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Prepared by Andrew Chen for
"The red flags and magic numbers that investors look for in your growth metrics (80 slide pdf). Notes live here. I created this deck as part of my interview process at Andreessen Horowitz. I talk through Growth Accounting, why lagging indicators aren't that useful, and how to evaluate Acquisition and Engagement loops"
Thanks for reading this - I originally published this deck with the note below on my blog - you can read the details here:
Hope you enjoy :)
San Francisco, CA
Earlier this year, I joined Andreessen Horowitz as a General Partner, where I focus on a broad spectrum of consumer startups: marketplaces, entertainment/media, and social platforms. This
was a big moment for me, and the result of a long relationship that began a decade ago, when Horowitz Andreessen Angel Fund funded a (now defunct) startup I had co-founded. One of the
reasons I've been excited about being a professional investor is the ability to apply my skills as an operator. The same skills needed to grow new products can be used both to evaluate new
startups to invest in, and once we've invested; to help them grow.
The reason for this is that the steps for starting and scaling a new startup share many of the same skills as investing in a new startup: 1) First, we seek to understand the existing state of
customer growth including growth loops, the quality of acquisition, engagement, churn, and monetization. 2) Then, to identify potential upside based learnings from within the company as
well as across benchmarks from across industry. 3) And finally, to prioritize and make decisions that impact the future. Of course, as an investor you can't run A/B tests or analyze results
directly, but you can form hypotheses, ideate, and apply the same type of thinking.
As part of my interview process at a16z, I eventually put together an 80 slide deck on how to use growth ideas to evaluate startups. In the spirit that this perspective can help others in the
ecosystem, and to share my my thinking, I'm excited to publish the deck below.
Disclaimer: This was just one presentation in a 10 year relationship
But before I fully share, I have a disclaimer. This is one presentation I made within a series of dozens of meetings and interactions I had with the Andreessen Horowitz team. It was just one