We recently spoke with Jean-Francois “Jeff” Clavier, founder and managing partner of SoftTech VC, one of the most active seed-stage investors in Web 2.0 startups. He invests from a $15 million fund, investing from $100K to $500K in companies, generally alongside other funds or angels, making up a total of $750K to $1.5M per venture. He invests in consumer Internet companies working in areas such as social media, communities, search, gaming, and consumer infrastructure, almost exclusively in Silicon Valley.
Listen to the Interview
Download the MP3.
Questions and MP3 Guide
Question: Some people, including Guy Kawasaki, are saying that we’re in a time when venture capitalists may be least needed because of open source, a lot of available talent, and lower costs.”
What is the role of seed- and early-stage investors when a website plus traction becomes the pre-funding milestone?
Answer: skip to 0:58 in MP3.
Insight summary: If your venture has revenue from the start, you may not need VC funding. But if you follow the scale-first monetize-later model, you will need VC funding. Scale (the network effect) is the only barrier when the technology itself is so simple and inexpensive.
Question: The iPhone is an area in which many investors are keen to invest. What about Android? Where are the opportunities in this market? What signs are you seeing that this market is or is not taking off?
Answer: skip to 4:25 in MP3.
Insight summary: Android shipments hit around 8 million, compared to 32 million for the iPhone, so it’s a sizable market already. Listen to the podcast to hear about issues related to porting apps between mobile platforms. Jeff is involved in Tapulous (Tap Tap Revenge), so he knows this market.
Question: Are you seeing opportunities in semantic Web? In which markets?
Answer: skip to 9:13 in MP3.
Insight summary: Jeff is a consumer Web guy, so the business uses of the semantic Web are not his interest. He pointed out that he saw the first demo of Twine in 2003, so these things take time. He had interesting things to say about “sentiment analysis,” which mines social media chatter for meaning that can be used for market research.
Question: One investor recently remarked that “information arbitrage is dead,” killed by the Internet. Any new concept or market or opportunity is out on the Web so fast that entrepreneurs don’t have the window of opportunity they used to have. Are you seeing this? How can entrepreneurs counter this? Is there room for contrarian plays?
Answer: skip to 14:20 in MP3.
Insight summary: Jeff stressed three things:
- Execution is everything,
- Network effects are what give you proprietary advantage these days,
- Once you get to scale, the switching costs are high.
Foodzie
Jeff was given the opportunity to give a shout out to one of the companies in his portfolio. He said that many of them are in stealth mode, so he preferred to get our taste buds salivating by directing us to Foodzie.
For more on Jeff, check out the interview we did with him and another early-stage investor, Dave Hornik, back at the DEMO ’09 conference.
Listen to the Interview
Download the MP3.
