I had a quiet moment last week and got thinking about the deals we pass on at work that go on to do well. Kinda like the Bessemer Anti-Portfolio (https://www.bvp.com/anti-portfolio/).
When we turn deals down, there is usually a solid reason: we weren’t sure about the team, we weren’t sold on the product, we weren’t convinced about the market.
But we, like all VCs, get it wrong (statistically, a lot of the time).
And that got me thinking about MyFitnessPal. Ohhh, MyFitnessPal. To me, that is the business which proves VCs really don’t know what will win a lot of the time.
If you are VC, sit there and think for a second. A seed stage business comes through your door with a product. The product doesn’t have a clear monetisation strategy. User numbers are low, as the product is new. What is the product? An app to allow you to record what you eat, including calories and macros. There are other apps out there doing this – they aren’t doing brilliantly well.
95% of VCs would turn down this deal. I mean, it looks like most of the deals you turn down that end up getting wound up 12 months later!
But MyFitnessPal? Oh no, buddy. This achieved a $475m exit. Didn’t see that one coming, did ya?
Kleiner Perkins and Accel did their $18m Series A (their last funding round). But I bet tons of great VCs turned them down at Seed, before the fast user number growth could be used to show product-market fit.
So next time you turn something down at Seed that does well, just think, “that was my MyFitnessPal, damn”.
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