20VC: Index's Shardul Shah on Why Market Size is a Trap | Biggest Lessons on Pricing from Leading Rounds in Wiz & Datadog | Why Benchmarks & Averages in VC are BS | How Index Makes Decisions and Why Growth & Early are the Same Investing Style

**Shardul Shah** (0:00)
The lessons to learn are, don't be cute on price, don't underestimate fantastic founders, and don't overthink it. TAM is a trap. Go back and look at the S1s of some of the biggest public companies today. Their market caps are bigger than what they thought the TAM would be. The best founders find and expand market opportunities. We are in the business of finding fund returners. The power law dominates our business. Not being in a $10, $20, $50, $100 billion company is actually painful.

**Harry Stebbings** (0:32)
This is 20VC with me, Harry Stebbings, and I'm so excited to welcome today one of the best investors of the last 20 years. Few VCs have not one, but two $20 billion plus companies to their name. Shardul Shah, partner at Index Ventures, and one of the best cyber investors in the business. Shardul has led rounds in Datadog, Wiz, Coalition, Duo Security and many more incredible names. This is an incredible discussion on investing lessons from the last 16 years at Index. But before we dive in, when a promising startup files for an IPO or a venture capital firm loses its marquee partner, being the first to know gives you an advantage and time to plan your strategic response. Chances are the information reported it first. The information is the trusted source for that important first look at actionable news across technology and finance, driving decisions with breaking stories, proprietary data tools and a spotlight on industry trends. With a subscription, you will join an elite community that includes leaders from the top VC firms, CEOs from Fortune 500 companies and esteemed banking and investment professionals. In addition to must read journalism in your inbox every day, you'll engage with fellow leaders in their active discussions or in person at exclusive events. Learn more and access a special offer for 20VC's listeners at www.theinformation.com/deals/20vc.
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**Shardul Shah** (3:35)
You have now arrived at your destination.

**Harry Stebbings** (3:37)
Shardul, dude, it has been so long since we did our last chat. I have aged incessantly, but thank you so much for joining me today, my friend.

**Shardul Shah** (3:46)
Thanks for having me back. Tell me, in all the time you've spent interviewing so many people, what's the number one lesson you've learned?

**Harry Stebbings** (3:55)
There's no right way to do venture. After 2,700 shows, I've learned that one of the biggest mistakes people make is they try and copy someone's style.

**Shardul Shah** (4:05)
Totally.

**Harry Stebbings** (4:06)
That's not authentically theirs and think that's the right one. Actually, it's about finding where you are uniquely great in the three pillars of venture, sourcing, selecting, and servicing, and really leaning into one over others actually. That's been my biggest lesson.

**Shardul Shah** (4:23)
Yeah. It took me a long time to figure that out. Growing up, I grew up outside of Chicago, and so my childhood hero was Michael Jordan. All of the advertisements are be like Mike. Be yourself is actually the message in life and as an investor.

**Harry Stebbings** (4:42)
Do you think that's possible though in venture firms? But if you are a young person trying to scale the greasy ladder of a venture firm, as much as one might hate to say it, with internal politics like many have, you have to adjust yourself to the firm to be promoted. It's a game of strategic promotion.