Around two thousand companies are founded in the UK every day, which means whatever obvious problem you're solving, a thousand others are probably chasing it too. In that environment, defensibility stops being a nice-to-have: when investors pass on a company, competition and a lack of moats are among the most common reasons why. Yet, as Slack losing users to Teams shows, even a superior product can be overtaken without a durable advantage.
Distilling insights from over five thousand pitch decks and conversations with fellow investors, Ada Ventures co-founder Check Warner offers six practical lessons on building moats. You can't have real moats at seed, she argues, but you must show intent and out-execute everyone; the best moats deepen over time through network effects and switching costs, and turning your brand into a verb, tackling genuinely hard problems, and serving overlooked markets all buy defensibility that's hard to copy.
Auto-generated transcript - may contain errors. Tap a timestamp to jump the video.
Welcome back. So we're going into talk number two of the day. And we're switching into our lead track. We're going to be talking about strategy in building businesses and building products. And something I think that gets overlooked sometimes, which is the idea of defensibility, and how moats can be built.
So guiding us on this journey is going to be check Warner checks, a former Turingfest speaker, which I think she's got she'll mention in her in her talk. But since she was here last time, so previously, she co founded diversity VC, which was a fund, not a platform rather to look at diversity in the startup landscape in in the UK and beyond.
They've done some great work. But also then she's raised her own fund. She's a co founder of Ada Ventures, which she'll talk a little bit about as well. So let's get straight into it with check Warner and hear about building moats. Hello, I am really excited to be here today talking to you about digging moats Six Lessons on Startup Defensibility after reviewing five thousand pitch decks for Turing Fest twenty twenty.
Super excited to be back here actually, because I was here two years ago and obviously I was there in person, which was wonderful. And I'm kind of sad just to be sitting here in my bedroom talking to you and not being able to see all of you here watching this, but I hope that I can still tell you some interesting things that will be helpful as you're building and working in the companies that you're in.
So who am I to start with? Well, my name is Chek Warner. I'm the co founder of a fund called Ada Ventures. And last time I was here speaking to you, we hadn't actually launched the fund yet, so I couldn't talk about it.
But we have now. And it is a thirty million pounds pre seed and seed fund. And we invest in overlooked founders and overlooked markets. And I've worked now in venture for the last five years and over that time I've invested in about forty companies.
And I was working out before preparing for this talk that I've actually reviewed over five thousand pitch decks. So I'm going to try to distill all of the knowledge and all of the insight that comes from those five thousand pitch decks into this talk today.
So Ada Ventures, just a little bit more about us in terms of what we've done. We've so far made seven investments. We've made one investment entirely virtually. We look at about a thousand pitch decks a year. We have some incredible investors in our fund as well.
Yeah, so that's just a little bit about us and so far I can report that we have some fantastic gender diversity and ethnic diversity in our portfolio, which is awesome. So if you are building a company and you think it could be a fit for Ada, please do come come to our website and submit your pitch deck there.
So in the last tax year, six and seventy two thousand eight hundred and ninety start ups were founded in the UK, which I find completely mind blowing. That's about two thousand companies per day. And that is amazing for me as an investor because it shows that there are all these people starting companies that we can possibly invest in.
But on the other hand, it's not great if you're starting a company and you're trying to build a company that's defensible. Because the chances are, if you're working on a problem that other people understand and is fairly obvious, then someone else or maybe a thousand other people globally are probably working on the same problem at the same time.
And there are many reasons for this. There's low code, there's side projects, there's the democratisation of company building. It's now actually really in fashion to start a company. And if I was with you in the room, would ask you all to put your hands up to tell me how many of you have either started a company or have a company on the side or working on a side project or intend to start a company in the future.
And I'm sure that it's a lot of the people in this room, even if that's not what you're actually doing today. And there's now kind of minimal startup costs and there's this global proliferation of startups. And what that means is that defensibility and moats are even more important.
And I see this in Ada Ventures because on Sunday eighth November, while I was preparing for this talk, I just looked into our CRM and we had five sixty eight early stage companies in the pipeline of our CRM at various stages. And in the last thirty days we've actually passed on fifty one opportunities.
We've said no to fifty one opportunities. And the second most common reason for saying no to those fifty one opportunities was concerns around competition and defensibility. So even if you're not a founder, if you're an engineer, a product leader, a marketeer, an HR person, I think it's really important that you understand why defensibility is so critical and how you can build it over time.
So I'm going to talk to you today a little bit about that. And I think that this chart actually sums up all these two charts why even when you've already built a product and you're working on a fairly established company, it's super important to consider moats and defensibility.
So you've probably seen at least one of these charts before from Statista. This one on the left is about Slack. So Slack is a fantastic product and actually Microsoft Teams, many of you will probably not necessarily think is such a great product, but actually has powered past Slack in terms of users.
So they now have twenty million users or probably many more than that, but they did in November twenty nineteen, whereas Slack had fewer of those. And that's because they had distribution. And even though they had a potentially inferior product, actually the fact that they had this distribution meant that they could overtake Slack in terms of user numbers.
Similarly with Instagram, they kind of blew past Snapchat with their stories feature. And more recently they've also launched Reels, which is to my mind a kind of thinly veiled attempt to copy TikTok. So when you're in a big company, you've always got to be, I think, healthily paranoid that someone else is potentially going to come after what you're doing if you're successful.
And I think as you think about building towards exit and the value that you're creating in your company as well, the ability to build something that other people can't just build themselves or can't replicate will increase the value when you ultimately IPO the company or exit the company or get acquired.
So it is a super, super important thing to think about early. So before preparing for this talk I was actually looking around and given this is such an important topic, I didn't actually find very much about this topic that was very helpful. So I tried to aggregate the resources that I did find helpful at the end.
So I've got a kind of reading list and obviously we're doing Q and A as well. But I also spoke to quite a few friends about what good looks like in terms of moats and in terms of defensibility. So I spoke to these great investors and I got their opinions.
So what you're going to hear now is a distillation not just of what I think, but also those investors as well. And the one resource that I think is well worth looking at about defensibility is this article by Guy Kawasaki of Apple, which he actually wrote in two thousand and six, so quite a long time ago now.
But he talks about defensibility and what a good response from a founder would look like when asked about defensibility. And he says 'it requires a combination of clairvoyance, street wisdom, humility, honesty and cockiness. More than anything else, it's a trick question to see what you're made of.'
And we'll go on to explore why it's a trick question, But I think it's a good article, so I recommend that people go after this talk and read it if you're interested in digging in more. And one thing I will also say before we start is I'm not going to talk about hard IP or patents or genuinely unique technology because in software companies, which is most of the companies that I think you're working on and the ones that I'm reviewing, there's actually not many companies that have genuinely
distinctive and unique technology. So I'm not going to talk about that, but I am going talk about all the other aspects. So these are my six tips from reviewing five thousand pitch decks on defensibility. The first is that you can't have moats at seed, but you must have intent to have moats.
The second is that the best moats keep getting deeper over time. The third is to build a moat, you need to build a verb. The fourth is to consider the cost and incentive to switch. The fifth is to work on something hard. And the sixth is to do something overlooked.
So let's dive into the first one: you can't have moats at seed but you must have intent'. So in an early stage company, it's almost impossible to argue that you're doing something that couldn't be replicated by somebody with the same amount of time and the same amount of resources.
However, that doesn't mean you can just ignore the question and just say we're not defensible when you're going to talk to an investor. What it does mean is that you should be thinking about having a point of view on how you build defensibility over time.
And there are some great resources and articles about the kinds of moats that you can build in a company. But one of those, for example, includes regulatory barriers. So develop a relationship with a regulator and lock other people out of that that come after you.
You could create exclusivity with your suppliers and so other people can't work with them. You could create distribution defensibility moat so that you could own a channel that no one else does. Or you can scale rapidly and then build economies of scale, drive the price down and ensure that no one else can compete with you on price.
But I think what investors are really looking for at this early stage are a couple of things. The first is founder market fit when it comes to defensibility. So do you as a founder deeply understand the market, the competition and how you're going to build moats over time?
And this could be some sort of unique insight that you've built up. It could be from a board member or a couple of board members you've brought in that provide you that insight to the market that other people won't be able to replicate easily.
The next thing is about speed of execution. So in the absence of moats at SEED, it's super important to move really, really quickly. So I spoke to Sarah, who's an investor at Northstone and the founder of Fem Street, and she talked about the fact that the main moat that she looks for at SEED is the ability to execute quicker than the competition.
And that applies to bringing in talent. So hiring the best engineers, bringing in product people that will have built something quickly that then other people kind of are going to have to chase to find out and to catch up with you. And speed is the best defence while you have no moat.
So if you're an early stage company, my advice would be if someone challenges you on defensibility, I'd say something along the lines of we're an early stage company, we recognize that other people could replicate what we've built so far. However, using our deep domain experience, we're rapidly building barriers to entry through exclusive contracts with key suppliers And over the next six months, we plan to build these three killer features to further tie in customers to our solution.
So I definitely recommend having a slide in your deck that talks about what your defensibility position is at the moment and then how you build that sustain that over time. One side note around speed: you can have head starts, things that will give you a boost against your competitors to ensure that they can't catch up with you very quickly in the early days.
So if you are building something in a very crowded market and a very obvious problem, for example, if you're building something in the online event space at the moment, you could consider these head starts. They could be things like celebrity endorsements, It could be things like getting a key customer, being on a programme like a TV show like Shark Tank or Dragon's Den to kind of really get the word out there about what you're doing.
And using a good channel which has organic reach that no one else has discovered yet, or a stump for some kind of positive PR. These are all ways that you can get a head start on the competition and then that gives you time to kind of build your moats once you've got the customers on board.
So that's the first tip. So you can't have moats at Seed, but you must have intent to build moats. The second tip is the best moats keep getting deeper over time. Moats should be sustainable. Sustainable competitive advantages are what we're looking for as investors at seed and as companies grow.
So it's not enough that you've got to the problem first or you have a short term advantage. You have to explain how you're going to be able to build that into a sustainable competitive advantage over time. Some ways that you can do that: Could you create a flywheel with customer data where the data from customers that you've got improves the product for each new user?
Could you build a network effect within the product so the product improves with every new incremental user? Or if you're building a marketplace, could you lock in supply by maybe giving away some sort of feature to the supply side of the marketplace and then over time that supply side will have fewer and fewer incentives to switch away from you.
And we saw this very clearly with a company that we invested in called Truva, which created a marketplace for independent boutiques. And what they did was they actually created free software which they gave away to the boutique owners to do management, inventory management.
And that enabled the supply side to come to Trooper first, stay with Trooper, and then over time there was kind of fewer and fewer reasons for them to switch. So that's the next thing. The best moats keep getting deeper over time. So think about how you can maintain that sustainable competitive advantage against your competition.
The third tip is to build a moat, build a verb. So you probably have heard this before, the idea that if you build a company which has a verb, which creates sort of a synonymous language between what you've built as a company and your brand with the actual customer pain point or the job to be done, those companies are usually highly defensible.
So how do you build a verb? Well building a verb is a combination of factors. You need to have a really strong brand. You need to have a sticky, really engaged community. You need to have exceptional customer experience, frictionless use. And companies, famous companies that have done this obviously include Uber, Google.
In my portfolio we have a company that people are using as a verb, which is a company called Bubble, which is a childcare marketplace. So people will say we'll just Bubble it tonight, which means we'll get a childcare provider from Bubble. And I think if you're sitting in a company today and you're thinking about how can we get where we are to becoming a verb that's synonymous with that customer pain point?'
think about whether you can add the words the only' ahead of your company description. Are you the only place for people to get this thing? And if you are the only place, the chances are you already have a very strong defensible position. But a lot of this is about community building, about early adopters, is about customer obsession.
And I spoke to Kieran Hill at Ascension Ventures he's a partner there and a great investor and he said: don't forget about early adopters once you accelerate past product market fit. They're a key piece to building the brand and culture in the early days, and they are embedded in the DNA of the product.
If you lose them, you could lose your way and find it difficult to recover what made the product resonate so well in the first place. So my top tips on this one are: obsess about customers, dog food your product, really deeply understand the customer experience and understand the behaviours around your product, and then create a community around the product as well.
The fourth tip is consider the cost and incentive to switch. Investors often talk about high switching costs and that's one of the things that they look for when they're assessing a company. So think about what keeps customers using your product and also what stops customers from using other people's products.
So the sorts of things you'd be looking for there are again back to community. So if you can build a community, then your customers are paying for more than just the product. They're paying for what they're getting from the community as well. And that's a really difficult, quite intangible thing to build.
But once you have it, it really pays dividends. You could think about providing data and insights pro bono by the company to your customers, which if they lost they would really find it difficult to run their businesses without it. You could think about giving away a key feature for free to lock in your customers to your product.
Or you could think about another kind of switching cost, which is if something is really frictionless and seamless, then there is no incentive to switch. So I spoke to Fred Destin about this, who's an investor in a company called Deliveroo, which many of you will know.
Deliveroo and companies like it rely on density restaurants and users within a certain zone which drives liquidity, so there's lots of people using it frequently and then hence defensibility because people have a low propensity to switch if it's working well enough. So my top tips on this one are: once you've acquired your users, really understanding deeply why they would switch away from you.
What are the other people doing that might attract them and what are the things that would repel them from using your product. Some of that will be about price sensitivity, some of that will be about product market fit. And one tip is, if you haven't listened to it already, listen to the various episodes of podcasts that Rahul Voora has recorded talking about product market fit, as that will really help you to think about switching costs and whether you have product market fit.
The fifth tip is do something hard. So if you want to be really defensible, then one way you can do it is you can actually tackle something extremely hard to do. You will also need to have the skill set to convince investors that you are the right people to tackle this hard problem and you'll need to be able to answer the question of why hasn't someone done it before?
But if you can tackle a really difficult, maybe complex problem with lots of different moving parts, that is going to be difficult to replicate for other people. So think about people that have done that. So Tesla tackled electric cars, which was a very, very difficult problem.
It's now difficult to it to come after Tesla because they've done that and they've figured out something very, very complex. So my top tips there would be: What can you build that you would find possible but other people would find hard? Is there a critical part of the process which would be very difficult for others to know how to do or replicate?
And really evaluate spaces where there has been very little innovation. Is that for good reason or is that because people have overlooked the problem because it is seemed to be too hard and maybe there's a technology breakthrough that you can take advantage of which suddenly opens up that problem again?
And then the final tip is to do something overlooked and this comes back to Ada Ventures and our strategy. So if you're working in an area where very few others have either had the insight or the understanding of the problem to build a company, that is a great way to build defensibility and stop other people out competing you.
So you could pick an industry which is really off the beaten track or serving customers that are not well represented in the tech and VC space. And I'm sure many of you already know the stats that eighty nine pounds in every pound goes to all male teams in Europe.
Eighty five percent of investment committees in the UK have no women and just thirty eight black entrepreneurs receive VC funding over the last decade. So there are just these huge customer groups that have needs that are possibly different from what most of the venture backed products and services are addressing that just have not been tackled before.
So one example of that could be TabooTech. So we've got an investment in a company called Furley which is looking at female sexual well-being. Or it could be tackling a problem for a group of people who have been ignored by innovators in the past.
So we've invested in my previous fund in a company called Open Bionics which is serving limb different young people and actually people of all ages but started with children. So my top tips here are: look in places that other people aren't looking to build companies.
Focus on boring problems, focus on problems that maybe aren't either second or third or fourth order problems in big sort of themes and trends. Focus on the product that people rarely talk about and focus on the problems of people who are not reflected in the VC startup ecosystem.
And if you are working on something that you think could fit our thesis at Ada Ventures, which is on our website, and you have a solid plan on defensibility, please reach out. So those are my top tips on defensibility. As I said, I've got some tips on further reading which I'm sure we can circulate as well around the attendees of this talk.
And thank you so much to all the investors I spoke to whilst writing this article: Carmen, Sarah, Kirsty, Deepka, Suzanne, Julia, Kieran, Fred, Deepali and Matt. Hopefully has been useful and I really look forward to speaking to many of you and getting your questions.
Thanks a lot. Hey everyone. So loads of great tips there from Czech to still down pretty, pretty concisely the idea of defensibility, something that some of you may have already have already thought about, read about. But as Czech mentioned in the talk, it's not, it's not a topic that has been covered, extensively.
So plenty to learn and plenty to discuss with check now. So we're going bring her back in. Again, broadcasting from home like like all of us these days. How are you check? Well, I'm good. I'm wearing a different dress. And I was wondering, should I be wearing the same dress so people think it's still the same day?
Or how does that work? Yeah, just a little bit of cognitive dissonance. Everyone's okay with it. We're, I think we're all finding how flexible our minds are in twenty twenty. Well, under maybe the limits of that flexibility. And so last time you you were at Turing Fest, two, two years ago.
And it was great to see you. And we all had a wonderful dinner together, which we're not getting to do this time. You but at the time you diversity VC was up and running, were doing you were doing some great work there. But Ada was when you were you were fundraising.
I've read your blog post, really cool blog post about that interminable process. So congrats on getting the fund together. Maybe a little bit first of all about about the fund about and about why, why you did it and what the mission is. Because it is a bit more mission driven than your average VC, is it not?
Definitely, yeah. It was a twinkle in my eye the last time I was at Turing Fest. So it's actually really nice to be back here and talking about the reality of it coming true or coming to life. The fund is built around this insight, I guess, or belief that we have, which is talent is evenly distributed all over the world.
But opportunity and specifically funding is not right now. And you can see how this is a kind of direct lead on from the work that I've been doing with Diverse2VC and we've all been doing with Diverse2VC to highlight just how little capital goes into founders that don't fit the traditional mould of the Silicon Valley wearing college dropouts, male, white, went to Harvard, Ivy Leagues, and how that applies in the UK as well.
So the fund is focused on investing in overlooked founders and overlooked markets. And it is really important to say we will invest in absolutely everyone. So we don't have any fixed criteria of what you need to look like or who you need to be for us to invest in you.
But we are looking for companies that have got some kind of unique insight, are operating in a market which has been neglected or mispriced or undervalued. And particularly those that are serving customer groups that haven't had access to venture backed products and services before.
So the fund is thirty million pounds, as I mentioned. And we've now made the first seven investments from that fund. Obviously, we weren't anticipating having a global pandemic in the first few months of our launch. But I think given that we've done pretty well, I think we're roughly on track in terms of deployment and things carry on largely as normal.
You mentioned that you're looking for overlooked founders and overlooked markets. How do you define those? How do you find those? And how much do they find you? Well, there's sort of two sides to that. One is that we definitely want them to find us.
And so we're trying to build a brand around being the fund for founders. Sort of like a magnet that attracts those founders that are working on these overlooked, underexplored problems. But also, how do we find them? How do we find those markets? We actually have a community of sourcing partners who we work with, who are leaders themselves of their own communities that are underrepresented within tech and VC.
So that could be communities of black women who are in the creative industries. It could be communities of Muslims in tech. It could be communities that are across the UK, student groups, etcetera. And they bring us ideas. And then we also look at what are the kind of groups that are not well represented in venture capital, which is basically anyone who's not a white man in their sort of 40s or 50s.
And any of those groups we believe have not necessarily had venture backed products and services built for them. So for example, the over seventy five population or the under twenty three population or women or people of color or people with disabilities. All of these groups are ones that we want to find and fund companies that are building products and services to serve.
Great. I mean, have been so many funds raised over the past few years, and they're kind of sometimes hard to tell apart. But you guys have a have a very particular position. And yeah, doing probably a lot more for the world than most most funds out there.
And there was before we get get into the ins and outs of your of your talk, there was a post recently by I think it was by Dell Johnson, from indie VC talking about cold intros versus warm intros. And that, you know, basically that VC should ban the practice.
And I know a lot of funds don't even have any contact info on their on their site deliberately to make it see if people can get an intro to them through the network. But that kind of inherently continues the, the sort of favoritism, I suppose, the bias and privilege.
How do you think about that? How do you feel about cold intros? Yeah, so that's something that I'm quite obsessed with, like Dell. We did a study at DiversityBC that came out in twenty nineteen that showed that you're thirteen times more likely to get investment if you have a warm introduction.
And I think what that basically translates to is if you're from one of these nepotistic circles and you went to college with someone or you worked with someone, and you're able to get that warm introduction, then you automatically get kind of fast track through the investment process.
Which is incredibly unfair. So when we built AIDA, we used this sourcing network to flip that on its head. So that the people who were least likely to have warm introductions would actually have them through the sourcing partners that we're working with. So these people are not ones that necessarily have any network within venture capital.
They may never have heard of venture capital before. But we're creating this conduit for them and for companies in their networks to introduce companies to us. So that's one thing. And the other thing is that we have a form on our website where you can submit your company.
And we also have our email addresses on our website, which is a fairly radical act in this day and age. And it is causing us some issues in that we have hundreds and hundreds and hundreds of emails a day that come from people.
But we get some incredible emails through as well and some amazing submissions through. And we've actually made an investment in a company that literally just uploaded their deck and a bit of description to our website. And two months later, we had made the investment and closed the round.
And that was a company called Organise. So I think it does work. And I'm super passionate that more people adopt this approach. Yeah, mean, it does seem like VC and investment capital in general is becoming more readily available geographically, as well as socioeconomically, but still a long way to go.
Maybe we'll talk about that a little bit later in our chat. But onto your talk and the idea of moats. First of all, there's a question that's come in around defensibility. Is defensibility a permanent state or a short term strategic advantage? I think it's neither.
I think it's a long term strategic advantage and it's a long term project that's never done. And I think that was one of the things that I wanted to convey in the talk is that it's not the silver bullet which you either have or don't have.
And then you can kind of forget thinking about. It is something that needs constant vigilance, constant time spent with your customers and spent being healthily paranoid, which is one of our values at AIDA. I tend to keep it quite open because what I really want to see is how they're thinking about it.
So I tend to ask, Can you talk me through how you're thinking about building defensibility over time and just see where they go with it? And I think you can tell a lot from the sophistication of thinking from the obsession with the customer experience.
It's something that I love to hear founders talk about. We know that our customers do X and Y and we know that the thing that really means that they want to stay with us is Z. And so we're really doubling down on that and we're going to make sure that other people don't know how to do it.
So those are the sort of tells that I'm looking forward to tell me that this is a company that's really thought about this deeply. I think on the flip side, what I don't like to hear is when they kind of say, basically, we're not defensible.
We're going to kind of build a brand in a very vague manner. And don't really talk about how they're actually going to do that. What are the qualities in the brand that they're going to bring out? And why is that going to be powerful?
The yeah, it's interesting. And I totally understand what you mean by the questions be or the conversation being about exploring the mindset. And people obsessing with customer experience is, is always good to hear. But something you mentioned, though, about at seed stage, boats, you know, typically don't don't and can't exist.
But founder market fit is something that you you value really highly. Is that perhaps the most important thing you look for in a founding team? No, it's not. Because I think it totally depends on the company. But there are some companies where having this unique perspective and insight on the market is critical.
And in fact, we've just announced that we made an investment today in a company called Arbit. We made the investment back in March actually, but we've just announced it today. And the company is building software for making clinical trials more efficient. And in that case, the founder market fit was so critical because it's such an opaque and multiple kind of moving parts industry, which unless you've been deep in it and understand what it's like to be putting together a clinical trial, it's actually very difficult to be able to obsess over the
customer experience and over the sort of product user experience. And so in this case, because Doctor. Amber Hill had done that, she knew exactly what she was building and why, we had the confidence to back that even though the product was at very early stage and it didn't necessarily have much in the way of defensibility at that point.
On the that sounds like a pretty technical founder example, and at the moment, there's a lot of, you know, it's getting a lot of coverage technical founders, you know, the COVID vaccine being announced yesterday, the first one, you know, that's pretty interesting startup story, changing the world.
Another company that has changed the world, we you could argue in the last, over the last year or so is zoom. And we had Eric Yuan actually speak at Turing Fest a couple of years ago, which I'm delighted about. He great guy really, really incredibly humble.
Something like the tenth richest man in the world now. Zoom is a funny one, though, because zoom is a product that we all use all I mean, my parents use zoom, everyone's using zoom, and use cases that it was never designed for. But zoom is a product that doesn't seem to have a moat.
And then you know, Benedict Evans, as he's mentioned this a bunch of times on Twitter. What's is zoom going to be disrupted? Or is there is there a moat there that you know, is the customer experience the user experience so good? How do you think about companies that don't have obvious moats?
Yeah, this is a really sensitive example in my household because I actually so my husband and I occasionally invest in tech stocks. I think it was sometime last year that I was saying we should invest in Zoom. In fact, was definitely sometime last year.
And he said no, no, there's no defensibility. And he's got this whole framework of how he thinks about tech stocks. And I know nothing about investing in public companies really and all we ever invest in is tech. But he said no, there's no moat.
There's no sort of like network effect to it. So let's not do it. And obviously, you know hindsight is a wonderful thing. We look back and think oh we could have made some money on that. But on the tiny amount of money we were going to invest it probably wouldn't have made any difference.
But we, you know, I think it's a really valid observation. I think some of the things that, you know, it goes back to one of the points I made in the talk about scale. If you can get to scale so rapidly, and obviously I don't think anyone predicted that Zoom was going to scale so rapidly because of the pandemic.
But if you can create that opportunity for a lot of people to be using you, then you can actually build network effects and you can build moats after that point. So I think with Zoom, they've recently announced their Zap app store for Zoom apps.
And I think once you get to that point a bit like Slack where you can actually build an ecosystem where other people building on top of or within or inside your product, then that kind of creates a type of moat which other people then will struggle to compete against.
But yeah, I think it's a good challenge and there's always exceptions to the rule on this. I mean, anything though where you have a kind of one to one or one to many interaction and you're having your The sort of user experience necessitates you inviting people onto that platform.
That's always quite a good way to create a type of network effect, albeit that the product doesn't actually improve with every new user. Yeah, it's funny that you mentioned Slack. And in your presentation, you referred to Slack versus Teams. And they've been having a bit of a ding dong with full page ads in New York Times, all that kind of stuff.
But it also it seems to me a little bit that Slack and zoom are also heading for a big a big showdown. And it's funny in, in our team, we use Slack, and we use zoom every day, but we never think of using Slack for video calls.
And, you know, it's a feature, but we just don't bother with it. It never even comes to mind. Zoom has kind of captured that, you know, in our mind, if it's a video call, it's zoom. And actually talking to Erin, our producer recently, she was talking about how good zoom is technically that you and I perhaps don't don't know.
So yeah, the quality of the product is is pretty central. Another thing that you mentioned, though, in your talk was around building a verb and one of the subsets of that brand plus community plus great customer experience. The community side of it, I'm very interested in.
And I think we've seen a huge spike in understanding and realization of the value community this year, ironically, as we're all kind of isolated from each other. Early adopters and creating community of something specifically mentioned, can you give us some examples of who you think has done community building really well, and particularly on the on the early adopter early adopter side?
And what, how do they do it? Why did it work? Yeah, it's a great question. And I think it's one of those really difficult ones to use lots of examples around. Because I think everyone who builds a community does it slightly differently. Because there's a reason why they're going to your community and not another.
Examples that come to mind in the consumer space, probably the Glossier founding story. It started off as a blog. And they had people who were suggesting product ideas and they then made the products based on the product ideas that were suggested in the Get the Gloss kind of blog.
And I think that is one of the elements to community that I think is important. Is it's not just a one way of, just one way conversation. It's actually a dialogue and you're involving your community in the creation and the story of the product.
And I think companies that can crack that do really well. I mean, Hopin was another example that we were just talking about because they announced their two point one billion valuation today and having raised one hundred and twenty five million of fresh capital.
But I think in the early days I was talking to Carmen who was one of the investors that kind of first identified Hopin. And I was asking her, what was it at that point that you found so compelling? And she said she wrote an investment memo that said, this is the first unicorn that I think I've ever actually come across, even though she's been an investor for several years.
But she just knew at the time that this is a company that could absolutely become a unicorn. And one of the things that she saw happening with their users is that they were creating events and they were also troubleshooting for other people who were creating events on the Hopin platform.
And it was originally a tool for people who had community groups to kind of get together, bring their communities together. That was I think what Hopin was supposed to be about before they kind of discovered this online events opportunity. But she said that the fact that these kind of were such evangelists that they were doing almost like customer support for the company completely unpaid because they were so passionate about it.
So I don't know if that's a great answer but I think it's one of those things a little bit that like, you know it when you see it. And if you try to just apply the kind of carbon copy of something exists elsewhere and just recreate it, often you're not going to be successful.
Yeah, it's a it's a very interesting example, actually. And if you think about it, I wonder how much of it's a reflection of the times we're in and the idea of, of giving first and of helping, and genuinely being helpful. Because if you think that there's a company that was maybe in a really good position strategically, once upon a time to to do what hop in is doing now, which is meetup.
And meetup, I think I could be wrong, but I think meetup, part of the origin story is that it came about after the September the eleventh attacks in New York, and meetup was established as a way of connecting people in, in New York City who were, I guess, traumatized and, and, you know, feeling pretty depressed.
And it was it was, there were a lot of sort of good intentions behind the product. But I know over time, I don't know if this is a, you have to presume it was a deliberate feature where if you build a community on meetup, if you want to export the mailing list, for example, you can't, you know, they've built in these sort of lock ins that basically piss people off a lot, I think, whereas hopping seems to be coming from a new, you know, the newer kind of era of society as much as tech where
it's it is much more about about helping out and helping each other. So I think the hop in story is fascinating. We we didn't use it for Turing first, went with a different platform. But there were specific use case reasons for that, that I imagine will shift pretty quickly now that they have all that And something just a final thing to touch on is out with the the moats question is diversity, diversity in tech, which I know is a subject that you've put a lot of effort into
over the last few years. Where is it getting better? Where are we on diversity in tech? And particularly where are we in in Europe and in the UK? Yeah, I wish I could be more positive on this. But I think the latest stats from PitchBook say that funding, particularly to female founders, has dropped by two thirds during the COVID pandemic.
And I think that that is a reflection of when people are hit with a higher risk environment, they just revert to things that feel safer, things that feel more familiar. And if you ask them to try to break in, you are therefore seen as more risky and less likely to be investable.
I think on the other hand, there are some really great kind of green shoots for this. In the sense that I've heard about people who've organised events for pitching. With people who would typically not get the chance to go to one of these in person events in a big city and pitch their company.
Or necessarily have the confidence to want to do it. But yet, if it is on Zoom or if it is on Hopin, they're able to make it and pitch their business. So I think that there is a positive side there. I think what's great though, is that we are also understanding more about this issue in a greater amount of nuance.
So recently Xtend Ventures did a great report that was looking at the different barriers that groups have faced, particularly black entrepreneurs over the last ten years of receiving funding. I mean, the statistics are incredibly sobering. Only thirty eight black entrepreneurs actually have received venture capital funding in the UK in the last ten years.
And only one woman, which is one black woman, which is absolutely mind blowing and awful. But I think this data empowers us all to go on and make change and do more. And I hope it kind of reinforces the work that all these organisations are trying to do to tackle that issue and makes it feel more urgent.
So it's a mixed bag. But I think knowledge is power and knowing more about where we're at is only going to be a good thing. Yeah, agreed. I mean, obviously a lot of work still to do. I think one field though, where it seems like things are improving, on the in the conference world in the tech industry.
You know, just having a full lineup of, of middle aged white guys, it's just not acceptable anymore. And I think most conference organizers, certainly the ones that I know, and my my peers, you know, everyone's very aware of that. But it's interesting when we from a personal perspective, when I go to programme, the lineup for Turing Fest, you know, finding women and finding people of colour in some in some fields.
So you know, we have three stages build, grow and lead for grow for the marketing stage, you know, generally, that's, that's not a problem for build, it gets a bit more difficult. And then if you're looking for, if you're looking for VP or C level, for the group for the lead stage, that's when that's when the problem really becomes apparent.
So still lots of work to do there. But check, I think we've we've covered a ton. So we're probably gonna wrap it up there. Thanks so much for joining us. Great, great, informative chat on the after the talk, but also the presentation itself loads for the audience to dig into around moats and their strategic importance.
So thanks for thanks for being here. And, you know, we'll see you again in person soon. Hope it looks like it looks like the end is in sight for all of this all of this crap. So that's good news. Thanks. Thanks for joining us. And good luck with with Ada.
Thank you so much for having me. Really, really great to be back here. Thanks, Chuck. Okay. So that was Chuck Warner from Ada Ventures. We're gonna take a quick break now. We're back at three o'clock with Val Geisler from Fix My Churn. Really, really tremendous email marketer expert in the field talking about the problem of losing your customers and how you can how you can avoid that.
