The Most Successful VC Firm In The Last 5 Years Lays It All Out For Startups

andy weissman

Photo: Twitter

Andy Weissman, a partner at Union Square Ventures, laid out his firm’s investment thesis this morning.USV has invested in grand slams like Zynga and Twitter. It is also an investor in Tumblr, Etsy and Foursquare.

Weissman’s colleague Brad Burnham tweeted the essence of the firm:

“Large networks of engaged users, differentiated through user experience, and defensible through network effects.”

Weissman elaborates and says what kinds of startups the firm is looking to invest in.

‘Large‘ obviously requires scale but it can also mean large relative to a specific problem set or community,” he says and uses Twitter, Stack Exchange and Behance as examples.

“‘Networks‘ are of course interconnected groups or systems,” says Weissman. “They can be centered around person-to-person sharing of activity, facilitating a transaction, enabling creativity,” and more.

As for user experience, USV cares most about “novel web and mobile native interface ways to engage users around a solution to the particular problem.” Weismann notes Foursquare’s check-in and lessons completed in Codecademy as good, unique measurements of behaviour.

“The last component of this thesis relates to businesses that create barriers to entry through “network effects“, in which the value of a service to a user increases as others use it,” writes Weissman. Twitter, of course, is a great example. It’s scale — about 500 million people have accounts — makes it hard to successfully replicate.

For more on how USV invests in startups, read the full post by Weissman >

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