A stream of consciousness exploration of what makes a company successful, how founders/investors can be two sides of the same coin and how intangible force multipliers can drive outsized returns.
Very interesting and well articulated piece. One practical observation from my end is that if we go beyond the world of overcrowded startup accelerators where many people joining are too inexperienced and have no idea what they are doing, but towards less leveraged and less risky business models (say a law practice, value added equipment supplier, etc.). I noticed that some alpha comes simply from the decision to start, e.g. a successful lawyer willing to put in the work and accept the risk associated with starting their own law practice has a better chance of succeeding than the EMH would say, because they are willing to put in the work and accept risks that many other lawyers are not. Although you could call it asymmetric information I guess, where the founder has the information that the space is less crowded than many others think.
Let's say we want to invest in smaller cap stocks, how do we execute on identification of outlier culture. For simplicity sake in a reply; how do i know I'm getting an Elon vs a sam bankman? You see clear technical abilities in both and then there's the sales/personality that contribute to eachs success. Is there an effective way to discern the more legitimate signals of excellence vs the people faking it until they make it (or their ponzi scheme explodes)
Very interesting and well articulated piece. One practical observation from my end is that if we go beyond the world of overcrowded startup accelerators where many people joining are too inexperienced and have no idea what they are doing, but towards less leveraged and less risky business models (say a law practice, value added equipment supplier, etc.). I noticed that some alpha comes simply from the decision to start, e.g. a successful lawyer willing to put in the work and accept the risk associated with starting their own law practice has a better chance of succeeding than the EMH would say, because they are willing to put in the work and accept risks that many other lawyers are not. Although you could call it asymmetric information I guess, where the founder has the information that the space is less crowded than many others think.
Loved this, a clear and concise articulation of everything I’ve learned in VC
Let's say we want to invest in smaller cap stocks, how do we execute on identification of outlier culture. For simplicity sake in a reply; how do i know I'm getting an Elon vs a sam bankman? You see clear technical abilities in both and then there's the sales/personality that contribute to eachs success. Is there an effective way to discern the more legitimate signals of excellence vs the people faking it until they make it (or their ponzi scheme explodes)