Network effects

Pete Flint — aka Trulia co-founder who bought Latitud co-founder Brian lunch in the early days (for real) — is a General Partner at NFX, a VC firm investing in pre-seed and seed round-stage startups.

But not in every startup, no no. In those that have the potential of building network effects.

Uuh, mind-blowing, Greta, but what even are network effects?

Simply put, when the number of users of the product or service of a startup increases, the value it provides also increases. In Pete’s words: the more people use it, the better it gets for every other user.

Common examples are marketplaces, social networks, and also B2B networks.

Companies like Slack, Uber, Airbnb, and WhatsApp have built incredible network effects around their businesses — Like, can you imagine Whatsapp with just you and your uncle?

💡 If your eyes have just lit up, follow Pete's advice: take the mental model of a company that understands network effects and build on it.

If you were to hire Slack tomorrow to build your product, how would they approach it? What would they change to make sure the value you add to existing users increases at a compounding rate as new users jump in?

Gave you something to think, huh?

While you can have more of Pete’s tips on his podcast episode, you're still not part of Pete’s network effect – and by that, we mean something else 😎

The other network effect 🚀

Yes, Daniela, you got it right 🌟

The other network effect is the one made by your network of contacts: your community, aka the human relationships you get to build as a founder, investor, or operator.

An effect that goes beyond your product or service.

Monashees is a venture capital firm that invests in disruptive startups that are going WILD. And Marcelo Lima, partner at Monashees, thinks that while every industry is open to disruption, there’s nothing more game-changing than a relationship of trust and conviction between founders and investors.

And he doesn’t mean just being honest about the red numbers.

It has to do more with being an active partner for the founder and a shoulder to cry on.

💡 Over and above that, when looking to enhance your network effects, connect with those willing to open doors for you:

• mentors that get you in touch with tech operators,
• entrepreneurs that introduce you to possible co-founders,
• or people from the ecosystem that would shout out all the good shi*t you have.

Do the same for them. At the end of the day, the startup game is very much based on the relationships we are able to build.

🚀 This September 21st, Pete Flint and Marcelo Lima will be joining us atVamos Latam Summit to share their ideas on building successful companies, raising capital, and facing the current market changes in Latin America.

We can’t think of anything better to enhance the effects of both of your networks than to meet IRL some of the top minds of the LatAm startup ecosystem – on and off stage.

And yes, you could listen to Pete’s and Marcelo’s podcast, but come on, Fernando, don’t be boring… they sound better in real life.

Use the code EarlyBird25 to listen to them with a discount

Hot News Ahoy! ⛵

🔥 Latú sets new record

Last week, Latú Seguros, the startup founded by Latitud fellow Paola Neira, raised US$ 6.7M in a pre-seed round led by Monashees (whom you know way better now) and CRV. This is the largest pre-seed round reported in LatAm so far.

🛍️ Eyes on the prize (and we mean profit by that 💸)

Auronix, a Mexico-based SaaS startup that provides conversational messaging solutions, has raised US$ 14.5 million in funding from Alloy Capital to expand with sustained growth and increase the company’s profitability.

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-> Every time one of your friends subscribes to our Newsletter, a pre-seed investor stalks your LinkedIn profile. Really! So forward this to your network!

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