Our mindset
Every venture investment has two parts:
First, an implied complaint about the current state of the world. Productive dissatisfaction with the status quo is the wellspring of innovation and creativity. People with a keen eye for what's broken and needs fixing make the best entrepreneurs, especially when it comes to applying technology to solve business problems.
Second, a deeply optimistic belief that the complaint can be remedied. We know the world can be changed - improved - because we experience the improvements every day.
These ideas are simple and widely-shared. The challenge that we accept as investors is to provide the capital and advice to turn complaints and beliefs into results.
There are a few other things that we think about all the time:
Magic
Magic to us is when something just works. Magic is product/user fit. Magic is adoption without friction. We seek to invest in entrepreneurs who pursue magic, because whenever magic is made available for sale, everyone wants to buy it.
Value
We look to invest in companies that want to provide the most value possible to the customer. Stewart Butterfield at Slack constantly talked about giving the customer value that was worth many times what they paid for the product. That's the mindset we look for, and it's also what we strive to add to the companies we back.
Usage
The best products are the ones that are used the most. When customers enjoy being in your product, you have the ultimate moat.
Perseverance
Building anything is tough. Building something new in the world is even tougher. New things invite scrutiny and negativity from entrenched incumbents and their usual army of allies, as well as from the natural forces of inertia. The world usually rewards stamina and grit, and we always want to invest in it.
Risk
It's impossible to innovate without risk. We remind ourselves of this every day, because we are putting our own and our investors' money at risk. We are very comfortable encouraging entrepreneurs to take the most value-biased risks possible, even if those risks are high.