Podcast Notes Playlist: Startup

• On space exploration:
  • “I think it’s a thing that people need to do because they want to do it as opposed to there being a sound business argument for it”
• We’re currently living through the worst-case scenario of how social media might play out
• Good storytellers are capable of developing a sense of empathy and putting themselves in the shoes of the reader
• “Dystopia is an interesting idea because a lot of times, what science fiction writers are really doing is writing a kind of metaphorical story about the present. I think that we’re in a dystopia now in a lot of ways. A lot of things have gotten better, but what’s happening politically right now, what’s happening socially, is definitely trending in a dystopian way. That’s what we should be concerned about right now.”

If you want to speculate on the development of tech, no one has a better brain to pick than Neal Stephenson. Across more than a dozen books, he’s created vast story worlds driven by futuristic technologies that have both prophesied and even provoked real-world progress in crypto, social networks, and the creation of the web itself. Though Stephenson insists he’s more often wrong than right, his technical sharpness has even led to a half-joking suggestion that he might be Satoshi Nakamoto, the shadowy creator of bitcoin. His latest novel, Fall; or, Dodge in Hell, involves a more literal sort of brain-picking, exploring what might happen when digitized brains can find a second existence in a virtual afterlife.

So what’s the implicit theology of a simulated world? Might we be living in one, and does it even matter? Stephenson joins Tyler to discuss the book and more, including the future of physical surveillance, how clothing will evolve, the kind of freedom you could expect on a Mars colony, whether today’s media fragmentation is trending us towards dystopia, why the Apollo moon landings were communism’s greatest triumph, whether we’re in a permanent secular innovation starvation, Leibniz as a philosopher, Dickens and Heinlein as writers, and what storytelling has to do with giving good driving directions.

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Erik Torenberg is a general partner at Village Global, a founder of OnDeck, the host of Venture Stories podcast and just an overall swell guy. 

In this episode, we talk about building career moats, building positive loops, finding asymmetric career bets, using twitter to your advantage, and a whole lot more.

It was a real joy to have Erik on the show. I loved this conversation and think you will too. 

I highly recommend following Erik on twitter at:  https://twitter.com/eriktorenberg 

And check out his excellent podcast Venture Stories:  https://www.villageglobal.vc/podcast/ 

• Picture an X-Y graph
  • Y axis = the value to the customer, X axis = the penetration into the market
  • If the trend is up and to the right, you have a network effect business
• To get a marketplace or a user-generated content business off the ground, you need to do things that are unsclabale
• “If you’re in an advertising-orientated world, you should not try to monetize until you’re north of 10 million users”
• The internet allows perfect information to be available about an individual with an certain skill set and connects them with someone with a need for that skill set 
  • While we’ve done it with cars (Uber/Lyft) and homes (Airbnb), there are other areas waiting to be taken advantage of:
    • Medical expertise
    • What if you want help with your car?
    • Connecting tutors and students
• The features of a healthy marketplace:
  • A high fragmentation of supply
  • Certain businesses are prone to monogamy (like babysitters, hair stylists) – these are tougher for marketplaces
  • The user experience has to be multiples better than the status quo
• In the age of the internet, it’s easy to know more about a particular subject matter than anyone else
  • Just keep narrowing the scope of that subject until you’re the one that knows the most

My guest this week is Bill Gurley, a general partner at Benchmark Capital and one my favorite investment thinkers. As you’ll hear, despite enormous success through his career, Bill is clearly still in love with business and investing. Where many might discuss past glories, I’ve been incredibly impressed with how both Bill and his partners emphasize the current portfolio and market landscape. I’m thankful to have had the chance to speak with him in this format. I hope you enjoy our conversation.

For more episodes go to InvestorFieldGuide.com/podcast.

Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.

Follow Patrick on Twitter at @patrick_oshag

Show Notes

1:13 - (First Question) – The idea of increasing returns

            1:21 – Competiting Technologies, Increasing Returns, and Lock-in By Historical Events

            2:07 – Complex Systems Theory – Santa Fe Institute

4:35 – Markers that could be a sign of network effect in a company

6:27 – The opportunities for companies to capture network effect

8:46 – Are there certain teams/leaders that are more conducive to leading a network effect company

11:55 – Liquidity quality

13:35 – How important is the revenue model at the beginning

15:59 – Fascination with Nextdoor

            17:56 – Paradox of Choice

18:39 – Finding opportunities

20:17 – Potential marketplaces and assets that could be commoditized

            20:20 – All Markets Are Not Created Equal: 10 Factors To Consider When Evaluating Digital Marketplaces

21:39 – Usage yield on the world’s assets

23:50 – Has technology changed the world of value investing

26:28 – Hyper niche marketplaces

27:52 – Challenges of labor marketplaces

30:12 – User generated content businesses

32:44 – People who are capable of building UGC businesses

33:16 – His interest in Discord

34:31 – Factors of a healthy marketplace

37:57 – Fools’ gold in marketplace businesses

39:04 – How influx of cash is impacting the marketplace business landscape

            40:43 – All Revenue is Not Created Equal: The Keys to the 10X Revenue Club

43:20 – How does the influx of money into the space impact him

46:44 – Spending money to attack top brands

50:32 – Regulatory capture

53:36 – His thoughts on the IPO market

57:49 – How did he realize this was his passion

1:00:42 – Qualifying his passion

1:01:52 – Favorite thing about working with entrepreneurs

102:48 – Honing your craft

1:04:33 – Making yourself a good mentor

1:05:56 – Kindest thing anyone has done for him

Learn More

For more episodes go to InvestorFieldGuide.com/podcast. 

Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub

Follow Patrick on twitter at @patrick_oshag