The Twenty Minute VC

Danny Rimer: The Biggest Lessons from Missing Snap, Airbnb, Spotify and Facebook | E1166

Danny Rimer is a Partner @ Index Ventures and one of the most prominent VCs of the last two decades. Danny has led Index to be one of the top global firms on both sides of the Atlantic. Among Danny’s incredible portfolio, he has led or been involved with Figma, Discord, Dream Games, Etsy, Glossier and Patreon. ----------------------------------------------- Timestamps: (00:00) Intro (01:07) Background (03:31) Takeaways & Learnings from James Barksdale (07:17) Decision-Making Approaches in Investing Partnerships (11:42) Thesis-Based Approach in Investing (16:25) Balancing Founder Enthusiasm with Market Concerns (19:12) Preventing Bias from Past Investment Outcomes (24:07) Evaluating Market Timing Risk in Investments (27:36) Key Lessons on Managing Effective Reserves (31:24) Massive Funds vs. Boutique Specialists (36:06) Sourcing, Selecting, Servicing: Strengths & Weaknesses (42:21) Reflecting on Missed Investment Opportunities (44:24) What is a Big Success (49:58) Lessons & Takeaways from Snap (52:48) The Facebook Calls Discussion (56:24) Unlikely Founders Who Became Incredible (01:02:19) Giving an Effective Feedback (01:07:48) Assessing Europe's Startup Landscape (01:14:20) Quick-Fire Round ----------------------------------------------- In Today’s Discussion with Danny Rimer We Cover: 1. The Biggest Lessons from Missing Snap, Airbnb, Spotify and Facebook: How did Danny miss investing in Brian Chesky and Airbnb when Brian says “Index is the best investor that Airbnb never had”? What was Danny’s biggest takeaway from turning down Daniel Ek and Spotify multiple times? Why did Danny turn down the chance to invest in Facebook at $10BN? What did he learn from this? Why did Index not lead Snapchat’s Series B? How did that decision change Danny’s mindset towards the concentration of positions in a fund? 2. The Biggest BS Rules in Venture: Market Sizing, Valuations and Signalling Why does Danny believe that “valuation is a mental trap”? Why does Danny believe that TAM is “noise” and should not be used to assess an investment? Why does Danny believe that stage and geo-specific funds are BS? Why does Danny believe there are no IPO windows? Are IPO markets always open to the best? Why does Danny believe that signalling is BS and does not exist today? 3. Lessons from the Biggest Wins and Losses: What are Danny’s biggest lessons from Index’s $BN win in King (Candy Crush)? How did the Discord deal come to be? What are Danny’s biggest takeaways from it? What are Danny’s biggest reflections from losing 10s of millions on Nasty Gal? What is Danny’s biggest advice to a new investor today? 4. Lessons from Two Decades Building Index into a Premier Firm: What specifically has Index done to enable them to do what no one else has done and win on both sides of the Atlantic? How did the Benchmark partnership shape much of how Danny has constructed Index today? Who does Danny view as Index’s biggest competition? How has it changed with time? Why is Danny more bullish than ever on the UK despite Brexit? ----------------------------------------------- Subscribe on Spotify: https://open.spotify.com/show/3j2KMcZTtgTNBKwtZBMHvl?si=85bc9196860e4466 Subscribe on Apple Podcasts: https://podcasts.apple.com/us/podcast/the-twenty-minute-vc-20vc-venture-capital-startup/id958230465 Follow Harry Stebbings on Twitter: https://twitter.com/HarryStebbings Follow Danny Rimer on Twitter: https://twitter.com/dannyrimer Follow 20VC on Instagram: https://www.instagram.com/20vchq Follow 20VC on TikTok: https://www.tiktok.com/@20vc_tok Visit our Website: https://www.20vc.com Subscribe to our Newsletter: https://www.thetwentyminutevc.com/contact ----------------------------------------------- #20vc #harrystebbings #DannyRimer #index #snapchat #facebook #partner #etsy #discord #spotify #airbnb

Danny RimerguestHarry Stebbingshost

Jun 16, 20241h 24mWatch on YouTube ↗

WHAT IT’S REALLY ABOUT

Danny Rimer on focus, founders, and learning from billion‑dollar misses

Danny Rimer, partner at Index Ventures, reflects on two decades of venture investing, emphasizing ruthless focus, founder quality over theses, and disciplined decision-making. He shares painful stories of missing or underweighting Facebook, Snapchat, Spotify, Airbnb and others, and how those scars reshaped Index’s approach to TAM, valuation, and reserves. The conversation dives into Index’s internal mechanics—voting, thesis ‘majors and minors,’ multi-stage reserving, exit discipline, and scaling globally while staying a “scaled artisan” rather than an asset gatherer. Rimer also explores founder psychology, brand and scarcity, cultural differences between US and European entrepreneurs, and the personal tradeoffs of building a global firm while maintaining family priorities.

IDEAS WORTH REMEMBERING

5 ideas

Keep the main thing the main thing—focus over optionality.

Rimer credits Jim Barksdale’s mantra for Index’s refusal to chase every geography, sector, or fund flavor. Saying no to India/China platforms and mega-fund trajectories preserved cultural cohesion and investment clarity.

Back extraordinary founders even when the market or thesis looks wrong.

Experiences like passing on Spotify due to prior music scars led to a core rule: if the founder is truly exceptional at seed/Series A, suspend disbelief about TAM or category and back the person.

TAM and early valuations are often misleading and should be down-weighted.

Index now treats market-size estimates as “noise” after consistently underestimating outcomes (e.g., Airbnb creating new inventory rather than cannibalizing hotels) and misjudging ceilings in social (Instagram/Snap, Facebook at $10B).

Build institutional discipline around both investment and exit decisions.

The partnership uses a structured voting scale (no 5–6s) to force conviction and unanimity for best deals, and separates the “deal partner” from ultimate exit decisions to avoid emotional attachment and optimize LP outcomes.

Thesis work is for clarity and speed, not for filtering out anomalies.

Index’s ‘major/minor’ thesis system (e.g., fashion as a social lubricant) is used to organize thinking and be ready to “pounce,” but Rimer stresses that rigid adherence can cost you outliers and must be overridden for exceptional founders.

WORDS WORTH SAVING

5 quotes

The main thing is to keep the main thing the main thing.

— Jim Barksdale, as quoted by Danny Rimer

If the person’s extraordinary, throw all theses out the window and just back the founder.

— Danny Rimer

One of our tenets is definitely that market-size TAM is noise.

— Danny Rimer

Most companies create brands as a byproduct of a great product. So scarcity and brand really go hand-in-hand.

— Danny Rimer

We’re not much better, if any better, at this game. All you can do is learn from your partners and from the history of mistakes that you’ve done prior.

— Danny Rimer

Decision-making frameworks at Index (voting system, snake rule, theses)Lessons from missing or mis-sizing Facebook, Snap, Spotify, Airbnb, etc.Founder quality vs. market thesis and the limits of TAM analysisFund strategy: multi-stage capital, reserves, exits, fund size, and cultureBrand, scarcity, and positioning in both startups and venture firmsUS vs. Europe: founder psychology, sourcing, and Index’s geo strategyPersonal dimensions of venture: failure, ego, family, and long-term growth

High quality AI-generated summary created from speaker-labeled transcript.

Get more out of YouTube videos.

High quality summaries for YouTube videos. Accurate transcripts to search & find moments. Powered by ChatGPT & Claude AI.