Canva & Hinge Investor: Why "0 to $2M in 10 Days" Is Just A Vanity Metric.

I personally haven't, haven't tried to fixate on being the best. I've tried to fixate on being the only. There's fundamental genetics to some businesses that are better than others. Probably the $0 to $2 million in 10 days. 9 years later, the company is billions in revenue and it's still 3 SKUs. I just don't think it's possible for most products to have that type of growth.

When Canva disrupted design and Hinge redefined dating, one investor saw it coming. Nikhil Basu Trivedi has backed the companies that didn't just compete, they created entirely new categories. Today he's sharing the pattern recognition that made him one of Silicon Valley's most prescient investors. Everyone, I'm super excited to have my friend Nikhil Trivedi here, co-founder and general partner at Footwork, investor in category-creating companies like Canva, Hinge, Frame, ClassDojo, and the writer of "The Next Big Thing," which I would highly recommend everyone checking out. He has very, very interesting and unique thoughts, which is hard to say these days. So it's great to have you here.

Awesome to be here. Thanks everyone for having me.

So I wanna start at the beginning of your career. You were on the founding team of Artsy, which was kind of digitizing the art world. And these are very intangible things in the art world, exclusivity, status, relationships. And I'm curious what that experience of digitizing something so intangible into software taught you about making things feel elevated in software versus cheapening it.

Yeah, that's a really good question. And I think in some ways at Artsy, we never fully realized the vision of what we originally wanted to build, which was something that democratized the art world and actually brought that level online. I think in many ways Instagram is the platform that has done the most for the art world since Artsy launched. And again, we were started pre-mobile, so it was just like a very different era. But what we tried to do, and what I think we did a nice job, was just being very well designed ourselves, appealing to folks with that taste level. And there was nuance in that design. Like, you know, one of the first features we built was one that enabled you to see a piece of art at the size level for your room. It's sort of like put it in context so you could understand like how big is this work of art.

Pre-AI?

Pre-AI. Wow. And pre-mobile. And I remember us like, putting so much effort into the little way that, you know, you click that button and sort of see like a bench in front of a work of art to kind of get a sense for like its proportions. So maybe the simple answer to your question is just sort of putting thought and effort into the craft of building. It was what we tried to do, which is similar to the craft of making a work of art itself.

Yeah. I mean, we think about that a lot here, but that could be a never-ending journey. It's hard to quantify when design and taste is enough. So how did you know when to stop? Was it just your own intuition? Was it users telling you it was good?

You know, I think again, this was in many ways part of the issue we had. You know, it took us almost 2 years to get to a properly launched version of the product. And you know what? This actually rhymes with the early conversations I had with Dylan Field at Figma. I realize I'm about to go on a tangent here, but I spent a lot of time with Dylan in the early days. I actually helped interview him for the Thiel Fellowship. And so a deep regret of my career is I didn't get involved in Figma. There was a window where I thought, wow, I could have been involved in both Figma and Canva. That would've been amazing. Maybe it would've been challenging for conflict reasons, but that would've been amazing. It took Dylan like 3, 4 years to launch Figma. And so I think what is so difficult about that is you don't have the dopamine rush that comes from putting something out in the world and seeing some early signs of product market fit. You have to be even more convicted in what you're building and how you're building it to operate that way. And so I think a very select group of founders can actually build with that motion. I think probably the magic question is like, does it improve the odds of success in some way if you can sort of hold out and do that? And it's so hard to know if the answer to that is actually true. Does that resonate?

Yeah, it resonates a lot. I mean, we talk about this because it seems like externally the opposite is happening where people are just launching, launching, launching. $10 million in 3 months.

$2 million in 10 days.

And so we actually have a portfolio company that that happened to.

Which is hopefully going to have longevity.

Want to go deeper? Talk to Nikhil's digital mind at delphi.ai/nbt. Has your opinion as an investor, when you evaluate companies, obviously you have the context of Figma and you have the context of Artsy, but there's all this kind of distractions saying you should go faster. Has that changed at all?

It's hard to ignore right now how quickly a set of companies is growing. And seemingly also has durability. And so that only time will tell what unfolds with that set of businesses, but it's very hard to ignore. And so, yeah, I mean, I think I would be, I have to be intellectually honest that it's changed some of the ways in which I evaluate companies in the last year in particular. Just to sort of look for that type of slope or to try to understand, is that type of slope even possible? And then most importantly, to try to detect, is there something in this business that really can stand the test of time? And can we see that in the early days, even that level of slope? Because I do think OpenAI and ChatGPT is a great example of a company that has had an incredible slope, and also seems to have staying power, especially when you look at retention in cohorts that's actually getting better with every new cohort today.

Yeah. Speaking of durability, are there any things you've seen founders you work with, things they do early on that has optimized for durability and timelessness, or are those usually things that are after the matter? ChatGPT, again, it didn't seem like they were planning for it to be this crazy thing, so it can go either way.

And then I think like certain products they've launched such as Memory have dramatically, have sort of improved the flatlining level of retention even further along the way. Yeah, that's, you know, I think my perspective has always been there's fundamental genetics to some businesses that are better than others. And so some level of like durability is governed by the genetics of the business or the market and is therefore outside of your control. I'll give you an example, two examples from my own portfolio. Invested in two consumer subscription businesses at my former firm Shasta that have both, one is almost at a billion dollars of revenue and one's a couple billion of revenue. Hinge, which is a dating app company, and The Farmer's Dog, which is a pet food business. They are both of amazing scale. But when you look at the layer cake of those two businesses, there's a difference. One of them has cohorts that still, you know, 9 years later are amazingly active and the other doesn't. It has— well, so Farmer's Dog in the pet category, your dog eats the same food every day, 3 times a day for their whole life. And so you just have amazing genetics in that business and in that product versus in the dating category, you just have natural churn and you do also have resurrection of users who come back, but you have natural churn and in fact, success with churn. I think the status is 1 in 10 marriages in the US today have started with a match on Hinge. And so—

Is that on the board deck?

That's amazing. That's incredible that that is actually the case and that's success for the company, but it also means a different type of business genetics at scale. And so I think a lot about that with every business. And I think that there's like a, a source moment in picking the product and business that you're going into that manifests itself in the retention at scale. And then of course there are things that you have some level of control in beyond just that big bang moment. Does that resonate with folks?

Yeah. And then on Hinge, designed to be deleted. Most consumer companies are focused on building habit-forming tactics where Hinge is almost the exact opposite. Though I imagine there's a world where you can build a dating app where you don't care about the outcomes of the users and you want them to stay as long as possible. As an investor, how do you see companies optimizing for what's good for the business model versus what's good for the users?

At the end of the day, what's best for the users typically wins out in the long run. And I especially think in the moment in time we're in right now where pricing of products is becoming more usage-based versus just subscription-based. It's even more true than it was 10 years ago. So that's certainly my bias.

Yeah. On pricing and companies that are generating billions in revenue, you have an essay that talks about how unicorn was a vanity metric and what you want to be talking about is companies that make billions of dollars of revenue. Is there a new vanity metric that you see recently that you're like, people should not be optimizing for that?

I mean, it's probably the 0 to 2 million in 10 days.

There we go.

I just don't think it's possible for most products to have that type of growth. And I think we're going to see some amazing generational businesses that don't have that type of growth and can't possibly have that type of growth. And I think we're going to also see some flameouts from companies that have that type of growth in the early days. So I found that whole conversation pretty silly.

I agree with you. And to get to a billion in revenue, are there signals in the companies you evaluate that show they have the capability to do that? Because it seems like a lot of the companies that do, ultimately they find a business model and it's after the fact versus planning early on, this is what's going to make us billions in revenue. Especially on the consumer side.

Yeah, I think I'd actually refine your take there a little bit, which is less about finding the business model and more about creating the market, expanding the market that ends up supporting a business that's billions in revenue. So I think there's two types of businesses that ultimately get there, right? One is in an existing market that is many billions in spend and you capture some share of that and you get there. And the other, and actually I think, I mean, I haven't done deep analysis on this, but I think likely the more reasonable way, an actual way that businesses have gotten there is creating the market themselves. I mean, look at ChatGPT. That's not spend that I think came from somewhere else that suddenly has been captured by them. It's a whole new category of product and spend that they've created through a jaw-dropping experience and a sort of brand that has grown through word of mouth. And so that's the type of business that I tend to get more excited about is one that, you know, it's, the thesis has to be this company's gonna go create a whole new market or expand the market dramatically to get to many billions in revenue because you actually can't point to like an existing market that takes you there. And then the signal back to your question that that's possible is I think a combination of just magical product experience that is blowing people away, that's leading to a new set of people getting excited about this idea that wouldn't possibly have spent on this product until it came along.

Yeah. And in creating new markets, you're often creating new habits. And you have people who really understand the new market, then you got to cross the chasm and get to everyone else. I'm curious, in the companies you've invested in that have created new markets, How have you seen them most successfully own the narrative and educate the market? Is that something intentional or is it just a result of the product?

My bias as an investor has always been like, you know, the product is the more important thing. And so sort of that jaw-dropping experience can kind of create a word of market flywheel, a word of mouth, you know, effect. I think I've had to tweak that over the years, right? Like there is a set of companies that have pretty good products but have nailed the brand, the messaging, the positioning, the distribution. I think an interesting example is what's unfolded in expense management with Brex versus Ramp. And what I've heard is a lot of folks say Brex is actually the better product. But that Ramp has done an exceptional job on brand building and marketing and just the way it speaks to its customer has helped it kind of go from, you know, for sure second later mover to perhaps now being the leader in that space. So I think the reality is both matter. Product matters and brand absolutely matters when the two come together. It's a magical thing to build an enormous company. And then I think we can have lots of debates on which is more important. Yeah, I think my bet is it actually depends on the era. A part of me feels right now like I actually underestimated first mover advantage in certain markets. You think about ChatGPT, B2B examples. I think ElevenLabs has done an exceptional job in its space. Of sort of being first mover, building a brand, maybe also building a better product than anyone else. So those are some of my thoughts on this.

One of my favorite essays that you've written is that the best companies are both consumer and enterprise. And so I would love to hear an example of a time you've seen a company cross both sides. And then second part of the question is, again, is that something that you plan or just— Yeah. The opportunity presents itself?

Yeah, so, and this is the flavor of company that we most love at Footwork, which is a company that's ambitious enough to go after both consumers and enterprises. I've always hated, this is part of what I've found frustrating about most other venture firms is they delineate consumer businesses versus enterprise businesses. They have a consumer team and they have an enterprise team that looks at different companies when In my mind, the most powerful companies, the most interesting ones end up being both. And if you look at the biggest companies in the world, NVIDIA, Alphabet, Microsoft, these are all consumer and enterprise businesses. And now of course OpenAI is the canonical private company example. So to answer your question around the sequencing and what I've seen, I do think the majority of companies I've seen pull this off have started on the consumer side. And then consumer distribution, building a brand has also enabled an enterprise business. And so the best example in my own portfolio is a company called Canva in design software, which has organically grown amongst consumers and prosumers and then infiltrated the enterprise over time. And today at more than $3 billion of annual revenue, about half of that is from consumers, prosumers, half of that from enterprise. I think you asked, did I see something in there in the early days?

Was that clear that that would be the case?

What I'll say about that one is from the earliest days, Canva had usage across so many different personas and use cases.

Yeah.

And I think the thing that people analyze their way out of about Canva is it's being used for all these different things. Like, what does it stand for? It's not a presentation tool. It's not, it's not just for like infographics or for social media posts. It's not just for like wedding invites. People are doing all of these things on Canva. So like, it's really hard to put it in a box.

And what— Means a lot.

And what turned out to be the case about Canva is the magic is that people are using it for all these different things. And so, you know, a lot of people comped Canva to Adobe or still today comp Canva to Figma. But I actually think the comp for Canva is Google and Microsoft. It's the entire suite that they're going after. So I think the breadth of usage indicated that it was possible, but has it exceeded all my wildest expectations since I met Mellencamp in 2014? Absolutely. It's been an amazing journey.

Another one of your essays, you talk about how prioritization can be a founder's superpower. In these approaches—

It's great.

Yeah.

I read all the essays.

I didn't actually look at your— your schedule to prepare for this, but this is awesome. It's like revisiting my own mind.

Yeah, that's what we're trying to do. We're trying to traverse your mind so that we can recreate it. Is there a founder that you worked with that took prioritization to another level where you were actually surprised by how focused they were?

In 2016, I met a company called The Farmer's Dog in the pet food space. Simple idea. Dogs eat these little burnt brown bowls, kibble, and that's not really what they're supposed to be eating. They should be eating real food. And so let's deliver real human-grade food to dogs, direct to consumers. 3 SKUs, 3 different recipes. 9 years later, the company is billions in revenue. And it's still 3 SKUs. And if you went back and you video recorded our board meetings from 2017 to 2020, I consistently pushed the company on what's going to be the next act. When are we going to go beyond just this? And the reason for that is what we had with these 3 SKUs was really working, You could see that in how quickly the business was growing, how well it was retaining customers, the wide variety of people that were actually attracted to The Farmer's Dog. I think people thought in the early days this is something that's only accessible to a small fraction of the population, but it turns out there are so many people that care about their dogs just as much, maybe even more so than their kids, than other humans in their household. And so there's absolutely willingness to pay from you know, almost anyone for the farmer's dog. And so I think what the founders, Jonathan and Brett, got so right that I didn't believe enough in either is just how big that initial market that they themselves were expanding could be. And they were totally right to just focus on nailing those first 3 SKUs, that first basically one product business. And that focus has enabled them to crush everyone in the space, both from a product and ops standpoint and from a marketing brand standpoint.

I'm curious from the perspective of starting a fund, what did you decide to copy from what VC firms have done and what did you decide to reject and take your bet on? As you said, the most successful people are doing something differently. What was your different?

Yeah. First of all, I think when you start a venture firm, it's very difficult to convince yourself that the world needs just another venture firm. And if I'm being intellectually honest, Mike and I, you know, we struggled to believe that. But what we really did believe is that founders will benefit from our firm being in existence. And so that's kind of like the reason we felt we've got to go do this. If that makes sense.

Yeah.

Of course we drew inspiration from other firms. So we are, you know, an equal partnership firm. We are a combination of investors and operators as our partnership. We just make a handful of investments every year. We just do early stage, you know, that rhymes with firms like Benchmark and USV and others that we, respect. But I think our own flavor on it is mixed in. And so there's certain things that we do that are pretty unique. So every time we make an investment, Mike and I actually both go to the board meetings of the company together. We really try to have all the founders that we work with get to know both of us. We don't think at all about which are Mike's investments versus my investments. Like I have no, idea how to delineate the portfolio on that basis. And we think it's weird that other firms talk about, you know, it's X person's investment versus Y person's investment when all that matters is the portfolio being successful. And as a firm bringing to bear everything we can to have each individual company maximize their probability of success. So that teamwork element, and sort of no attribution was one thing that we were desperate to do differently versus almost every other firm.

A couple final questions and I want to open it up to the team. This is a question we ask every person who comes here and every person we interview. What's the darkest moment of your professional career and what did that teach you about resilience?

Yeah, the darkest moment was in late 2019. I was at this firm, Shasta Ventures, where I was really lucky to be involved in some amazing investments. A couple of the partners that I was closest to at the firm left the firm. And suddenly I was in a partnership with folks who I was least close to during my whole tenure at Shasta. And I realized that this was not going to be the place for me for the next, 10 years when you've invested and you've given so much to an organization and in a job like venture where you sort of have to see it through for a long time horizon to actually have it fully bear fruit, it's really difficult. And so that was a really painful and challenging moment when you're out in the cold the warm blanket is so inviting. And so the other part that was challenging about that is, you know, I had opportunities to go join other firms in that window because people kind of caught wind that I was likely going to leave. But I felt in my heart of hearts that I had to go start a new firm and that I would deeply regret it if I didn't go down this path.. And so resisting the warm blanket also became actually a really difficult thing to go off and try to pursue this. And so yeah, that was, you know, and it, I feel really lucky because that isn't that dark of a moment. And of course I've had moments where companies haven't worked and we've lost our money. But I think those moments as a VC, are challenging, but they're not dark like they obviously are for the founders and the teams. And so I feel super fortunate that I haven't had those moments. Now, once you found a venture firm, you care about it more than anything else, just as if you founded a venture-backed company or if you founded a restaurant. And so I'm hoping I don't have dark moments in the Footwork chapter, but But the highs will be higher and the lows will be lower.

Yeah. Last two questions. What's one question you wish you were asked more? Doesn't have to be about VC or startups.

Yeah, I think it's probably about should I take venture capital in the first place? Because I think we are so obsessed in this city and in this area with VCs and with this path of raising capital to build companies. And to me, that's not the point. And I think that has gotten lost in certain moments in Silicon Valley where the obsession is about who's raising money and from whom, where the point is to build exceptional products that people end up loving using and that improve their lives as a result, and then to build great businesses. And not all of those are venture-backed businesses. And so that's probably the thing that most comes to mind.

And last question, if your Delphi were to outlast you 100 years from now, 200 years from now, what is one piece of wisdom you'd want it to pass down from your life that's representative of you?

So I think the one piece of wisdom based on my writing and thinking would probably be that the next big thing can be built from anywhere and by anyone. And by definition, as I said earlier, the outlier companies, the exceptional companies are built by exceptional people, don't follow the traditional patterns and norms and they just take a different path. And I think what has always resonated with me about that framing is, I think it also applies to one's own career. By definition, if you want to have a great career, an outlier career, you have to take some risk. You have to do something different. And it's not going to happen just from following the perfect path or the thing you're supposed to do. So that's kind of, it's like career advice that I, when I'm asked about, have given. And it, I think also applies to just building the next big massive business.

Yeah.

My question revolves around what kind of philosophy is important for company building? Like in the Valley, people usually like to refer to the lean startup method where you are aggressively doing these micro bets and, you know, you're really heavily listening to users and A/B testing stuff.

Yeah.

Like you really focus on looking to your competitor or is it more so the zero to one philosophy where you call your shot and do the hard thing and believe in your conviction and you just merge product market fit and the market adjusts based on that?

Yeah, I mean, Again, I've seen literally, I have perfect examples of both turning into great businesses. Part of the reason that they've each worked is there's a match between the founder's style and team culture and product and market as well. So like Frame.io is this product that enables sort of collaboration on the creation of video. And Adobe ended up acquiring the company for $1.3 billion a couple years ago. It was lucky to do the Series A. Frame.io is super in that second camp of like everything had to be perfected before they launched it. And one of the values of the company was perforate the sticker. Which is referring to how Apple, when you unbox something, the sticker perfectly perforates and makes it this delightful experience. And so they were so focused on perfection versus many companies, as you know, that were more lean and iterative and just launched stuff super quickly, got it out there, high velocity. And I think the reality is both can work, but in Frame's case, I think it worked. It was very important in hindsight to be that way because their user wouldn't have accepted something that was MVP-ish. Storage needs to work really well. There's a bunch of aspects of the types of customers they're selling into where you needed a perfected product to serve them. And then also the brand of the business was built based on that culture and methodology. And you could kind of, everything they did, like the product launch videos oozed that. And so that all just felt authentic. It led to something that stood out in the market. So I think, I hope that helps. I think it's like the authenticity that bleeds into everything else. Your customers will feel it if you're doing it in that authentic way.

Yeah, Sam. Sam?

What's up? Thank you for coming. Something that I respect about you is I think you take the craft of venture very seriously, the way you talk about it. And one of the things that I've felt a lot in the last couple of years of being a founder is that you look at the people who become the best in any field, and there's just a lot of patterns that you see across it. And I'm wondering, it's always interesting to ask people who are trying to be the best in a field what their process is to go into that. So I'm wondering when you're thinking about how do I become a better venture investor and hone my craft, what are the things you're doing to try and get better?

Yeah.

A couple things come to mind. One is I personally haven't tried to fixate on being the best. I've tried to fixate on being the only. And so that framing, at least for my own brain, has been helpful because the best is sort of an output metric. And I think, I don't know, we can see what my dollars in versus dollars out is relative to everyone else who's been on the Library of Mines, I think it stacks up pretty well even versus some very loud people who haven't had multiple companies generate billions in returns. But being the only has been a very helpful framing for me because that feels more like input-driven based on where you came from and based on the the journey that you've had, like something more controllable. How I think about the craft though on a daily basis is just, it's actually a little bit of where the name Footwork comes from, which is, you know, constantly having to like maneuver and adapt and learn and change oneself. I think is what's required in like any profession and do it really well for a really long period of time. Because things change. And so you have to figure out how to reinvent yourself. So there's a part of that even in like the word Footwork that I love. And then I have other little like things that I try to do. So as an example, Mike and I have done the blank sheet exercise every year for Footwork where we say if we restart the firm today, What would we do? And we found that really clarifying. It's something I actually encourage every company to do. Just put everything aside for a second and then do the blank sheet. I feel for me personally, blank sheet is a more helpful way to say it than zero-based budgeting or other ways you can describe this. So that's another approach that has helped me to sort of think through how do I have to evolve, how do I have to grow? And then, yeah, I mean, I look up to people who've done it for a long time and tried to study them as well and sort of learn from the best too. Is that?

Thank you. Yeah.

Awesome. Thank you so much.

Yeah.

The one and only Nikhil. Yeah.

Thanks so much, man.

This is fun.

Thanks.

Yeah. Thanks for tuning in. For personalized advice from Nikhil, head to delphi.ai/nbt and ask his digital mind.