Over the last few years, I’ve come to believe that the strongest startups and VCs are those armed with a strong thesis.
Why? Despite common belief, a thesis is not most important when founding a startup or deciding to fund one — those decisions always have a thesis of some degree behind them. No, a strong thesis comes to your advantage during the difficult times of a startup’s life: trying to figure out the next move, when there are a thousand options; or, deciding whether or not to follow-on in a new round, when things on paper look less than ideal.
Take this video (above), where Sam Lessin, Founder and CEO of Drop.io, dives into the thesis behind his company.
Sam is the model thesis-driven-entrepreneur. Drop.io isn’t just an arbitrage between a great UI and cheap cloud storage — that’s the Drop.io that competes with every other file sharing/transfer service on the Internet — Drop.io is a belief and investment in how the Web works today and how it will work in the future.
And what’s the result? Just last month, Yahoo! developers decided to integrate Drop.io into their massively popular Yahoo! Mail solution — giving Drop.io access to tens of millions of new customers every day — solely because the company had been built around a thesis to provide just this service (again, view Sam’s video to understand just what this means), and Yahoo! developers took notice.
In the VC world, no one (who I know) is more vocal about thesis-driven investing than Union Square Ventures. In the comments of a recent post on AVC, (Hunch co-founder) Chris Dixon and Fred Wilson had a great debate on the merits of thesis-driven investing in which Fred declared, “you’ve gotta have a thesis that is well articulated and well understood among the partnership. that’s what Brad Burnham does for USV and it is why we are doing so well right now.”
If what Fred says is true, it’s been Brad’s thesis and Fred’s gut that said Delicious, FeedBurner, Tacoda, Etsy and Twitter would be great investments, and — knowing the roles each play in the firm — I’d have to agree.
But moreover, it will be the same gut and the same thesis which will cause them to see Tumblr, Disqus, foursquare, AdaptiveBlue, and their other portfolio companies, through to their respective successes.
Case in point: Disqus (disclosure – AnyClip is a premium client). Since their launch, Disqus has done quite well in terms of adoption. However, to all those whose first question is “What’s your business model?” Disqus’ success has seemed less obvious.
This is because Disqus is another thesis startup, and the investment in them — and continued support — is also purely investment driven. In an interview with John Battelle at the Conversational Marketing Summit, Fred pointed out exactly how strange such investments can seem:
Disqus which is a company that a lot of people scratched their heads about why are you messing around with a blog comment service? I think blog comments are very important piece of the social media landscape. I think of, sort of the four big channels in social media as Twitter, Facebook, blogs and blog comments and Disqus is the leading provider of third party comment system on the Web.
While I can’t disclose exactly how Disqus is going to bloom into a full-fledged company, I can tell you they’re on track and will be a killer company. Over the past two years, they’ve exhaustively executed on their thesis, and — just like Drop.io — are beginning to see the fruits of their work.
Meetup.com is another thesis-driven startup and another example of a thesis driving a company into the top echelons of Internet success, all the way to profitability.
As a closing thought, I feel like I should defend my ardent support of thesis-driven VCs and startups by explaining AnyClip’s thesis.
First a disclaimer: AnyClip is unique, in a sense, because it’s a relaunch of a earlier company. While I can’t speak for the original founding vision of the company, when I arrived with Aaron and we founded AnyClip, the thesis we extracted from the old company and took with us into the new one was that “Movie Moments Matter.”
Since then, as AnyClip has become our own, our thesis has evolved. Today, the thesis more or less goes like this:
“The long-term value of content is proportional to the amount of metadata about that content which empowers people to relive it.”
This thesis (which I’ve just tried to articulate for the first time — meaning I’m allowed to amend in the future), gives us a single-headed mission to create as much metadata as possible about moments from films, and the tools (API) to make sense of it.
Our success, and the success of other startups, will be directly due to our ability to move forward with our thesis.