1. Why did you pick the name Two Small Fish Ventures?
There is a Bible story about two small fish. One day Jesus was speaking to more than 5,000 people in the wilderness. When the night was near, the crowd showed no sign of leaving. Instead of asking the crowd to go, Jesus told the disciples to feed the crowd. In response to this impossible task, a child brought forward all he had – two small fish and five loaves of bread. There, Jesus performed the miracle of feeding and satisfying over 5,000 people with only two small fish and five loaves of bread, and still had twelve basketfuls of leftover.
We are inspired by two small fish. They weren’t big in size, and weren’t supposed to be used for a delish cuisine. And yet, they fed and satisfied over 5,000 people!
We want to be like the two small fish. By sharing our experience, knowledge, resources and connections with other entrepreneurs, we can help create a lot of startup successes.
2. What’s your investment criteria?
We want to focus on early-stage, transformative tech companies with strong network effects. We would like to see your product has at least beta launched with some early traction and user growth (can be small). Your company must have the potential to become a global tech giant. In addition, we only co-invest in a round of funding that has a lead investor. Finally, we only invest in companies that make the world a better place.
Visit Our Thesis for more information.
3. Why at least beta launched?
We are product people. We love to try things out and that’s how we can fully comprehend the product and see the vision that the entrepreneurs see. While having a brilliant idea is crucial, for the company to be successful the execution of the idea, i.e. the product, plays an even more important role. Therefore, we only invest in companies that have at least beta launched.
4. Why only strong network effect companies?
The internet revolution is the new industrial revolution because the internet is very different than any other technology that comes before it. It is the first technology that simultaneously connects billions of people and devices in real time. It is free. And it is increasingly wireless. All these mean that there are so many things that were impossible before are now becoming possible. Although it has been 20 years since the commercialization of the internet, we believe the internet revolution is still in its infancy with so many opportunities ahead of us.
That being said, with the advent of open source and social media, knowledge has been shared unprecedentedly. This means that technology alone no longer makes a business defensible. If you have built a proprietary technology, you can safely assume that there are 1,000 people around the world building something better, faster, cheaper and more powerful than yours. And they would give their products or services away for free. You just have never heard of them.
One powerful way to create barriers to entry is through “network effects”. A network effect is the effect that one user of a service has on the value of that service to other people. When network effect is present, the value of a service increases as others use it. At scale, the network effect can become so powerful that it makes a company extremely difficult to compete with, even for competitors with next-to-infinite resources. We have seen this in Facebook, Twitter, YouTube etc., and are experiencing this first hand in Wattpad. We are fortunate enough to have direct experience in creating viable businesses with strong network effects. We have seen the evolution – from signing up the first user to scaling to millions of engaged users. Our unique experience and know-how can help entrepreneurs leverage network effects to make their businesses very defensible. That’s why we only want to invest in internet companies that have strong network effects.
5. What is the ASSET framework?
The ASSET framework, created by Eva Lau, has been adopted by many entrepreneurs and accelerators to help their companies develop their network effect strategies and make them more defensible. Watch the following short video or visit Our Thesis for more detail.
6. What if my company is the next big thing but not fitting your criteria, will you still be interested?
While there is always an exception to the rule, it is unlikely that we will invest in companies that do not fit our investment criteria. As entrepreneurs ourselves, we know the golden rule is to relentlessly say no in order to stay focused. Please don’t get offended if we say no to you. There is a good chance that you are building the next big thing even we don’t invest!
7. How do I reach out to you and tell you about my company?
The best way to get in touch is a referral by someone who knows us and believes in you.
If you don’t have any referral but strongly believe that your company is a great fit for TSFV, we would still love to hear from you! Please send us your elevator pitch to email@example.com. If your company and TSFV are a mutual fit, our assistant Nemo will help find the best way for us to chat.