable scene where Peter Thiel becomes Facebook’s first major investor. It was the first time Harry came across venture capital, and, he tells us, he was instantly hooked. He read everything he could on VCs and, as an 18-year-old, started The Twenty Minute VC, a podcast that has, for the past eight years, picked the brain of over 200 of the world’s leading venture capitalists and startup founders and has been downloaded over 100 million times. Not long after starting the podcast, Harry got into investing himself, and in 2020, he leveraged the success of his show to launch his own venture capital fund, 20VC fund.

Back in July, Harry interviewed Intercom’s Co-founder and Chief Strategy Officer, Des Traynor, on the origins of Intercom, common startup myths, startup strategy, and his approach to angel investing. Now, we’re going the other way around.

In today’s episode, we sat down with Harry Stebbings to chat about getting started on a new project, creating content, and the current landscape of venture capital.

If you’re short on time, here are a few quick takeaways:

• When getting started, tie a financial commitment to the first step. Once you’re in, it’s just like going to the gym – you‘ll be terrible at first, but you’ll get better over time.
• Distribution is key. Build a community of brand ambassadors to promote your content and leverage the interviewees’ networks for wider reach.
• Channel specialization is more important than ever. Different channels come with different audiences, purposes, and specificities, and distribution strategies should reflect that.
• When it comes to podcasts, it’s better to start super specific and build a true fan base, knowing you can always expand later on.
• We’re going through a challenging time for venture capital – from price inflation to multi-stage players flocking to safer investments.
• There’s no right way to do venture. Lean into your strengths – whether it’s an analytical eye or a love for building connections – set up your network, and do the work.

If you enjoy our discussion, check out more episodes of our podcast. You can follow on iTunes, Spotify, YouTube or grab the RSS feed in your player of choice. What follows is a lightly edited transcript of the episode.

Falling in love with venture capital

Liam Geraghty: Harry, you’re very welcome to the show. Delighted to have you.

Harry Stebbings: Yes, it’s good to be here, Liam. Thank you for having me, my friend.

Liam: Okay, so I want to start by saying that when I was 12 or 13, I was watching the special edition re-release of Star Wars when it came out in the cinema again and pretending to have lightsaber battles on my way home. That movie had a massive impact on me. For you, a very different kind of movie was a big inspiration. I’m wondering what it was.

“I believe that people become more important than firms and that distribution is more important than ever. So why didn’t I interview these people?”

Harry: I mean, that sounds a bit dodgy, mate. I was 12 or 13 when I saw the Social Network, the hailed movie about Facebook’s growth story. I saw Peter Thiel invest in Facebook from his hedge fund, Clarium Capital, which is a scene that everyone else forgets, and it’s completely forgotten in the movie. But it was the first time a little kid in London like me had ever seen venture capital. I went home, read everything I could on venture from the early writers – remember, this was when venture was not cool, when there were very few writers, so Brad Feld, Roger Ehrenberg, David Hornick, Mark Suster – read all of their blogs, and fell in love with venture even more.

When I was 18, I was faced with the prospect of law school and thought, “Well, I want to be a VC.” I believe in the personalization of capital. I believe that people become more important than firms and that distribution is more important than ever. So why didn’t I interview these people? Hopefully, I’ll be charming enough, and then one of them will give me a job. I did that, and believe it or not, it worked. My first job was as an entrepreneur in residence. I can’t wait to have children one day and tell them that.

“It gives you this breadth of learning, and with the people that you work with as well, not only the material itself”

Liam: If we jump back a bit, what is it about VC that you really love?

Harry: Yeah, honestly, for me, it’s the ability to do many things in a day. I get quite bored doing one thing only. I used to run just the media company 20VC. I love media, I love content, and I love the team here. But just doing that, you don’t learn at the same rate as I do when I invest as well. I’m learning about health tech. I’m learning about the next generation of GPT-4. It gives you this breadth of learning, and with the people that you work with as well, not only the material itself. I learn from the founders that I invest in. Hopefully, they learn from me too. But the breadth of exposure that you see is unparalleled. I love investing. People are like, “Oh, Harry, the podcaster who invests as well.” No, you don’t get it. I fundamentally leverage media to be a better investor. I did media to invest. I didn’t happen to move into investing.

Getting over the initial hump

Liam: Can you help me connect the dots between that initial boyhood inspiration to deciding to set up the podcast?

Harry: Well, honestly, I read all these blogs, and I was like, “Wow, there’s actually a generation of really awesome investors.” I mentioned some of them there. When I go on Tim Ferriss or any of the mainstream media channels, I see Ben Horowitz or Marc Andreessen, and they are fantastically smart, wise individuals, but there are many more. Why aren’t we covering this generation of very interesting people who’ve seen booms and busts and incredible company growth like I haven’t and many haven’t? Why are they not being interviewed? There’s this generation of unloved investors – I know it’s very different now – that are not getting any interest or exposure, and there’s a lot we can learn from them. So I went and thought that I’m going to do it. Honestly, I think the most important thing is the first step. So many people fail in life because they don’t take the first step. And it’s important to tie the first step to a financial commitment. I remember buying the domain name, and it was like 30 pounds. Liam, when I was 18, 30 pounds was not…

Liam: Yeah, it was a lot.

“You have to get over that hump and appreciate that you will probably be embarrassed by your first V1, and you will get better over time”

Harry: And then I bought a microphone for 50 pounds. I mean, now I’m in. That really made a difference to me. The biggest frustration to me, Liam, and it is so annoying, is people who say, “Oh, Harry, you’re great at content. You’re great at the show, but it’s just not me. I could never do that.” No, that’s absolutely a cop-out. I’m sorry. It’s pathetic. The truth is I was terrible too. It was the first show and I had no idea what I was doing. I sounded like a BBC newsreader from the sixties. It’s like going to the gym. You put the reps in, you get better and better and better, and you keep practicing and doing more and more. You get rewarded in public for what you do in private – it’s just important to put those reps in.

Liam: Yeah, you’re absolutely right because that’s the thing I get asked the most. You get sick hearing your own voice. But after a certain point, you don’t even hear it anymore. It’s not like that thing when you were a kid and you record yourself and you’re like, “Oh, I can’t believe I sound like this.” Once you get over that hump, it’s way more smooth sailing.

Harry: Yeah. But you have to get over that hump and appreciate that you will probably be embarrassed by your first V1, and you will get better over time. My mother’s now becoming a Pilates instructor, and she’s really fucking nervous. I’m like, you know what? You probably will be quite bad when you start. She’s like, “That’s not the advice I thought you were going to give me.” And I’m like, “No, but you will get better and better and better, and you will look back and realize that you’ve grown and developed, and that is how we are. Just keep going.”

“Every month, send them three deals that are aligned to the stage and sector they invest in with a paragraph on each on why you specifically think it is interesting”

Liam: A lot of VCs that we hear about fell into it, but would you recommend people be a little bit more strategic about it?

Harry: Yeah, one thing I also don’t have any time for is, “Oh, I really want to do venture, but I don’t know … It’s really difficult to get in.” No, it’s fucking not. I will tell you the secret to getting into venture right now. I guarantee you no one will do this. I will give anyone listening a job if they do. Number one, look at profiles of investors that you want to work with. Find five. Look at the types of deals that they have done. You can see stage, sector preference, lead, not lead, board seat, not board seat. And then, every month, send them three deals that are aligned to the stage and sector they invest in with a paragraph – I’m not asking for a memo – on each on why you specifically think it is interesting. Do that for six months running, 18 companies. I guarantee you – if you do that to those five people, you will get at least two job offers. If I got that for six months, I would give someone a job at the end. I’ve tweeted it. I’ve told people. No one has done it. People don’t do the follow-up.

Liam: Well, this is it. We’re putting it out there now. Anyone listening, now’s the time to do it. What was it like when you started? What was the actual interviewing like? There must have been some apprehension about talking to all these figures from the world of tech and VC.

Harry: Do you know what? I always found it much more nerve-wracking speaking to my own age group. I wasn’t really very nervous. When I was 20, I was terrified of going to a party. Oh, I couldn’t do that. I’d still be a little bit apprehensive now, actually. But getting on a call with Guy Kawasaki, who was my first interview, or any of the other early interviews… honestly, we had an agenda, we had a shared passion up front and topics we wanted to discuss – it was kind of set. I think I’ve always grappled with insecurity. I was very obese and fat when I was young and had eating disorders. I’ve always felt not good enough socially with my own age group. No, I didn’t get nervous there. Again, I think you just get used to it with the reps.

Content that stands out

Liam: Yeah, for sure. In terms of podcasting, I’ve been podcasting since, oh, I don’t know, 2007. It seems like it’s taken a long time for podcasting to catch up with the rest of the world. Why do you think it resonates so much in the tech space?

Harry: Well, one, it’s inherently aligned to tech. We understand the app. We understand the distribution channels. People forget everyone in tech is just always permanently on Twitter, pretty much. Most other industries are actually not. I think that’s one thing. Honestly, though, with podcasts and content more broadly, people fundamentally don’t understand the right ratio of distribution to creation. I think that if you spend an hour creating content, you should spend three hours distributing it. What does that mean? You interview me today, right? I’m on several boards. You should send it to all the founders that I’m on boards with, to the other board members I’m on boards with, and to my many team members in the media company and the fund. You have to look for people who are incentivized to share a piece of content. You have to build a community of ambassadors that will promote your content for you.

“Channel specialization is more important than ever”

Then, when it goes live, you send it to them and personalize it. You do the 595. “Hi, Liam, I hope you’re well and the kids are great,” blah blah, personal, a little bit about the show, and then at the end, you say, “Send my love to Des at Intercom. He’s such a great guy.” Then you’re like, wow, fantastic. Now, you’ve just added 40 people who will promote your show. That’s really, really important. I don’t think people get the right idea in terms of the ratio of creation to distribution.

People don’t understand channel specialization, especially today. I see all these companies with marketing teams and they’ve got a social media person. Well, how ridiculous. What it takes to win on TikTok is so different from what it takes to win on LinkedIn or what it takes to win on Facebook. We have individual teams that are absolute scientists at all of them. I always joke that we’re a podcast and most of our people should work at NASA, which might be a misallocation of today’s bright minds and resources. But channel specialization is more important than ever.

“The massive problem that people make is they’re not specific enough. So many people say, ‘I’m starting a podcast on entrepreneurship.’ What? That’s terrible”

Liam: Has there been a podcast in space yet? Maybe you could be the first person to do that.

Harry: I would love to. If Elon wants to do it with me, I’m game.

Liam: And as you were saying there, anyone starting a podcast seems to have this dream of instantly making a fortune from it, which is obviously a lot harder than people think. What approach did you take to monetizing The Twenty Minute VC?

Harry: Well, number one, unless you have an existing brand or distribution channel, as some do… I didn’t make money for two years. I think it took two years before I gained 2000 plays per show, which is not very much. It’s about 300 shows. People fundamentally give up too soon. It will take two years or 18 months before you will actually be able to make money on it. Two, the money you make on it will not be great. I hate to break it to you. Three, the massive problem that people make is they’re not specific enough. So many people say, “I’m starting a podcast on entrepreneurship.” What? That’s terrible. Do you know what it should be? I’m starting a podcast on zero to one in terms of gaining your first 100 customers. I’m going to tell the stories of the greatest companies in the world and how they gain their first 100 customers, or I’m going to tell a story of how the biggest D2C brands form partnerships with the biggest traditional retailers. Super specific.

“I never did it for the money, Liam. I still don’t do it for the money. I do it because I love it”

If you get 1,000 true fans in that sense, trust me, you can expand and add ancillary products. If you look at us, we did 20VC. Now we interview founders. Now we have 20 sales, 20 product, 20 growth. We eat more and more of the operator slack, and now we get around 25 million downloads a month. Start super specific. Don’t expect the money. The payback period is long. I’m very good friends with the first sponsor ever. A hiring company in Hong Kong paid me $5,000, and I felt like the richest man in the world.

Liam: It’s funny because people think they’re going to do their first episode, and “where can I get my first sponsor to give me that money?” And as you say, their idea is just like, “I’m just going to interview interesting people.” That’s the pitch. There’s nothing beyond that.

Harry: I never did it for the money, Liam. I still don’t do it for the money. I do it because I love it. I think it’s an important thing to understand your reason for being. I don’t know if you’ve read the parable of the businessman and the fishermen. There’s a fisherman lying on a beach, he’s smoking, he’s got a beer, and he’s looking out at the beautiful sea. This businessman comes to him and says, “What are you doing lying on the beach? You could be out fishing and making more money.” And he goes, “And then what would I do?” And he goes, “And then you could hire more fishermen, catch more fish and make even more money.” And the fisherman goes, “Huh. And then what would I do?” And the businessman goes, “And then you could buy a big ship, catch the most fish ever, IPO the company, make a ton of money and then you could lie on the beach, have a beer and a cigarette.” And the fisherman goes, “And what the fuck do you think I’m doing now?”

The point of me telling that story is that there is no other way I would rather spend my time than the way I have done today. I just went for a walk with my mother. I had a great board meeting earlier. I had a great meeting with the new investment that we’re making. I’m having a great chat with you now. I’m doing an interview later. That is my reason for being, and it helps inform a lot how I spend my time.

A changing VC landscape

Liam: That said, you’ve interviewed an insane amount of people on your show. What are some of the biggest lessons you’ve learned from your guests? As you say, that’s why you wanted to talk to them in the first place.

Harry: Wow. “What have you learned from 3,000 shows and 90,000 minutes?”

Liam: Yeah, if you could condense that into a 30-second clip.

Harry: Well, the irony is you learn that there’s no right way to do venture. Everyone has their own way. I made this mistake early on in my venture career. I thought I had to be analytical. I thought I had to be numbers-based. And you know what? I’m shit at numbers, and I’m shit at cohort analysis. But that’s not me. Me is having the biggest network in the world, having the best switchboard for connecting the right people at the right time, loving true interactions, having deep and meaningful conversations with people, and winning the entrepreneur eye-to-eye. That’s me. Lean into your strengths. I think this with hiring, too. I look for the pointiness in people. I don’t care if you’re shit at nine out of 10 things – what are you really fucking world-class at? I’m going to double down on that. The truth is not many people are really world-class at something. That’s what I always look out for.

What have I learned beyond that? No one’s really free. The only people who are really free are those who don’t have a boss. You’ll look at all these famous VCs. They all have a boss. They all have LPs, and they are our bosses. Then you look at people like Emil Michael, the former chief business officer at Uber, who had an amazing show with me. He does not have a boss. That meant he could say pretty much whatever he wanted, and he was fantastic. Everyone has a boss.

“I want you to leave and go, ‘Wow, that was interesting. That was fun. I’m going to remember that meeting.’ It’s how you make people feel that is important”

I’ve also learned a couple of things that have been imbued on me by some of the guests. One is you’re never wrong to do the right thing. In every tough situation, I’m like, “Well, what’s the right thing? Okay, that’s hard. But I’m not wrong to do it.” I also got taught – I can’t remember if it was Howard Marks or Bill Gurley or Michael Eisenberg – that nothing’s ever as good or as bad as it seems. This too shall pass. They were talking about markets and market downturns, which I think about often. There are a lot of tidbits that have really informed how I think.

One of my closest mentors, Mark Evans, taught me one. It’s not from the show, but I love it. It’s a Maya Angelou quote, “It’s not what you say. It’s not what you do. It’s how you make people feel that is important.” And the truth is, Liam, in every meeting, I want you to leave and go, “Wow, that was interesting. That was fun. I’m going to remember that meeting.” It’s how you make people feel that is important.

Liam: Something you mentioned there, “this too shall pass,” makes me think of the tech landscape – it’s obviously changed dramatically in the past few months. How is the downturn affecting the VC space?

Harry: It depends, to be quite honest. It depends on what stage you are in, and it depends on what your LP structure is. If you are in a tier one brand or have tier one LPs, you’ll continue to deploy as you always have done because you have no fear of fundraising again. You know that if you come back next year, no matter what macro environment we’re in, you’re still going to be able to raise. You’re going to deploy probably a little bit more cautiously, but you’re going to continue to deploy. Very luckily, that’s where 20VC is. We’ve got great investors, so we’re super lucky. It’s important to always remember that, fundamentally, investors have to continue investing throughout market cycles.

“For series C and D, all the multi-stage funds are like, ‘You know what? I don’t need 10x right now. If 2x to 3x is more secure, I’d rather have this’”

But then there is another class of VC, which is, bluntly, where you’re not sure that you’re going to be able to raise your next fund. That’s a very challenging environment, and you do pause deployment in a lot of ways. We’ve seen that a lot.

You see price inflation in some weird areas. A lot of multi-stage funds have moved earlier and earlier because they still want to deploy capital, but they don’t want to deploy a 25 million series A. And so, they’re much less price sensitive, they’re increasing the supply of capital at pre-seed and seed, so the price is actually going up – frustrating and challenging. With Series A’s and B’s, it’s difficult. The best companies are getting their rounds done by internal, existing investors. Those that are raising probably don’t have the support of their internals, and they’re not the 0.11% that we want to be investing in. Then, for series C and D, all the multi-stage funds are like, “You know what? 2x, 3x, I will take that safety. I don’t need 10x right now. If 2x to 3x is more secure, I’d rather have this.” We’re seeing this kind of flight to safety from the multi-stage funds to the 2x to 3x, which is causing price inflation from there.

It’s a challenging time to be investing. The other day, I said to our team that I think the worst time to be investing will be the next six months. But I think the next five years will be the best. We have not had global problems like we do today, Liam, for hundreds of years. The world is in a really, really challenging situation. But technology is the only salvation. If that is the case, we should be best positioned to invest in a golden age of innovation.

“I think the people you surround yourself with is who you are and who you become”

Liam: What’s next for you? Do you have any big plans or projects coming up? I know you always have something on the go.

Harry: I mean, it’s so many. Honestly, it’s very simple. I want to continue loving what I do every single day as I always have done and continue working with amazing people I respect and admire. I think the people you surround yourself with is who you are and who you become. Ensuring that I love and respect my team. I’m not into a lot of the new-age woke management techniques, but it’s really important that my team feels safe. They can come to me with anything. I love leading them. I didn’t expect to enjoy leadership; I thought it was boring and that it gets in the way of execution. I want to build the best, highest-performing team. I think we’re 1% of the way there, and you just got to keep fucking fighting.

Liam: Brilliant. Well, listen, Harry. Thank you so much for joining me today. It’s been a pleasure.

Harry: Man, it’s been great. Thank you so much for having me, and I really enjoyed it.