> You should try to limit yourself to opportunities that could be $10 billion companies if they work (which means they have, at least, a fast-growing market and some sort of pricing power). The power law is that powerful. This is easy to say and hard to do, and I’ve been guilty of violating the principle many times. But the data are clear—the failures don’t matter much, the small successes don’t matter much, and the giant returns are where everything happens.
This is the main reason why most people should avoid VC money. As a founder/employee all of your eggs are in one basket and the chance of having a billion dollar exit is practically 0. VCs get to raise billion dollar rounds, live off of the 2-3% management fees and go around spraying and praying with the hope of hitting a unicorn. If that doesn't work they take their top donkeys and try to pump and dump them, marking up their investments in the process in order to raise another round.
I have a feeling that this is all past results that don't guarantee future performance. It is tuned to the time when Google, Amazon and Facebook were created - but this evolution phase is over.
From Ben Thompson newsletter:
"""
where would $1 have been best invested on March 25, 2015, when Altman wrote his post?
* SAP 500: From $2061.05 to $3,234.85, for a CAGR of 9.87%
* Big Tech: Apple ($714.84 billion -> $1,321.6 billion), Microsoft ($338.6 billion -> $1,210.1 billion), Google ($386.1 billion -> $938.6 billion), Amazon ($172.5 billion -> $929.6 billion), Facebook ($230.9 billion -> $595.1 billion) = +$3,152.06 billion and a CAGR of 23.14%
"""
plus correction:
"""
However, I did err by not including dividend payouts, which are basically reassignments of market cap to individual investors. Interestingly, this results in an annualized S&P 500 return of 11.7%, which actually beats the unicorn basket annualized return of 11.6%! More on this in a moment.
VCs aren't all the same. Despite Sam Altman's advice there are many which pursue a lower risk / lower return model, possibly focused on a particular vertical. They may be less famous and won't necessarily have offices on Sand Hill Rd, but their money is the same color.
This advice sounds overfitted to the current economic environment which is founded on fiat and is therefore highly artificial and not based on real value that people earned doing useful things.
Once the fundamentals of finance change, this advice will be no longer valid.
The tech economy is based entirely on monopolizing user attention, this is not a natural state of things.
The current winner-takes-it-all tech economy has created a much bigger and growing army of highly skilled losers, there are enough of them that they can distort society and governments.
I think Bitcoin, Brexit and Trump are the product of a growing class of people who are just beginning to exercise their collective power.
I'm optimistic about cryptocurrency because I believe that every generation will invent a new way to legally take or inflate away the wealth of the previous generation. If an earlier generation was able to manipulate governments to the point that they abandoned the gold standard for fiat, then the new generation can easily manipulate governments to abandon fiat for cryptocurrency.
There is nothing the elites can do about it, there are too few of them. Centralizing economic forces are making them richer but also shrinking their numbers.
“ The spectral signatures of the best companies I’ve invested in are remarkably similar. They usually have most of the following characteristics: compelling founders, a mission that attracts talented people into the startup’s orbit, a product so good that people spontaneously tell their friends about it, a rapidly growing market, a network effect and low marginal costs, the ability to grow fast, and a product that is either fundamentally new or 10x better than existing options.
You should try to limit yourself to opportunities that could be $10 billion companies if they work (which means they have, at least, a fast-growing market and some sort of pricing power). The power law is that powerful. This is easy to say and hard to do, and I’ve been guilty of violating the principle many times. But the data are clear—the failures don’t matter much, the small successes don’t matter much, and the giant returns are where everything happens.”
This is just one type of company and limiting yourself to just that is limiting and a driver to some of the mind bubble issues in SV.
The purpose of start up investing is to find companies that are going to become more valuable. In order to do that you need to predict what other later stage investors are going to find valuable. You're not there to change the world, you're there to flip a dog-walking service for 10x return. So that dog walking service better be run by a tall white guy who practices yoga and constantly talks about transforming the world.
One example of a type of company where decacorn-or-nothing investing doesn't work is biotech / pharma, which is the second biggest VC sector after pharma
Cash on cash returns from seed investing in the biggest biotech companies are an order of magnitude lower than tech. Series a investments in the biggest biotech startups are about half that of tech. This is despite the fact that the companies grow to comparable sizes on comparable amounts of capital [0]
Value inflection happens later in biotech than software. Software startups can get product market fit on seed capital, but the biggest value inflection in biotech is human proof of concept, which costs tens or hundreds of millions
If you invest in biopharma you should focus on lower loss rates (ie do good technical diligence) and concentrate bets in winning companies
Well there are a lot more types of successful company than there are companies that are successful investments from outsiders. A high school friend of mine has a successful house painting business that does millions of dollars per year but he grew it the old fashioned way by bootstrapping and I don’t think it would have ever been a viable investment candidate.
> This is just one type of company and limiting yourself to just that is limiting and a driver to some of the mind bubble issues in SV.
I think the idea is that since such a high percentage of startups fail or provide low returns you need to find these huge wins to make money in the long run.
And finding one huge win every ~5 years might be easier than finding a bunch of smaller wins every year.
Can you list any of the companies you invested in? I'm very skeptical that start-ups are just sitting around that have this potential would allow any random angel person to invest.
Moreover, the probability of find a $10B+ exit happens only about 5 times per decade (10 years), so the chance that you got into one is very unlikely.
What?! This almost reads like you're saying the market rewards behavior that doesn't really create a variety of competitive and useful products.
The thing to keep in mind with investment strategy is that the goal is to make money easily, or find the best way to make money easily. Not to make the best or most interesting products or anything, really. This advice is the best advice when you take that into account.
> but people tend to be either slow movers or fast movers and that seems harder to change. Being a fast mover is a big thing; a somewhat trivial example is that I have almost never made money investing in founders who do not respond quickly to important emails.
I think I’m self-aware enough to recognize that I am probably a slow mover, and this is one of the most annoying aspects of my personality that I would like to change. I get hung up on small details, iterate too many times, and want things to be “perfect” before I publish or share them.
Has anyone successfully changed this aspect of themselves? Sam mentions that this personality trait seems to be mostly invariant over time, but surely there are some habits that one could develop that lead to an eventual change (if not in personality, then at least in behavior).
I think there are areas where slow movers have an advantage. For instance, an area where the cost of an iteration is high - a slow mover may have an advantage planning and executing the iteration.
But, if you want to get faster, one thing is to ask yourself - do I have enough information to make a decision; is it possible to get more information - almost always the answer is yes, but will the cost in money or time or other resources be worth the additional information for the decision - or do we discover just as much moving forward to discover if a decision is wrong. Another question is if a decision is wrong, can we recognize that outcome quickly and what is the cost to move to a different decision.
At the core, I was afraid to fail combine that with, as a technical person, I _really_ don't like to do things I don't like to do. But, things I don't like to do are absolutely at times necessary to do, i.e. answer a simple email from a customer; answer an angry email from an investor.
It took me about 5 years and some very large, public (to my circle) failures to realize that it is okay to fail. That I wasn't going to get better over night, over days or months - it would take me years.
I've incrementally improved and shed a lot of who I was. It was extremely hard and it's not for everyone - but if you are willing to try and take small steps, the payout is absolutely worth it.
I changed myself to handle this and then reverted. I'm trying to fix it again. I think the key thing is related to something else they say about effective founders: when faced with a hard problem they must solve, they run towards it.
Don't get trapped in the siren song of "it's okay to be slow". Speed is itself part of quality.
I know it's possible to change. The factors that cause me to slow are:
- Fear of trying too hard and seeing myself fail: Failure is inevitable. Earlier > Later.
- A misplaced confidence that I can knock it out late: You can't do this anymore.
- Uncertainty of the next action: Any action is better than no action 80% of the time. Just eat the other 20%
- Wanting to make things 'nice' (especially if I've already been slow): Present > Nice, and nice_delta(t) < nice_delta(t-1) so you'll be producing less nice per unit time as time goes on, so just release.
Hope this helps. I know it can be changed. I've done it. I have to do it again.
I've worked on this part of myself alot, and I think the core idea that changed it for me is clearly articulating the problem you're solving and not over identifying yourself with your work product.
If the problem you're solving is all the libraries/sw for x are shitty / half baked, then it makes sense to take things slow, think it out, and design something robust.
If the problem you're solving is trying to validate a business idea / market idea, it might make sense to hack something shitty together to test that hypothesis.
For me, the issue has always been that I _personally_ identify myself with my code being robust / well designed, and that makes it difficult for me to put something hacky out there, but if I focus on the objective - to validate or invalidate a potential idea - it makes it clear how to prioritize my time / energy.
when you invest in disruptive technologies, being patient and a slow mover is your friend. Many fast mover friends of mine don’t have the guts and patience to go through volatile phases of some assets, and I outperformed them (even the ones who spent 14 hours a day trading profitably)
At the same time I would never work at a startup at any position again, because looking at a TODO list of 50 items is stressful and boring at the same time.
(Ark invest is the closest to what assets that I like, they are looking 5-20 years ahead and not at quaterly results).
In my experience, a great founder should be good all three of these: 1) thinking fast, 2) thinking slow, and 3) knowing when to think fast or slow. It's easier to determine if someone isn't great at thinking fast (or doesn't know when they should think fast), for example if they don't respond quickly to an important email.
I don't think this is a binary thing. Moreover, I think the ability to meld the two and manage the balance of decisions across a growing number of stakeholders is one of the biggest challenges for founders.
Some comments in here seem to miss the point. Sam’s perspective here is from an investor’s pov. He’s not saying that everybody should build a unicorn. From a VC/Angel perspective it only makes sense to invest in those kinds of companies. So if you’re not that kind of company, you probably shouldn’t bother running after VC money. Instead, build a profitable business over which you have full control and can support you, your team and preferably make you financially independent.
Sam, or SV’s, way of thinking is not the only path to success.
Im not fond of VC startups, but that doesnt mean it’s a wrong endeavor. Most of the apps we use on a dAily basis exist thanks to that model.
> Most of the apps we use on a dAily basis exist thanks to that model.
Don't count me in that 'we'; an app coming from a VC funded company is a red flag for me not to use that app. Any app that I've used from that category I've later come to regret. The last one was duolingo, and I now realise I was suckered there too.
Sometimes it feels like a lot of the attempts to find themes and trends in terms of what makes startups successful are very much in hindsight. I'm not saying you can't tune your vision to some degree to identify strong startups, but it seems like a lot of the time people are looking at successful/strong founders and then identifying any of the traits they have as markers of success. I guess there is a pattern though? There's a reason successful VCs continue to succeed and aren't just one hit wonders..
The only pattern is "resourceful" founders and plenty of money. Saying there is science behind investing in early stage startups is like saying there is science in finding out successful humans.
It's all hogwash. Market size, MRR, ARR TAM, PAM, CAM, WHAM are all absolutely irrelevant and just straws that investors like to clutch to when they have no idea what to do. (Microsoft started writing basic programs with just few thousand basic programmers, facebook was hotornot app, google was a search app etc etc)
What really matters is how obstinate the founders are. And equally important is how much money they have.
It's much more predictable to invest in stocks even if they are the sum of human emotions.
my "tin foil hat conspiracy" is that all the talk in tech about startup investing just distracts everyone from real wealth creating opportunities that already exist in public markets that literally anyone can access.
seed investors/VCs/etc are incentivized to discount public equity opportunities because they're trying to prove their own value to their LPs
> I think the "help them" bit is good, too, and something a lot of VC's don't seem to be that good at.
I look forward to the day I meet a VC good at helping a company. I think, most of them are good at motivating founders by creating economics that displease the founder if they don't perform, but that's more of a stick than a carrot. I'd love to meet and hear about a VC truly focused on the carrot side of things.
> Finally, I’ve found that most of the time when founders call asking for vague help, what they are really asking for is emotional support from a friend. Invite them over to your house, make them tea or pour them a drink, and start listening to their struggles.
That's super true. In my experience, it's always difficult to see investors as peers sharing the struggle with you, but who more than them can do it?
> In my experience, it's always difficult to see investors as peers sharing the struggle with you, but who more than them can do it?
For any given startup, wouldn't the founders have much more at stake than does the VC? I'd expect the VC to have many concurrent investments, whereas the founders' whole life is wrapped up in that company.
I would think that owners of other businesses of similar size would be much more sympathetic.
> It seems that more people want to be investors than founders
This may or may not be true but it paints an innacurate picture. There's always a ton of highly talented people willing to be founders and start businesses. And there's always a ton of businesses with plenty of labor to start new projects. All you need to do is look at the insane number of brand new projects created on ProductHunt every single day. There's only enough consumer demand to satisfy a tiny percentage of those products created. This indicates a massive oversupply of highly talented labor.
The problem is opportunities. opportunities to build real value that people are willing to pay for, are sorely lacking. In short, everything that can be done (legally) has been done (the low hanging and mid hanging fruit). And, all that's left is the really really hard stuff.
Invest on a $20M SAFE Note in a 90 day old startup out of YCombinator, or write a check at a $30-35m pre-money valuation at a company doing $2-3m in revenue with 300% growth rate, metrics, referencable customers, the beginning's of a team....
As a fellow aspiring essayist and man of letters, please greet this comment with a bit of forgiveness for I assure you I have the utmost empathy for anyone tasked with writing an essay in the genre of "generalizable advice for startup founders and investors" or "observations on capitalism and the role of startups therein". But let my gripe also be recorded as follows. Why must we continually imbibe to the dogma of successful angel investors with such utter disregard for critical thinking? Upon first glance I noticed the recycling of the old trope the iPhone, which I've seen before in this essayist's prose. Steve Ballmer pointed out that it was the bundling of the iPhone with AT&T contracts that allowed it to expand, not some merry band of first generation iPhone lovers. I recall with equal love and loyalty my Creative Zen Mosaic mp3 player, circa 2009, which led to no such outcome for Creative, not for lack of my extreme love and admiration. And let it also be known that the essay commits no shortage of fallacies, most notably the straw man fallacy, in which we are led to believe that most investors think only about the current size of the market. Either we are supposed to believe that those in positions of wealth, power, and influence, have no concept of how markets might change in size over time, or might not have a concept of time altogether. Both equally unlikely. Instead, we tell ourselves smugly, that investors must all be robber baron caricatures like the oilmen of yore or the real estate tycoon who now inhabits the white house, completely unaware of the changing and dynamic nature of the world, and that we, though we may be poor, might be able to create fabulous wealth with this secret knowledge.
Anyone know anything about investing in podcasts? Like, suppose you find a fresh new one, where it has a lot of potential but just needs more practice/exposure/equipment. And you want to help them get there quicker by giving say $20,000 in hopes they hit it big and their show becomes very profitable down the road.
Perhaps investing in a twitch channel or youtuber is similar?
I just wonder if there's any help or guides to doing this or if it's ever been done.
Step one:
Be born into a upper middle class to uber wealthy family with connections to even more money & power (was in an incubator out of 10 of us 1 succeeded; sold his company for $350 million & his father was a VC)
Step two:
Try your hand many times with your ideas, each time hitting up your built in wealthy network (VCs) you were indirectly or directly born into
Step three:
Maybe you the rich get richer and you get to invest in startups or you give up and become a VC cause they are your people. If you become a VC or an angel you invest in rich kids because you want to make money; safer bets then investing in the poor kid.
Those who don't follow the above mold.. go ahead ...startup while working a full time job.. oops first, 2nd or 3rd didnt work.. damn now i have mouths to feed there go my startup dreams while richie richie is on his tenth living off other people's money. Now if your poor go ahead startup but you need to feed yourself.
Sam Altman has this weird style of writing with such an authoritative voice to sound convincing with very little substance to back up his claims (my other favorite one is the one about "life advice" when he turned 30 years old [1]). It would be perfectly fine to convey the same thoughts by just being a bit more humble and make it clear that these are just his (unfounded) opinions.
> I look for founders who are scrappy and formidable at the same time (a rarer combination than it sounds); mission-oriented, obsessed with their companies, relentless, and determined; extremely smart (necessary but certainly not sufficient); decisive, fast-moving, and willful; courageous, high-conviction, and willing to be misunderstood; strong communicators and infectious evangelists; and capable of becoming tough and ambitious.
> The spectral signatures of the best companies I’ve invested in are remarkably similar. They usually have most of the following characteristics: compelling founders, a mission that attracts talented people into the startup’s orbit, a product so good that people spontaneously tell their friends about it, a rapidly growing market, a network effect and low marginal costs, the ability to grow fast, and a product that is either fundamentally new or 10x better than existing options.
This reads like a bad Tinder profile. It becomes problematic when aspiring entrepreneurs (I certainly have been guilty of this when I was just starting out) start believing they should now optimize for a certain founder profile that a particular investor (especially a well-known one, like Sam Altman) is looking for. Other investors have other profiles, I know of one who supposedly only invests in GSB graduates, even though his investment track record has very little to do with GSB. When you believe this as a young founder, you'll work hard to fit that profile and will reach out to them when you think you've finally marked off all the check marks, only to find out that the investors will back track on their thesis and find another reason not to fund you. The truth is that most investor theses, no matter how well formulated, break down in the face of FOMO, and will not matter much when it comes to writing checks. The paradox of raising money is painfully obvious: investors will want to invest the most when you least need it, not when you meet some random investment thesis.
It's important to realize that Sam Altman is human too, and makes mistakes like anyone else:
> However, sometimes bad founders have good ideas too, and investing in them is the chronic investing mistake that has been hardest for me to correct. (My second biggest chronic mistake has been chasing investments primarily because other investors like them.)
I'm willing to bet that in reality, most of Sam's investments looked more like this rather than meeting the high standards he laid out. I just wished he would be more humble to admit this.
I call it the Hacker (News) Essay style and it's a persuasive essay style. Paul Graham writes in the same style. So I see its adoption as the result of the master-apprentice process. It is most effective with 20:20 hindsight because nobody can predict the future.
Fool me once. Fool me twice. Oh heck, fool me three times. But I'm not going to be fooled again. I've stopped investing in startups (so-called angel investing) when I realized that it's a fools' errand to invest in super early stage startups or in "convertible notes" or "pre-seed rounds" without any sort of informational or operational leverage. I'd rather invest in myself and other asset classes.
The accreditation rules really bother me. Excluding people based solely on wealth is silly. I think you should be able to take a test to prove you know enough to invest.
Eh. The U.S. education system has taught me that anyone* can beat any* test. Seems like there's value in saying "if you really fuck up, you are at least have a background that says this will not be your entire livelihood."
"The proposal would add additional means for individuals to qualify to participate in our private capital markets based on established, clear measures of financial sophistication."
‘ For example, although the iPhone was derided for not having many users in its first year or two, most people who had an iPhone raved about it in a way that they never did about previous smartphones.’
I was there, and that was only half-true, or not really true.
I recall statements like “I’ve never had such a feeling of relief as the moment when I threw it out of a moving car window.” And early adopters generally complaining with almost brain melting frustration at any number of UX boondoggles.
I think people knew somehow it was the future, and couldn’t stop talking about their iPhones, but a lot of the talk was negative.
Without hindsight bias there might be a deeper lesson to learn from the iPhone, that “users love it” isn’t the perfectly accurate wording to summarize adoption conditions.
I'm calling peak bubble in 2020, Softbank companies imploding all over the place... investors ratcheting up terms on later stage rounds, tons of IPOs at 40%+ below last valuation, and we're encouraging more people to invest.
Anybody doing angel investing should consider themselves a "patron of innovation", and assume zero returns.
[+] [-] m_ke|6 years ago|reply
This is the main reason why most people should avoid VC money. As a founder/employee all of your eggs are in one basket and the chance of having a billion dollar exit is practically 0. VCs get to raise billion dollar rounds, live off of the 2-3% management fees and go around spraying and praying with the hope of hitting a unicorn. If that doesn't work they take their top donkeys and try to pump and dump them, marking up their investments in the process in order to raise another round.
[+] [-] zby|6 years ago|reply
From Ben Thompson newsletter:
"""
where would $1 have been best invested on March 25, 2015, when Altman wrote his post?
* Unicorn basket: Uber ($41.2 billion -> $53 billion), Palantir ($15 billion -> ~$26 billion), Airbnb ($10.5 billion -> $35 billion), Dropbox ($10 billion -> $7.4 billion), Pinterest ($11 billion -> $10.4 billion), and SpaceX ($10.1 billion -> $33.3 billion) = +$67.2 billion and a CAGR of 11.6%.
* SAP 500: From $2061.05 to $3,234.85, for a CAGR of 9.87%
* Big Tech: Apple ($714.84 billion -> $1,321.6 billion), Microsoft ($338.6 billion -> $1,210.1 billion), Google ($386.1 billion -> $938.6 billion), Amazon ($172.5 billion -> $929.6 billion), Facebook ($230.9 billion -> $595.1 billion) = +$3,152.06 billion and a CAGR of 23.14%
"""
plus correction:
"""
However, I did err by not including dividend payouts, which are basically reassignments of market cap to individual investors. Interestingly, this results in an annualized S&P 500 return of 11.7%, which actually beats the unicorn basket annualized return of 11.6%! More on this in a moment.
"""
[+] [-] nradov|6 years ago|reply
[+] [-] unknown|6 years ago|reply
[deleted]
[+] [-] cryptica|6 years ago|reply
I'm optimistic about cryptocurrency because I believe that every generation will invent a new way to legally take or inflate away the wealth of the previous generation. If an earlier generation was able to manipulate governments to the point that they abandoned the gold standard for fiat, then the new generation can easily manipulate governments to abandon fiat for cryptocurrency.
There is nothing the elites can do about it, there are too few of them. Centralizing economic forces are making them richer but also shrinking their numbers.
[+] [-] dsalzman|6 years ago|reply
You should try to limit yourself to opportunities that could be $10 billion companies if they work (which means they have, at least, a fast-growing market and some sort of pricing power). The power law is that powerful. This is easy to say and hard to do, and I’ve been guilty of violating the principle many times. But the data are clear—the failures don’t matter much, the small successes don’t matter much, and the giant returns are where everything happens.”
This is just one type of company and limiting yourself to just that is limiting and a driver to some of the mind bubble issues in SV.
[+] [-] Traster|6 years ago|reply
[+] [-] aaavl2821|6 years ago|reply
Cash on cash returns from seed investing in the biggest biotech companies are an order of magnitude lower than tech. Series a investments in the biggest biotech startups are about half that of tech. This is despite the fact that the companies grow to comparable sizes on comparable amounts of capital [0]
Value inflection happens later in biotech than software. Software startups can get product market fit on seed capital, but the biggest value inflection in biotech is human proof of concept, which costs tens or hundreds of millions
If you invest in biopharma you should focus on lower loss rates (ie do good technical diligence) and concentrate bets in winning companies
[0] https://www.baybridgebio.com/blog/anatomy_of_a_decacorn.html
[+] [-] freepor|6 years ago|reply
[+] [-] awb|6 years ago|reply
I think the idea is that since such a high percentage of startups fail or provide low returns you need to find these huge wins to make money in the long run.
And finding one huge win every ~5 years might be easier than finding a bunch of smaller wins every year.
[+] [-] dannylandau|6 years ago|reply
Moreover, the probability of find a $10B+ exit happens only about 5 times per decade (10 years), so the chance that you got into one is very unlikely.
[+] [-] patothon|6 years ago|reply
[+] [-] 86J8oyZv|6 years ago|reply
The thing to keep in mind with investment strategy is that the goal is to make money easily, or find the best way to make money easily. Not to make the best or most interesting products or anything, really. This advice is the best advice when you take that into account.
[+] [-] throwaway713|6 years ago|reply
I think I’m self-aware enough to recognize that I am probably a slow mover, and this is one of the most annoying aspects of my personality that I would like to change. I get hung up on small details, iterate too many times, and want things to be “perfect” before I publish or share them.
Has anyone successfully changed this aspect of themselves? Sam mentions that this personality trait seems to be mostly invariant over time, but surely there are some habits that one could develop that lead to an eventual change (if not in personality, then at least in behavior).
[+] [-] dv_dt|6 years ago|reply
But, if you want to get faster, one thing is to ask yourself - do I have enough information to make a decision; is it possible to get more information - almost always the answer is yes, but will the cost in money or time or other resources be worth the additional information for the decision - or do we discover just as much moving forward to discover if a decision is wrong. Another question is if a decision is wrong, can we recognize that outcome quickly and what is the cost to move to a different decision.
[+] [-] irjustin|6 years ago|reply
At the core, I was afraid to fail combine that with, as a technical person, I _really_ don't like to do things I don't like to do. But, things I don't like to do are absolutely at times necessary to do, i.e. answer a simple email from a customer; answer an angry email from an investor.
It took me about 5 years and some very large, public (to my circle) failures to realize that it is okay to fail. That I wasn't going to get better over night, over days or months - it would take me years.
I've incrementally improved and shed a lot of who I was. It was extremely hard and it's not for everyone - but if you are willing to try and take small steps, the payout is absolutely worth it.
[+] [-] scarejunba|6 years ago|reply
Don't get trapped in the siren song of "it's okay to be slow". Speed is itself part of quality.
I know it's possible to change. The factors that cause me to slow are:
- Fear of trying too hard and seeing myself fail: Failure is inevitable. Earlier > Later.
- A misplaced confidence that I can knock it out late: You can't do this anymore.
- Uncertainty of the next action: Any action is better than no action 80% of the time. Just eat the other 20%
- Wanting to make things 'nice' (especially if I've already been slow): Present > Nice, and nice_delta(t) < nice_delta(t-1) so you'll be producing less nice per unit time as time goes on, so just release.
Hope this helps. I know it can be changed. I've done it. I have to do it again.
[+] [-] billylindeman|6 years ago|reply
If the problem you're solving is all the libraries/sw for x are shitty / half baked, then it makes sense to take things slow, think it out, and design something robust.
If the problem you're solving is trying to validate a business idea / market idea, it might make sense to hack something shitty together to test that hypothesis.
For me, the issue has always been that I _personally_ identify myself with my code being robust / well designed, and that makes it difficult for me to put something hacky out there, but if I focus on the objective - to validate or invalidate a potential idea - it makes it clear how to prioritize my time / energy.
[+] [-] xiphias2|6 years ago|reply
when you invest in disruptive technologies, being patient and a slow mover is your friend. Many fast mover friends of mine don’t have the guts and patience to go through volatile phases of some assets, and I outperformed them (even the ones who spent 14 hours a day trading profitably)
At the same time I would never work at a startup at any position again, because looking at a TODO list of 50 items is stressful and boring at the same time.
(Ark invest is the closest to what assets that I like, they are looking 5-20 years ahead and not at quaterly results).
[+] [-] jlaurend|6 years ago|reply
I don't think this is a binary thing. Moreover, I think the ability to meld the two and manage the balance of decisions across a growing number of stakeholders is one of the biggest challenges for founders.
[+] [-] pedalpete|6 years ago|reply
We unfortunately are unbalanced, and therefore move slower than I'd like (though everything always takes longer anyway).
I'm sure there are benefits to balancing out the two personalities if you can work well together.
I'm somewhat lucky that we are in a technically challenging space and the market will develop over a few years, but still, it's painful.
[+] [-] krm01|6 years ago|reply
Sam, or SV’s, way of thinking is not the only path to success.
Im not fond of VC startups, but that doesnt mean it’s a wrong endeavor. Most of the apps we use on a dAily basis exist thanks to that model.
[+] [-] rexreed|6 years ago|reply
[+] [-] oska|6 years ago|reply
Don't count me in that 'we'; an app coming from a VC funded company is a red flag for me not to use that app. Any app that I've used from that category I've later come to regret. The last one was duolingo, and I now realise I was suckered there too.
[+] [-] xwowsersx|6 years ago|reply
[+] [-] ganeshkrishnan|6 years ago|reply
What really matters is how obstinate the founders are. And equally important is how much money they have.
It's much more predictable to invest in stocks even if they are the sum of human emotions.
[+] [-] unknown|6 years ago|reply
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[+] [-] tempsy|6 years ago|reply
seed investors/VCs/etc are incentivized to discount public equity opportunities because they're trying to prove their own value to their LPs
[+] [-] davidw|6 years ago|reply
I want to say something snarky about bombarding a company with electrons to ionize it, but it's actually a pretty good metaphor.
I think the "help them" bit is good, too, and something a lot of VC's don't seem to be that good at.
[+] [-] verelo|6 years ago|reply
I look forward to the day I meet a VC good at helping a company. I think, most of them are good at motivating founders by creating economics that displease the founder if they don't perform, but that's more of a stick than a carrot. I'd love to meet and hear about a VC truly focused on the carrot side of things.
[+] [-] giansegato|6 years ago|reply
That's super true. In my experience, it's always difficult to see investors as peers sharing the struggle with you, but who more than them can do it?
[+] [-] DoofusOfDeath|6 years ago|reply
For any given startup, wouldn't the founders have much more at stake than does the VC? I'd expect the VC to have many concurrent investments, whereas the founders' whole life is wrapped up in that company.
I would think that owners of other businesses of similar size would be much more sympathetic.
[+] [-] thorwasdfasdf|6 years ago|reply
This may or may not be true but it paints an innacurate picture. There's always a ton of highly talented people willing to be founders and start businesses. And there's always a ton of businesses with plenty of labor to start new projects. All you need to do is look at the insane number of brand new projects created on ProductHunt every single day. There's only enough consumer demand to satisfy a tiny percentage of those products created. This indicates a massive oversupply of highly talented labor.
The problem is opportunities. opportunities to build real value that people are willing to pay for, are sorely lacking. In short, everything that can be done (legally) has been done (the low hanging and mid hanging fruit). And, all that's left is the really really hard stuff.
[+] [-] mrnobody_67|6 years ago|reply
Invest on a $20M SAFE Note in a 90 day old startup out of YCombinator, or write a check at a $30-35m pre-money valuation at a company doing $2-3m in revenue with 300% growth rate, metrics, referencable customers, the beginning's of a team....
[+] [-] sharker8|6 years ago|reply
[+] [-] xs|6 years ago|reply
Perhaps investing in a twitch channel or youtuber is similar?
I just wonder if there's any help or guides to doing this or if it's ever been done.
[+] [-] paul7986|6 years ago|reply
Step two: Try your hand many times with your ideas, each time hitting up your built in wealthy network (VCs) you were indirectly or directly born into
Step three: Maybe you the rich get richer and you get to invest in startups or you give up and become a VC cause they are your people. If you become a VC or an angel you invest in rich kids because you want to make money; safer bets then investing in the poor kid.
Those who don't follow the above mold.. go ahead ...startup while working a full time job.. oops first, 2nd or 3rd didnt work.. damn now i have mouths to feed there go my startup dreams while richie richie is on his tenth living off other people's money. Now if your poor go ahead startup but you need to feed yourself.
[+] [-] vincentmarle|6 years ago|reply
> I look for founders who are scrappy and formidable at the same time (a rarer combination than it sounds); mission-oriented, obsessed with their companies, relentless, and determined; extremely smart (necessary but certainly not sufficient); decisive, fast-moving, and willful; courageous, high-conviction, and willing to be misunderstood; strong communicators and infectious evangelists; and capable of becoming tough and ambitious.
> The spectral signatures of the best companies I’ve invested in are remarkably similar. They usually have most of the following characteristics: compelling founders, a mission that attracts talented people into the startup’s orbit, a product so good that people spontaneously tell their friends about it, a rapidly growing market, a network effect and low marginal costs, the ability to grow fast, and a product that is either fundamentally new or 10x better than existing options.
This reads like a bad Tinder profile. It becomes problematic when aspiring entrepreneurs (I certainly have been guilty of this when I was just starting out) start believing they should now optimize for a certain founder profile that a particular investor (especially a well-known one, like Sam Altman) is looking for. Other investors have other profiles, I know of one who supposedly only invests in GSB graduates, even though his investment track record has very little to do with GSB. When you believe this as a young founder, you'll work hard to fit that profile and will reach out to them when you think you've finally marked off all the check marks, only to find out that the investors will back track on their thesis and find another reason not to fund you. The truth is that most investor theses, no matter how well formulated, break down in the face of FOMO, and will not matter much when it comes to writing checks. The paradox of raising money is painfully obvious: investors will want to invest the most when you least need it, not when you meet some random investment thesis.
It's important to realize that Sam Altman is human too, and makes mistakes like anyone else:
> However, sometimes bad founders have good ideas too, and investing in them is the chronic investing mistake that has been hardest for me to correct. (My second biggest chronic mistake has been chasing investments primarily because other investors like them.)
I'm willing to bet that in reality, most of Sam's investments looked more like this rather than meeting the high standards he laid out. I just wished he would be more humble to admit this.
[1] https://blog.samaltman.com/the-days-are-long-but-the-decades...
[+] [-] sjg007|6 years ago|reply
[+] [-] unknown|6 years ago|reply
[deleted]
[+] [-] rexreed|6 years ago|reply
[+] [-] xfactor973|6 years ago|reply
[+] [-] ketzo|6 years ago|reply
*almost.
[+] [-] steveklabnik|6 years ago|reply
"The proposal would add additional means for individuals to qualify to participate in our private capital markets based on established, clear measures of financial sophistication."
[+] [-] edoceo|6 years ago|reply
[+] [-] whiddershins|6 years ago|reply
I was there, and that was only half-true, or not really true.
I recall statements like “I’ve never had such a feeling of relief as the moment when I threw it out of a moving car window.” And early adopters generally complaining with almost brain melting frustration at any number of UX boondoggles.
I think people knew somehow it was the future, and couldn’t stop talking about their iPhones, but a lot of the talk was negative.
Without hindsight bias there might be a deeper lesson to learn from the iPhone, that “users love it” isn’t the perfectly accurate wording to summarize adoption conditions.
[+] [-] xenocyon|6 years ago|reply
My nightmare is a boss who expects synchronous responses to emails.
[+] [-] mrnobody_67|6 years ago|reply
I'm calling peak bubble in 2020, Softbank companies imploding all over the place... investors ratcheting up terms on later stage rounds, tons of IPOs at 40%+ below last valuation, and we're encouraging more people to invest.
Anybody doing angel investing should consider themselves a "patron of innovation", and assume zero returns.
[+] [-] Rerarom|6 years ago|reply