Investing in vertical Saas and marketplace companies with Trinity Ventures Principal John Lin

The below is a full (unedited) transcript of a Youtube session / podcasting episode I recorded with John Lin, principal at Trinity Ventures in Q4 2019. You can view the video/listen to the podcast on YoutubeApple PodcastStitcheror wherever you get your podcasts.

Trailer

Erasmus Elsner 0:01 
Hi, and welcome to another episode of Sand Hill Road, the show where I talk to successful startup founders and venture capitalists, about the companies that they build and invest in. And the goal like always is to give you a sense of what it’s like to be in their shoes, how their businesses tick, how they got to where they are, and to learn from their many successes and mistakes. And today, I’m super excited to be joined by John Lin who is a principal at Trinity Ventures.

John Lin 0:25 
Yeah, it’s been quite a ride for me at Trinity.

Erasmus Elsner 0:28 
At Trinity Ventures he invests in vertical marketplaces and workflow companies. Before joining Trinity, John has worn many hats after a double major in computer science and business from UC Berkeley. He worked in business development for Yelp, as a management consultant for McKinsey and as a venture associate for Globespan Capital Partners in Boston. And this was all before 2014 when he decided to take a leap of faith to start his own company, Town Hall, the Yik Yak for business. The startup was later sold to Roomie, another startup where he continued to lead product and engineering.

John Lin 1:00 
Near the inception, we just had a really small MVP all the way to when we were a few million users. So growing out that journey was really interesting.

Erasmus Elsner 1:09 
He’s been with Trinity Ventures for more than two years now. And in this session will take a deep dive into some of his recent investments in verticals, such as fintech, mobility, vertical Saas, and real estate tech. Let’s hear it from john himself. And let’s jump right in.

Interview

All right, so I’m super excited to be joined today by john Lin, who is a principal at Trinity ventures. And before diving deeper into what he does at Trinity ventures, I want to take a step back and find out a little bit more about john. So john has worn many hats as a management consultant, as an associate at a VC firm in Boston. And as a startup founder himself, and I want to start at his own startup Town Hall, which he later sold to Rumi, and to really dig a little bit into this transition from being an operator to becoming a venture capitalist. So maybe john, talk to us a little bit about what townhall was all about, and how the transition from heading product and engineering a drew me to becoming a venture capitalist was for you, and and how this all came about.

John Lin 2:32 
Yeah, sure, a ton of questions that you have there. You’re totally right, in the sense that, you know, I was a venture capitalist, I jumped into it, I jumped back into venture capitalists that had the unique opportunity to kind of sit on both sides of the table. So so just quickly to answer your first two questions, one was Town Hall. And roomy Town Hall was a platform for people to share thoughts and ideas within organizations. So kind of thinking that about is a mix between Yammer and yak, yak. And then roomy was a platform to basically help people find roommates and find places to live. So kind of think about that is something similar to Zillow, except focus, particularly on different rooms, and who you would be living with as opposed to renting an entire apartment? And then your second question to what the transition was, like, it was a super interesting transition, you know, I had the opportunity to look at a bunch of different companies and see how each one operated and looked at the key metrics for both for every type of company, and then to transition into someone who’s ever actually operating and trying to improve those metrics. That was, that was super interesting. And, and I made a ton of mistakes as an entrepreneur, ranging from, you know, not testing my product out early enough to trying to build too many features that didn’t matter. And, and I learned a lot through that. And then and then on the other end of the spectrum, after I had, you know, helped the company grow, help raise, you know, a few rounds of funding to help take our user base to over a million people and begin to monetize some of our platform, then to be able to go back into venture and kind of go through that same process with some of the entrepreneurs is really interesting, because I was there, literally, you know, 18-24 months ago. And kind of my idea as an entrepreneur is, hey, how many of those mistakes that I’ve made? Can I share with these entrepreneurs, so they don’t make the same mistakes. And they they create a much more successful startup does and even I have had the opportunity to do

Erasmus Elsner 4:38 
Yeah, it makes makes total sense to me. And so maybe let’s segue from this to this medium post that you wrote about five key controversial learnings that you had from your journey at Town Hall. So your second controversial learning there was “Mobile is not always the best for you”. And I think when you wrote this a couple of years back, everybody wanted to have an app and we’ve now gone through a transition phase where everybody knows there’s been a lot of “app fatigue”. I think one trend that I’ve noticed recently is that people are starting to get back to building a web app first. What’s your thinking around that?

John Lin 5:12 
Yeah, I certainly think that’s true. And actually, let me back up a little bit. When I first was writing that trend. You’re exactly right. During the time, mobile apps were extremely popular, and everyone was going mobile first. Well, if you think about how people use mobile applications, most people only use their top, you know, maybe seven to 15 applications. And it’s incredibly, incredibly hard. If you’re not Facebook, or Google or someone else like Yelp, who basically has that dominant mindshare. So as part of town hall, and as part of Rumi, we are trying to compete to be part of that dominant top 15 app, mindshare, and it was incredibly hard. What is a lot easier to do is to build, as you mentioned, a web application. Actually, an interesting thing is more and more. So we find that the majority of our web traffic for many of our startups, both at Trinity AND ROOMY, was driven primarily through mobile web. So if I were to suggest any platform to start off, I would, I would start with web, but I’d make it you know, a react app that’s respond to being on both web and mobile web.

Erasmus Elsner 6:22 
I absolutely agree there, I think the advent of React, the ability to quickly turn your web app into a mobile app has really changed a lot. 

John Lin 6:30 
And I would say the only other thing is, whenever you’re on, you know, two, three platforms, whether that be web, iOS, and Android, it just takes a huge amount of effort to maintain that code base. And unless you really think you’re driving more than 30% of your volume through mobile, maybe arguably even 50%. For your volume. As an early stage startup, you should focus those resources on things like growth, or what is more important, instead of having to hire two engineers for each different platform.

Erasmus Elsner 7:01 
It’s a great learning. And I think this is a good segue also to the next point of your third controversial learning there was that being a co-founder has taught you that there’s less decision making than you would expect. And basically what you said there was that 99% of decisions are so obvious, when you talk to startup founders, oftentimes you hear that they don’t know where to spend their attention and focus and energy on. And what you’re saying there is that this is actually the opposite from your personal experience. So talk a little bit about this learning, which I found quite interesting.

John Lin 7:31 
If you look at why people become founders, I feel like there’s a subset of founders that basically joined or started their own company because they wanted more control over their lives. And, you know, they thought they can make all the decisions. And in fact, when when you actually start a company, or when you’re a leader in a company, it turns out, a lot of your decisions are made for you one way or another. So I’ll give you a few examples of such a lot of time when you hire people or when you have a particular staff, your staff is an expert on a particular area, or they give you recommendations that you might not otherwise know. So So going back to our coding example, as much as like a startup founder, you might be tempted to use one language or another. If you only have two or three people who you can have to join your team or you have one or two obvious, you know, candidates you want to hire, you probably want to use the stack that they’re most familiar with, rather than anything else, when you’re trying to choose between product decisions. A lot of times as you know, the head of product, it wouldn’t be as much about, Hey, this is the right product decision, or this is the right product decision, a lot of times you’ll have three or four product decisions, and you probably want to test all of them, you probably want to test them in a methodical way, like talking to users by building out you know, MVP, like features, and then seeing which one has the best results. So in that sense, your path is often a lot more obvious than you think. And it’s not you kind of like brainstorming in a room, it’s usually you going out talking to users, you going out talking to other people in the field, getting those ideas and then kind of executing on them. So so as much as you know, quote, unquote, decision making is important. A lot of the execution is even more important. And things become more obvious as you spend more time in the field, or as you experiment more with your startup.

Erasmus Elsner 9:23 
Yeah, I like that. I think this is again, a great segue to the next section, where you basically argued “Don’t be too metrics driven” that was the fourth learning. This is something that we’ve seen that we have more and more metrics, and people start to get confused. What to focus on is it CAC is it LTV is it traffic that emits a pulse. And so what you mentioned there is that in the beginning, really just focus on three to four metrics. I would call them “Northstar metrics” in a sense, and basically just execute on them. So the question that comes up, how do you transition the metrics over time. Talk to us a little bit about the kind of metrics that that you would suggest to early stage founders and how they should adjust them over time.

John Lin 10:09 
I think just to backup here, there’s basically a few different uses of metrics that it really depends how you’re using this metrics, kind of on one side of the spectrum, if you’re trying to discover things about your user, if you’re trying to discover things about your product, yeah, I encourage you to track everything because you could even track videos of your users, because by learning more about your users, you get a better understanding of what your product delivers. But that doesn’t mean you should find some really small metric to track your company against when it comes to transitioning to what creates success for a startup. That’s a totally different question. And I think it I think it differs from from point to point among your startup, and from startup to startup. But I’ll give you a few examples. So I think when you’re first starting a startup, you want to focus on what I call kind of making that model work and creating a scalable model. So let’s say it’s a consumer model, where you have like a direct to consumer product, you probably want to focus on some of those key metrics that you mentioned, like LTV, CAC, making sure that each of those things are scalable, and really focusing on the right metrics to follow. If you start to focus on things like growth or revenue or things like that way too early, you’re not going to get the exact model right. And and then more specifically, if you focus on these nitty gritty metrics, you probably aren’t focusing on the bigger picture, you want to focus on what that’s the bigger order metrics, like what is my total LTV rather than, you know, my margin for one specific product, because then you’ll only focus on that one product, and you will think about all the other products that might drive you know, higher, higher overall TV, just really focusing and finding what the right metric is for you to track is super important. And then there’s actually a really good book about okrs, that I highly suggest reading for anyone out there

Erasmus Elsner 12:05 
Measure what matters” from John Doerr. Is that that one?

John Lin 12:08 
Yeah, that one’s awesome. And it often for new founders, you know, it’s a way that I suggest for startups who are kind of at that mid tier stage, or Yeah, kind of growing and scaling to organize their organization around.

Erasmus Elsner 12:23 
Yeah, I can also highly recommend that book. So moving on to the last controversial learning you have there, where you mentioned, that distribution is even more important than product, some of the greatest products never get into the hands of the users. One problem that we definitely see is that a lot of VC funding is spent on acquiring new users through Google AdWords and Facebook ads. So talk to us a little bit about the importance of distribution,

John Lin 12:47 
I totally agree with you. And there’s so many great products out there that never see the light of day and a lot of entrepreneurs and they first start, including myself back in the day, I thought if I built this great product, inherently people would come Well, that is true for you know, one or 2% of products out there. For the majority of products, figuring out what is the right method for distribution is super, super important. So there’s a ton of methods for distribution out there. There’s obviously paid, as you mentioned, you can spend money on on things like Google and Facebook seem to be key, I encourage you, if you are focusing on that distribution method to just realize as your company scales, usually those costs go up. And as more and more Shan enters the space, it becomes more and more competitive. And there’s there’s more organic or viral loops. So you can do things like referrals, you can have things within your app to have more people. And there’s a bunch of other ways like whether going to conferences, you know, for a large portion of b2b companies, its sales, a lot of times there’s some channel you can sell through or some type of growth hack that you can have. I think having the right distribution channel and figuring out why you can have an advantage to get customers cheaper is often one of the biggest advantages for a startup. So So that’s something definitely to consider.

Erasmus Elsner 14:09 
I absolutely agree with that. So let’s move on to Trinity Ventures. Talk to us a little bit how you came to join Trinity ventures, and how your journey has been so far.

John Lin 14:20 
Yeah, that’s a great question. So in terms of how I joined the firm, you know, it was it was actually a pretty, pretty random coincidence. I was honestly playing basketball. And I had happened to play with someone who had worked with one of their general partners, or actually two of his previous startups, he actually recommended that I’d meet some of the people at Trinity ventures and, you know, I would meet one person and then another person and then another person and had some really great engaging conversation. I was trying to decide between going into product and joining another VC firm and it was a really tough decision for me between being an operator versus being Then more of a investor type that will ultimately set me over the bar with Trinity ventures is that every single partner that I’ve met while there, I enjoyed meeting more so than any other venture capitalist I had ever met. And, and I just thought it was a great group of people to be around. So that’s why I ultimately chose to join the company. In terms of Trinity ventures as a firm, we’ve been around for about 33 years, currently our 12 fund and primarily lead series, seed through Series B investments, we’ve, you know, had the lucky fortune of working with some great iconic companies over the time, one of our first investments is actually at Starbucks, we’re the first institutional investor there all the way to companies like cohesity, you know, zulily, care.com, Toronto, and a bunch of others. And I think this year in particular has been a really exciting year for us, because we only fund you know, 10 to 12 companies every year. But this year, in particular, we’ve had five of our companies actually announced as unicorn. So it’s been a really exciting year for Trinity ventures as a firm and Trinity ventures as a whole, we really pride ourselves on being an entrepreneurial first type of company, to have our general partners have started public companies, and our founder, actually, Trinity ventures was his third company. So we really pride ourselves on being on the team of entrepreneurs. I’m happy to talk more about that if it’s interesting. And just to quickly answer your last point, you know, it’s been quite a ride for me at Trinity in there close to two and a half years, I got the chance that I think work on I guess, 10 companies now, for which, you know, I found for the firm, and, and had the chance to work with some great entrepreneurs while I’ve been here.

Erasmus Elsner 16:43 
So in the next step, let’s dig a little bit into your portfolio companies, maybe let’s start with the mobility vertical with the company called Grow, which is a Latin American based company working on micro mobility and payments. So it emerged from a merger from two companies. One is Grin, a Mexico-based scooter company, and Yellow, which is a player in Brazil, that the scooter space and micromobility space have been very competitive spaces. We all know about the scooter wars in the last few years. And also, there’s a lot of question marks around the scooter economics and making the unit economics work with lime now raising the next round. So talk to us a little bit about the thesis here, because it seems quite daunting to go to Latin America to really pioneer this micro mobility space there.

John Lin 17:35 
Yeah. Great question. So actually, when I first joined Trinity, it was quite an exciting time, because you had companies in China, ofoh, mobike, and a bunch of others going into mobility becoming huge companies. And then you had companies in the US starting in the micro mobility space. So companies like in like, why, you know, all the big ones out there, yeah, jump mobility and a few others. And it was a super exciting time, because basically, all of them, you know, we’re six weeks in, and I had actually brought in quite a few of them to try and understand their companies and hopefully invest in, and our team just wasn’t sure whether they’re, they’re willing to take the risk, you know, fast forward, you know, six months to a year, we notice that in the US, a lot of these companies are really taking off. And, and you’re right that they face a ton of challenges. Most of them are growing extremely, extremely fast, they faced a lot of scaling challenges. And with that came a lot of the unit economics questions. So our question was really like, Did it make sense to place a bet in this area, and in our mind, there was a few things that we didn’t want to do. One was, we didn’t want to compete directly with people who were extremely well capitalized. That point, you know, for Lyme disease, they’ve raised hundreds of millions in terms of combined capital between them. So we want to find something in a different geography. And the other thing that we wanted to focus on was, as you mentioned, the unit economics. So the Latin market has a lot of very interesting, I guess intricacies. One of the things that most people don’t realize about about scooters is there’s actually only a few things that really matter when it comes to economics. Well, one is, hey, how many rides per day is the person riding to is how much are you charging per scooter, basically a per ride. So those things go into your revenue. And then in your cost, there’s only a few major costs. It turns out one of the major costs tends to be the cost of the scooter because these scooters were out extremely fast. Most scooters are only there for three months or so. And a lot of them honestly tend to get stolen. We heard a stat as high as 10% of them get stolen in many, many regions. And then the other thing is labor going and charging all these scooters and getting them set up and things like that costs a lot of money. So when we looked at that paradigm and those times metrics, we realize that this company in Latin America grin which we funded, which later became ro, had a unique advantage. In one sense, I don’t know if you know this, but Mexico City is actually one of Ubers most popular cities, I think it might even be the most popular city. So there was a huge need for micro mobility there. And if you look at the initial metrics of drift, the amount of rides that people are going on per day was extremely high, compared to many places in the us it was in urban cities, it was doubling the amount of rides people are going on the US and they were they’re still charging it pretty high enough, even though it wasn’t a US based country. And then on the other side of the equation, one of the main things was, how do you lower the cost. So in that respect, labor in Latin America is much cheaper than in the US. So you cut off one of your major expense points, and you can actually make your unit economics work a lot better. And then finally, the last point is like, how do you prevent bikes from getting stolen? Because that’s a huge cost. How do you make sure they’re well maintained, things like that. But with decreased labor, you’re able to, you know, maintain your bikes a little better, something that maybe in the US would have cost you, you know, $100 to fix, and you might just want to trash the scooter altogether. Now, you can fix it for 10 $20 in Latin America, and it might be worth it to fixed on the other end of the spectrum in terms of getting things to be stolen. That was actually a huge question for us and Latin America, but was great about the founder was who came up with this unique scheme of having, you know, designated areas where you can park called green zones that would basically, you know, prevent people from stealing while still giving people the ability to have a dockless bike. So so you kind of addressed all those questions. And, and it’s been a pretty wild ride, since we were actually seed investors in the company. As you can probably tell from crunchbase in the news, you know, they’ve, they’ve already had hundreds of 1000s millions of riders on their platform, and they’ve raised a ton of money, it’s probably one of the fastest growing yc company that we’ve ever seen

Erasmus Elsner 22:02 
The different unit economic drivers in the Latin market is something that I didn’t expect to be that different from the US, but it makes a lot of sense, really interesting investment. So let’s move over to FinTech with a company called Branch. And TechCrunch describes it as the startup that’s lending out a dollar at a time. It was co-founded by Matthew Flannery, who previously co-founded Kiva. And their Trinity led the $70 million Series B back in 2018. What me a little bit through the business model there.

John Lin 22:34 
Yeah, great question. So, Trinity is a firm, you know, we worked really heavily in FinTech within the last two years, we have five to six active FinTech investments in one area of FinTech that we were always curious about is lending. You’ll see in the US, there’s so many different lending players, and actually, a lot of them are struggling. So we were wondering whether there was a thesis that made sense, somewhere, for lending. And we met Matt, and it was actually a super interesting conversation on one end of the spectrum, you look at what the company does. So let me let me back up and say what the company does, because that like little quarter into the conversation. So branch basically gives loans to people in different countries, usually developing countries that don’t have access to traditional finance. So if you look at some of these countries, most of them don’t have bank accounts, most of them don’t have credit scores. So the question is, how do you correctly underwrite some of these, these people. And what we found was, you can actually do a pretty good job just by using a lot of the data on someone’s phone. So that might be who you’re connected to. If you’re connected to someone who tends to have good credit, or tends to use the platform the right way, you also probably use the platform the right way. That could be questions like, what does your bank account look like a lot of actually use their phone for mobile banking. So you’re able to look at when how much money they’re getting when they’re getting it. And finally, you can look at some of the usage and turns out, people with certain models and phones, people will use it a certain way, you’re able to draw some predictive insights from there. So with kind of the combination of all three of these things along with a few other metrics, you’re able to pretty successfully underwrite how someone’s going to repay their debt. What Brach does is, basically they lend you money, and they start with, as you mentioned, one $2. And then as you kind of repaid some of that debt and cycled through more money, you’re able to borrow more and more money. We think this is a huge difference, because actually access to capital is one of the major drivers of moving people out of poverty. So Matt gave the example of, you know, lending money to a fisherman. Maybe the fisherman you know, could only buy you know, bait to catch, you know, $2 worth of fish. And then he had to use the rest of to support his family. But now if you want him a little bit more money, he can now buy a lot more bait, and then, you know, catch $4 a fish. And then after he catches $4 worth of fish, he can use that to, you know, further build his business. So that was one part of our thesis there. And if you look at them versus some of the, you know, even the top players in the market in the US and abroad, they had way better rates in terms of repayment rates, things like that. So it’s a really interesting model. And on the other side of the spectrum, you have a guy, a man who had previously started Kiva. So if there’s anyone in the world who’s an expert and start, hey, micro lending businesses in developing countries, it’s all of this makes a lot of sense to me. Now, on the one hand, these areas, leapfrogging computer age and going directly to mobile, and then building up a credit history with these small micro loans. So that makes a lot of sense. Okay, so

Erasmus Elsner 25:55 
Let’s talk about another one of your portfolio companies, which I think is super interesting. A company called Squire were Trinity ventures participated in the series A in 2019. Squire is a booking and payments platform for a specific vertical, namely barber shops, there’s been a lot of movement around vertical Saas. And the way that I understand this is that square is really a POS solution and a vertical POS solution for the barber industry. Talk to me maybe a little bit about this thesis and how you got to make this investment.

John Lin 26:30 
Yeah, great question. So just to quickly back up, I think the way to think about Squier is, they not only want to be you know, a POS system, but they want to be the partner, a business partner to every single barber shop out there. So someone who you can partner with someone who will help you operate your business in all aspects. And, and really, if you, if you look, traditionally, at vertical Saas, there’s been a lot of industries that people have stayed away from partially because like, honestly, the markets too small or the economics aren’t good or things like that. And I think the really interesting thing that has happened lately, and you can see this with companies like square as well as with Squire in this case, is there’s been a lot of new FinTech innovations that allow for an expansion of revenue. And, and also, people are beginning to adopt Saas a lot more than for just one function. So you’re able to expand across multiple functions to that full staff that you’re talking about. So let me just give you a few examples of how this kind of plays out in squiers case, so in squiers case, what you would traditionally consider you know, just the POS or something for payments, they’re actually doing a ton of things on top of that they’re helping you look session, they’re helping you eventually, you know, if you’re a barber, you can get a loan and eventually buy supplies directly or via Squire, or at least those are things that we’re thinking of long term. The real question is like, why did we make this investment now and it’s basically four different factors. One is we really like the team, the team actually, I encourage more and more people to do this if they want to become entrepreneurs, but they actually became subject experts in the barbershop actually one town, they started their own barber shop, and they operated it and helped cut hair. So they’re very few people, you know, entrepreneurs in Silicon Valley that have opened a barber shop, let alone have cut hair before that was really unique. The second thing was, you know, they had a really strong value prop to these barbers, because they were so specific on focusing on barbers and there’s a lot of like really small intricacies that you wouldn’t think about. So one of the examples is Do you ever go to a barber shop a lot of times you go with your son and then you want a father and son barber cut and that’s all one payment for you maybe you want to tip different barbers because one barber cut your hair on barber cut your son’s hair. So there’s a lot of these weird barber shop intricacies which they really understood partially because of their experience, and they were able to build a platform for it. And then we talked to a ton of their barbers and and ask them why did they choose Squire over there’s there’s a ton for there’s ton of software for salons, like Mind Body book or things like that. And honestly, it was it was a mix of a few things. One, they really resonate with the brand, they really liked someone focused on barbers, but two, they also saw a huge business outcomes for many of them, you know, increase their bottom line, but even double digit margin points. So they’re able to do that for a few reasons. One, because Squire gives you a booking engine. So now you’re booking things online and you’re forcing people to pay before they enter. Originally, if you’re a barber, actually, if you’re taking traditional phone calls about 25% of people actually don’t even show up for the appointment and you’re not able to fill those last minute. So just by increasing your revenue by 25%. You have a huge difference. In addition to that, you know, a lot of barber shops. have their own phone call people, a lot of owners would really spend a lot of time dealing with things like all of their back office, and it was a huge burden to them. And actually, Squire has taken all that away and enabled them to open a bunch more shops. And the final reason is because along with all these new FinTech innovations, and increases in, you know, kind of going full stack, you’re able to capture more value for the customer, and therefore, you know, charge the customer more and get a bigger portion of the company’s business. Yeah, that’s, that’s

Erasmus Elsner 30:35 
Really interesting. And one question that came up probably a general question in vertical Saas is, is the vertical Saas approach really a land-and-expand model where you basically you use the verticalization of the Saas as a wedge into a specific industry, and you can then expand from there on, but the way that you’ve been describing the barbershop industry now, it looks like this is so specific, that it’s probably best to basically do a geographic expansion first, before moving into different industries. What’s your thinking around this?

John Lin 31:15 
Yeah, so I think the issue with vertical Saas is you have to make sure a few things. One, you have to make sure the market is large enough. And you wouldn’t think that there’s many barber shops in the US that turns out, there’s 400,000, barber shops or hair related companies that fall within that category just in the US. So it’s actually a sneaky big category, and you can get you know, $10,000 from every single barber shop, you actually have a chance to create quite a large company. So that’s that’s one aspect. I think the other aspect is like, how do you grow these businesses? And yeah, you’re totally right. In squiers case, there’s really a few axes of growth. So one is geographically and just covering more and more and when you’re looking at that one of the key things that we look at is, you know, how many people are they calling? What is their distribution that the How do they acquire barbers? As it turns out, you know, barbers are super, super receptive to something like this, especially since they’ve built up such a great reputation and brand. The second question is, how can they expand their revenue. So in squiers case, it might be doing more FinTech stuff, it might be, you know, going into their supply chain, and it might be providing marketing and more value add services to these barbershops, basically doing everything that a barber shop hates to do, and, and letting the barbers focus on really running their business and providing the best customer service to the customer. And the best, the best haircuts. And the final way to expand is the way you were mentioning, which is expanding among different verticals, we think that Squire has a huge room to grow just within their own vertical. But you’re right, there are a lot of intricacies that need to be tuned. But we also believe, you know, long term, there’s some ability to expand into other verticals, there’s a lot of verticals, either kind of focused on this client relationship where you’re basically operating a business. And then you have these individuals, we basically come in as contractors or, or are working for an overall shop. And there’s a lot of companies that kind of have that type of model. So, Squier would be a good fit for anyone like that they would not be a good fit for like vertical Saas software to run a doc or to run, you know, a run or something like that. So

Erasmus Elsner 33:32 
So let’s move on to the last portfolio company I want to discuss with you, which is a company called Side, Trinity ventures participated there in the series B, the way I understand it’s a real estate tech company, which focuses on the million dollar listing agents. There, there was this really interesting post by Chris Dixon from Andreessen Horowitz on the full stack startup, that you have a couple of startups with end-to-end coverage of the service offering. One example in the real estate tech world is Opendoor in the listing agency space, its Compass, and the way I understand it, the business model of Side, it’s a full stack model. Maybe I’m misunderstanding it, maybe walk us a little bit through the thesis there.

John Lin 34:14 
Yeah, that’s a great question. And really interesting. let me pose to just kind of going back. If you look at the real estate market right now, it’s actually incredibly, incredibly fragmented. And if you look at players like REMAX or Keller Williams, or, or to your point compass, none of them really have more than 2% 3% of the market. And there’s been this growing trend with people where they care less and less about what the brand is and more and more about the real estate agent. So who is who is, you know, Jenny or, or Fred, who is the real estate agent who has the day to day contact with you and how good are they instead of you know, this is Keller Williams, this is compass etc. And with that, we noticed that more and more of these great real estate agents wanted to be their own brand or run their own companies. So what Side does is side actually enables, you can now be a basically run your own company, and they’ll operate as the brokerage for you. But they’ll basically be a white label brokerage on the back end. And they’ll take care of all your daily tasks, all your boring back office functions, and they’ll also give you the freedom to run your company however you want. So no longer are you restricted by certain types of marketing or strict about all these rules that you would get from from your traditional real estate brokerages and help you really focus on selling houses. So when when we made this investment, there was one major question that we asked, which is what do the real estate agents want. And we talked to, you know, dozens of real estate agents to get an example. And the one thing that we found, for example, that was really unique was, at least for many of the agents that we talked to who were onside, their volumes actually doubled after they joined side because side was able to take away so many of the excess things that they were doing, that was not their core job. And they could just focus on what they do best, which is selling houses and showing houses. So that was why we made the investment side to us, it was a no brainer for any agent to go from, you know, compass, or REMAX or whatever it might be to join side, because you can basically double the amount of money you make.

Erasmus Elsner 36:32 
And that sounds like a really strong value proposition. So the last question about the next front here, and you mentioned to me that one specific vertical that you are focusing on increasingly or that you’re increasingly interested in is health, and in particular, population health. So maybe talk to us a little bit about what this is all about, and what you’re looking at there.

John Lin 36:56 
Yeah, so healthcare is super interesting, we noticed a ton of different new trends in the space is up for everything from you know, CRISPR to, there’s been a tough walk to consumer companies. And one of the more interesting friends right now is this thing called population health. So population health is basically the practice of looking at large population trying to increase their health outcomes. And you’ll see a lot of large public companies are now instituting population health type initiatives, or have an entire department for population health, how are they doing that? Well, a lot of them are figuring out what parts of the population are likely to have certain chronic conditions or to you know, need visits to the ER need to stay at hospitals. And then they’re trying to figure out how to improve their health outcomes. So that can mean hey, let’s monitor them or let’s give them particular, you know, treatments that will make them healthier, let’s improve their lifestyle. Let’s make sure when they’re about to get sick, or before they’re about to get sick, let’s bring them into the doctor. So that could be things like remote patient monitoring, that could be things like there’s an interesting company out in Florida called Papa which actually lets you lend a grandkid. And they they help check in on you increasing the amount of connection you have to people kind of harkening back to the old article that about real estate could be things like just making sure that you’re you’re triage in between all the noise if someone’s paying you about something, as a doctor, you make sure you’re focusing on high value patients, etc. So, so it’s a really interesting trend and something that Trinity is is going to pay a ton of attention to going forward.

Erasmus Elsner 38:37 
Sounds exciting. Where can people find out more about you and what you’re up to?

John Lin 38:41 
I’m very open over email by email, john at trinityventures.com so my firm focuses across both consumer and enterprise and we’re looking for great startups to fund. So if you have a great startup, especially I tend to focus in a lot of these vertical marketplaces and vertical Saas companies. So as you mentioned, real estate and tech, healthcare and a few other verticals, then please feel free to drop me an email and I’ll get back to you.

Erasmus Elsner 39:09 
Thank you, john, for being with us today. And I’m looking forward to follow your journey. So this is it for today. Cheers.

Leave a comment

Your email address will not be published. Required fields are marked *