Having a Conversation With Yourself: 2024

Revisiting Your Own Ideas

Dec 28, 2024

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In December 2021, I was reflecting on an idea I had heard from several sources. In effect, this is the idea: We're always living in historic times, so take notes. Another great perspective on this idea comes from a fellow named Wilford Woodruff, who I consider to have been a modern-day Moses. He said:

“While walking in a rapid stream we cannot tread twice in the same water. Neither can we spend twice the same time. When we pass out of that door, the work of this [moment] will be closed to us forever. We shall never spend the time of this evening again. Then should we not keep a record of our work, teachings, and counsel that we give? We should."

Believing that writing is important was enough to make me feel bad about not doing it more. But it was another quote that finally convinced me not to just feel bad, but to start writing. It's a quote from Flannery O'Connor that I've referenced over and over again:

"I write because I don't know what I think until I read what I say."

That put me over the edge. I needed to write not because the output was important, but because the process was important. My friend Rex Woodbury's own experience writing solidified that idea for me. Starting in the new year of 2022, I set one specific goal in regards to my writing: don't miss a week. No matter how good or bad, long or short, relevant or nonsense my writing was I just couldn't miss a week.

Well, here I am on my 156th week of writing without missing a week. Through sickness, holidays, a move to another state, two babies born, new businesses launched, and a few dozen new investments I've written what I estimate at 397,570 words over the last three years. The average book is ~100K words so I've written almost four books in three years.

Looking at the dearth of work I've done satisfies the guilt ol' Wilford brings out in me over not writing. I am most certainly writing. But to satisfy Flannery, that requires another exercise. It's not enough that I write, I have to take it a step further and evaluate what I'm thinking.

Each year for my last post of the year I do a post I've called Having a Conversation With Myself. I did it in 2022 and 2023. In it, I looked back at the bulk of my writing for the year and extracted common themes that I found myself revisiting over and over again. Some of them, unsurprisingly, have been repeats from year to year.

The biggest one that has, I think, been the only one present in every year of my writing is storytelling. In 2022, it was "Storytelling can rewrite reality; for better or worse." In 2023, it was "I used to believe reality would triumph over narrative; now I'm not so sure." This year, I've finally given in and referred to as "Storytelling Is King."

Here are the rest of the conversation topics that came up over and over again:

Talking To Myself

Storytelling Is King
Science Fiction As Roadmap
Nuance Is Everywhere
I Write For Me, NOT You
Your Fund Size Is Your Strategy
Think In Decades
Venture Psychology
The Moral Case For Ambition
Beware The Profit Motive
Internalizing Negative Externalities

Below I included some excerpts from my writing that best represent these ideas I kept revolving around. Enjoy! And happy new year.

Storytelling Is King

What's interesting about large, complex organizations is that their marketing rarely even attempts to reflect the size and complexity of the thing. There's no incentive for complex organizations to make themselves easier to understand. The only incentive is to make the story attractive. So the marketing sticks to the narrative of humble beginnings, and only goes as far as "we're just getting started." (The Puritans of Venture Capital)

"I've written so often about storytelling, not just because I love a good story, but because stories represent our reality. Our stories are what we think about. And what we think about defines who we are." (Crafting Your Average)

"So you're trying to discover reality! The things that are real, and will stay real for 10 years. So what impact do hype cycles have? They distort reality. Huge amounts of unsustainable funding tumble in, which distorts the reality of whether or not the business is really what it claims to be, or if it is primarily a VC subsidy program; selling $2 for $1. That’s the danger of investing where everyone else is paying attention." (Crafting Your Average)

"I think most books have elements of two core activities: (1) storytelling, and (2) reality-telling. And no, those don't map 1:1 across fiction vs. non-fiction. There are plenty of fiction books that will teach you more about reality than just about anything beyond lived experience. Meanwhile, arguably the majority of non-fiction is about as far removed from reality as The Time Bandits." (Books 2.0)

"The reality is I could make a bull argument, or a bear argument for just about any company at any stage. Most VCs could. It's not a question of what is true or not, it's what are you willing to believe?" (The Trough of Feedback)

"I've often said this phrase, "there's a little truth in every JK." Something true is usually that special ingredient that makes a joke funny. The same is true with jokes on April Fool's Day. The same is true in the fantasies we weave. Finding the kernel of truth is what makes them special. One of our responsibilities in The Glass-Half War is to tell stories that people WANT to believe in. I want to believe in new media, new tech taking on the mantle from the visions of old, new strategies for allocating capital and creating wealth. I want new stories!" (The Glass Half War)

"I think the most important takeaway from this framework is that when you look at both the highest part of the peak of expectations, and the lowest point of the trough of disillusionment; neither of them are at the level of the plateau of productivity. Neither the highest highs, nor the lowest lows represent the reality of eventual outcomes." (Hype Deflation & Inflation)

"Hype is a physical force that deserves a place on the periodic table. The global social and economic impacts hype can have are just as powerful as oxygen or hydrogen. But just as the elements are natural forces that we can bend to our will, hype is something we all ought to have a better grasp on." (Hype Deflation & Inflation)

"The idea that truth is relative is very Nietzschean; that "truths" are often fabrications, or "illusions about which one has forgotten that they are illusions." Another way its been put, history is written by the victor. But what these ideas are really describing are stories, not truth. I've written over and over about storytelling, and the power that it has to "shape" reality. And that's because reality is a lived experience; reality is truth distorted through the lens of experience. You can tell a story long enough and well enough that it becomes reality, or in other words, shape what people believe about the world. And that's true. But the greatest story in the world doesn't change facts." (Oh Say, What Is Truth?)

"Noah Smith makes the point that Maher seems to have to have two ideas about what “truth” is, and failing to engage with those ideas leaves her “thinking at the topic rather than about the topic.” Those two ideas are “subjective truth” and “objective truth.” Subjective truth is becoming more and more important to people." (Oh Say, What Is Truth?)

Notice that this is not a conversation about falsifiable facts. Believing that good always triumphs over evil is demonstrably not true. Many, many instances throughout history have proven that evil can dominate, and continue to dominate. Both in individual examples and macro outcomes. But believing in the ability of good to win out in the end is a worthwhile pursuit. (Oh Say, What Is Truth?)

"This is true not just of group membership, but in general. Beliefs should be leading indicators of actions, instead of lagging indicators. You should buy the stock because you believe the story, not believe the story because you bought the stock. We should spend more time finding and understanding stories that we want to believe, and then acting on those beliefs." (Regret Porn)

"That's the reality of storytelling. The stronger a group of people believe something, and the bigger that group of people is, the more likely that thing is going to start getting reflected in reality. Just one necessarily reality of an inefficient market that is largely dictated by human emotions, whether founder or VC." (The Groucho Marx Mandate)

""What do you have to believe?" From my first day as an investor. Evaluating my very first investment. That was the question that started my investing journey. "What do you believe?" When I started writing consistently, I summed up my intentions for this blog as "a weekly newsletter about the art and science of building and investing in tech companies." The reality is I've spent an exorbitant amount of time thinking about storytelling and beliefs." (Cultivating Cults)

"This piece is a collection of reflections I've had over the last several years across a myriad of concepts. Stories shape reality. Storytelling is an art. Every story has its most effective evangelists. And often, the very best stories grow into cults. Whether you like it or not... every company, every movement, every religion, every sports franchise, every pop star, every coffee shop is a cult. I'll unpack why thats the case, why its not such a bad thing, and why it can actually be the most instructive way of building any story." (Cultivating Cults)

"You can see that sometimes these tools amplify good stories and sometimes they amplify bad stories. They're just tools. Every company, every organization, every movement, every individual represents a story. As Muriel Rukeyser said: "The universe is made of stories, not of atoms." There's a whole other conversation to have about what stories are worth telling, and which stories are worth believing in. In the meantime, I'd point you to the piece "Choose Good Quests" by Trae Stephens and Markie Wagner." (Cultivating Cults)

"Two sides of the same narrative coin: the breadth of the story and the breadth of how believed it is. Unbelievable progress is made through the consistent back and forth of two steps: big promises and big payoffs. Imagine yourself taking massive steps. You make a big promise. That's one step. You manage to pull off a big payoff. That's another step. Promise and payoff. Promise and payoff. But too often, people become obsessed with just one step: the promise. They end up spreading themselves wider and wider, all on one leg." (Loudest or Proudest)

"The very best entrepreneurs, from Thomas Edison to Walt Disney, Bill Gates, Elon Musk—they all built their empires around big promises. And big promises are critical. If you never make big promises, very few people will care about what you're doing. In some instances, that might be fine. But if you're dependent on talent, capital, partners, or anyone else who needs to believe in something to commit to it, then at one point or another you have to start telling a story. A story worth believing in." (Loudest or Proudest)

"And that's a key takeaway about the balance between promises and payoffs. Even the greatest storyteller in the world will eventually be called upon to deliver payoffs. Otherwise, that's when you slide down the slippery slope to charlatan, cuckoo, or just plain wrong." (Loudest or Proudest)

"And I think, despite the flood of information we're exposed to every day, we would be better suited if we took the time index our beliefs. Whether its the beliefs that determine how we live our lives, the religions we subscribe to, the investments we make, the companies we build, or the relationships we prioritize. Beliefs are made better through scrutinization." (My Cup Runneth Over)

"We need better storytellers. You need to get better at finding stories that are worth telling. Worth believing in. Whether its the company you want to build, or work for, or invest in, or even compete with. Everyone needs a good villain. Companies like Anduril exist not just because of the company they want to build, but specifically because they want to take on existing defense primes." (What Wicked Taught Me About B2B Sales)

"As I am so wont to do, I've turned to movies to unpack my perspective on how to think about military might, conflict, and deterrence. And I'm in good company with people like Palmer Luckey using movies like Avatar to unpack similar concepts. In a wave of defense tech investments and American Dynamism, it's more important than ever that people shape their perspectives on what they are or aren't okay with believing." (The Superhero Theory of Defense)

Science Fiction As Roadmap

Andy makes a key point about the world of information transference today that is, interestingly, addressed in a bunch of science fiction: "In learning sciences, we call this model “transmissionism.” It’s the notion that knowledge can be directly transmitted from teacher to student, like transcribing text from one page onto another." There's so much more I could dig into about how the future portrays information sharing. But this idea of "transmissionism" immediately reminded me of the Matrix where Neo "uploads" Kung Fu." (Books 2.0)

"You'll notice that Chrisman's refrain to build the future came, not from watching sci-fi, but from reading sci-fi. That is, in large part, because, while books can be nuanced and explore a variety of interesting topics, movies have become hits-driven engines that benefit more from pessimism than optimism." (Life Imitates Art)

"The same is true of the sci-fi we need more of. We need more people who take a simple idea, and take it seriously. What are the core ideas that define our human experience in the future? What would that idea look like as it evolves? Don't get lost in the existential everything. Stay focused on the human element of something." (Life Imitates Art)

"The first piece of the cycle is letting people dream. In an ideal world, the market should be setup to make people's dreams a reality. That should be true, whether its creating a better Cheeseburger, or curing cancer. I've written several times about historical futurism, accelerationism, and inventing the future. Many of the elements of dreaming the future, and building an optimistic, utopian version of science fiction, they're rooted in value imagination." (The Value Cycle)

"Artificial intelligence has been a dream since at least the 1950s, if not earlier. Dreaming of robots and automation and flying cars; there has always been a fertile landscape for imagining the value that could come from AI. On the other side of the coin, we have just as many (if not more) dystopian nightmares, from Frankenstein's Monster to HAL 9000 or The Terminator. But when we do what we did with Ford's "faster horse," the "dream-to-be-dreamed" is the idea of doing more with less. Automation alleviates much of the limitations we have in life, from less work to faster outcomes. There's plenty of good and bad executions of that dream, but the ability to do more with less is what most people are striving for." (The Value Cycle)

"So where is the Solution Sci-Fi? Climate change is a huge problem. Imagine the solution. Death before your time is a villainous tide that could be stemmed. Imagine the solution. Resources are finite and need replenishing. Imagine the solution." (Science Fiction's Dueling Fates)

"Where's the fiction that is taking practical reality and using that to solve actual problems? "We can't solve XYZ problem because we don't have the money." Can't we at least start by dreaming the solution? And granted, we've been inspired by plenty of science fiction. But not always the best versions of it." (Science Fiction's Dueling Fates)

"Andy Weir's The Martian is considered one of the most scientifically accurate sci-fi movies. That's a fun detail on its own. Its particularly interesting as we get closer and closer to the possibility of manned missions to mars. But what about the problems facing us right now? Where are the scientifically accurate treatments of tackling aging, disease, poverty, food shortages, energy dependence, climate change, or war?" (Science Fiction's Dueling Fates)

"I love science fiction. I have always been a highly committed daydreamer. In fact, I think daydreaming was a key input that made me initially want to go into filmmaking. I could see the stories in my mind and I wanted to make them a reality. But technology represents the next logical step. First you dream the story, then you tell the story, then you live the story." (Back To The Future)

"Palmer starts by talking about the not exactly common idea of creating synthetic long chain hydrocarbon fuel that he had been learning about for a while: If I want to understand what's going on in the modern day, you want to go back to the future and say, what were people saying, back then, what are the ideas that people aren't even discussing right now? Because I don't want to be too pessimistic on present, but if you look through a lot of the academic literature and government literature today on energy solutions for the United States, they're really, really narrow minded." (Back To The Future)

"As Palmer explains: The risk of going with a strongly iterative approach in areas that you maybe don't understand, and you might even think you do, but let's say you truly don't is that there might be much better approaches that you should have started iterating on. Or that you should have examined before you committed to one particular path. It's really about going back to the future. I love to go and see what everyone else who solved this problem thinks about it, not in the recent times." (Back To The Future)

"After getting this recommendation, I consumed the first 4 seasons of For All Mankind in about 1.5 weeks (granted it was right after our baby was born, so I had a lot of sitting around time.) And the show is a perfect example of "What If" storytelling. "What if the Russians beat us to the moon in the 60s?" From there, everything is a trickle effect. The space race never stops, we colonize the moon, we unlock nuclear power, we get to Mars. Electric cars are common in the 80s. The oil and gas industry is demolished. On and on. That show is an exceptional example of what I've written about before as Solution Science Fiction. People ask the question of why we should explore space when we have problems at home, but the show demonstrates the solutions. The more we're tackling the scientific frontier, the more technological progress we make." (What Wicked Taught Me About B2B Sales)

"I never resonate as much with the other-worldly sci-fi "in a galaxy far, far away." I want sci-fi that has one foot anchored in our reality. Even if its thousands of years in the future, things like the Foundation series or The Expanse or Red Rising. But also, I think more people could use the "What if" paradigm right now to write near-future science fiction about solving climate change, colonizing the galaxy, curing cancer, or any other technical challenge that, today, feels like a hopeful dream at best, far from reality." (What Wicked Taught Me About B2B Sales)

Nuance Is Everywhere

"Ambition is rare. Increasingly, society has started to kick against this kind of thinking. Even saying ambition is worth having feels demeaning. But the reality is this is yet another example of people's inability to accept and process nuance. It's possible that both can be true. You should give healthy space for your mental health and family life and hobbies. But you can also be incredibly ambitious, driven, and hard-working." (The Non-Zero Sum Game of Ambition)

"So the reality of the opportunity in manufacturing may be a fraught narrative, when in fact there is still obvious sizable opportunity. Companies like SpaceX and Anduril awoke something in the VC community; you can, in fact, do really well if you make hardware really well." (Deep Tech For Deep Minds? Or Deep Pockets?)

"So it's true. In the pursuit of optimism, there is a fine line between an optimistic story and a flat-out lie. If Baby Einstein's is making factually inaccurate claims that have been disproven? Then yeah, they should stop. But for a startup that has a dream of helping children learn math earlier in their life, and is in active pursuit of that goal, that's not lying. That's dreaming. And, as far as I can tell, that's not a bad dream! Math is good, actually." (The Glass Half War)

"The thing we're getting increasingly bad at is (1) determining the facts, and (2) accepting the facts. People's inability to gather information in making a decision is, in large part, the result of an onslaught of what feels like too much information. But instead of getting better at research, we've started looking for shorthands to making decisions. Most of those shorthands come in the form of allowing in-groups to step in as proxies, and make decisions for us. And that reliance on in-groups has made us worse at accepting facts." (Oh Say, What Is Truth?)

"The perverse incentives of venture capital that I've written about over, and over, and over again have made us all more susceptible to hype and hucksters. Our inability to accept nuance; to accept that large, sustainable businesses are incredibly difficult to build, has led us down the path of least resistance. What is hot reigns over what is right." (Oh Say, What Is Truth?)

"Almost nobody knows what they think, or why." If there was one crux of what I'm trying to say today, it's this. This is the problem. There are merits to both open and closed AI, and we should have that debate out. We should build and fund companies that act as proxies in that battle, demonstrating the quality of their work and arguments. But the biggest problem is that people aren't just studying this stuff out in their minds, forming a world view, defining their beliefs, and then engaging in earnest debate for the highest quality ideas. The debate is riddled with financial and professional incentives left and right. And what's worse, a lot of the discourse plays out on Twitter where people may not even connect the dots of the incentives behind the argument." (The Tail That Wags The Dog)

"As most of my favorite topics are, its importantly nuanced. I'm a firm believer in working hard. But I recognize the hollowness so many people feel about the working world. And its important for people to build a better relationship with their work, sense of satisfaction, and force ranked prioritizations that dictate what type of work you're going to do." (The Hardening of The Great Softening)

"Some might reflect and say, "well, his trauma inspired one of the greatest storytellers of all time." But that's not good, right? Would we rather rob the world of Disney's empire if it meant he could have had a loving father? Would we erase Michael Jackson's discography if it meant he was raised by parents who loved and encouraged him? The answer should be yes! The fear is that many people would say no. To many, it's more important that the individual contributes to the whole than it is the individual is taken care of, despite the consequences for the whole." (The Hardening of The Great Softening)

"Unfortunately, I think that means that Josh is likely the kind of person who would say that Walt Disney's dad needed to beat him so that the trauma could create that dissatisfaction that gave us one of the world's greatest storytellers. The output of the individual was worth the abuse or trauma that elicited the output. The means justify the ends. I don't agree. I think what Josh is failing to do, and what many fail to do as I've written about several times now, is appreciate the nuance. Mindfulness, or self-satisfaction, can co-exist with dissatisfaction. Rather than being mutually exclusive, these can be healthy balances of different mindsets at different times in different circumstances." (The Hardening of The Great Softening)

"I, like I've written about so many times before, struggle to get out of the nuanced middle ground where I can recognize both greatness and gore in what the United States represents. But I can't help but feel an optimistic bent. I see something flawed and broken, but still worth fighting for." (America)

"War mongering and expansionist colonialism will reign from multi-national corporations who envy the monopolies of oil, steel, and railroads of the past. And that will make just about everything more complicated, especially as long as moneyed influence remains in politics. All of these things are bad. But it doesn't change the fact that America is a unique bastion of freedom, opportunity, and achievement that represents a critical role in human progress." (America)

"The reality of these nuances represent the reality we live in everyday. The opportunities to solve these problems represent what Samwise describes as things "worth fighting for." In Jeff Daniels' speech, he declares that the first step to fixing a problem is acknowledging that you have a problem. And that might be true. But accepting the good and the bad is the critical first step in recognizing that fixing the problem is something worth doing." (America)

"I told you right from the beginning — I don't have an answer to this dilemma. The nuanced back and forth of labor vs. capital, basically. Its been a conflict for a long time, and I'm not going to solve it in one blog post. Not even in two. But I keep coming back to the need to acknowledge the reason why unions existed in the first place. Despite the often inefficient and occasionally corrupt results they produce, they are meant to serve a purpose." (Unions, Unions Everywhere)

"Especially in a world where instances of both fair treatment AND exceptional profitability were achievable… could that be achieved again? Could Tesla be more competitive, not less, if it took care of its workers? Could Amazon be an even larger, more successful company if it had hundreds of thousands of champions vs. negotiating table enemies? Why not hold companies to a higher standard of trying to clean up their own messes? Take some of those immense resources they use to optimize clicks, conversions, or ads, and allocate that brain power and money towards creating better and better organizations. Not just higher, and higher shareholder returns." (Unions, Unions Everywhere)

"I've always managed to straddle a myriad of typical lines between personalities and perspectives. I played sports in high school, but I hate sports. I'm a white Mormon, but Mitt Romney is the only Republican I've ever voted for. I'm a venture capitalist who thinks rich people don't pay enough taxes. I'm a personal pacifist and non-gun owner that believes an effective military is one of the single greatest capabilities the US needs to possess. But what that also means is that I'm sometimes caught off guard by the perspectives of a particular in-group. My shallow dabble across an eclectic collection of opinions and perspectives sometimes leaves me ignorant to what someone more defined by a particular thing would think is common sense." (The Apprenticeship Litmus Test)

"The very best entrepreneurs are not just storytellers. And the very best business builders are not just chasing payoffs. The people who build the most exceptional businesses are those that understand the artistically nuanced balance between big promises and big payoffs. Do they deliver every time? No. But they deliver enough to maintain that balance; that equilibrium between fantasy and reality." (Loudest or Proudest)

"No one went away with their minds changed. And that inability to settle into a nuanced middle ground has stuck with me. Not just in politics, but in most things in life. Any staunch beliefs, one way or another, have messy middles filled with nuance that are probably closer to reality. Management, strategy, religion, marriage, sports. But most people feel deeply uncomfortable with nuance, and increasingly so. Given everything that's happened over the last week, politics just happen to be the clearest place where this aversion to nuance exists." (Embrace The Nuance)

"The nuanced messy middle is that you can like Hillbilly Elegy and Demon Copperhead. You can believe that hard work can get people out of even the most hopeless situations. But you can also believe that it won't always work. You can believe in individual accountability AND the need for institution support of those whose individual capabilities won't be enough." (Embrace The Nuance)

I Write For Me, NOT You

"The other thing thats coming to mind is a quote, supposedly from Mark Twain:“I apologize for such a long letter - I didn't have time to write a short one.” Again, this idea that something worth saying well, or succinctly, is worth taking the time to do so. I'm thinking about all these things because, like has happened several times, I have so much to say that I can't say anything at all." (Long Enough To Matter)

"A lot of times my shorter posts come when I've bitten off more than I can chew in a big piece. This happened when I published Becoming An Allocator because I was trying to write The Value Chain of Capital, or when I wrote "Oops, I Did It Again" because I was trying to write Surviving The Death of Venture Capital. Funny enough, both of those pieces went on to become some of my more popular ones." (Panic Writing)

"I think my process has failed to produce something good plenty of times (today is probably one of those times). In part, its because I have this complex interwoven set of ideas that fascinate me. And they all flow together. And they require a concerted effort to pull them apart. Yet, I frequently find that a part of the panic is not just the timeline, but my lack of skill. Because of that continuous sense of inadequacy, I've find myself seeking out the thoughts and perspective of great writers, where historically I just focused on studying great investors and let the writing take care of itself. Increasingly, I feel like an inadequacy in my ability to write is an inadequacy in my ability to think." (Panic Writing)

"Although, often, the feeling of not being able to write every week comes less from not having something to say, and more from having too much to say. Every topic I want to dive in is beyond the capabilities of my “panic writing” on Saturday morning. But this morning is different. For the last two weeks I’ve been traveling—firm offsite, my Grandpa’s 90th birthday in Albuquerque, and a trip to SF for a board meeting. It feels like I haven’t stopped the whole time to catch my breath." (Taking a Breath)

"And I realized two things: (1) creativity comes in these sine waves where its more important for you to capture them when they come than it is to try and create them out of nothing, and (2) the topic was too big for me to cover this week. So I reflected on that reality. Had some mental appreciation for the opportunity I have to write and think out loud. And then I laid out the outline for the post I want to write, and I'll write it next week. As for this week, I just wanted to reflect on my own creative process. And acknowledge how quickly we can go from feeling like we have nothing to say to having too much to say that you don't have time to say it." (The Sine Waves of Creativity)

"I've always said the point of this writing isn't for you (sorry). It's for me. I've written about this before. "My writing each week isn't really meant for anyone but me, at least not in how its designed. I write to unpack how I'm thinking and the implications of the work that I'm doing." And what better way to unpack this conundrum of my thought funnel than to unpack it in writing, and to use that to come to a conclusion." (From Digital Sandbox To Digital Garden)

"I've written a handful of times about why I write. I've often pointed to the quote "I write because I don't know what I think until I read what I say." I've talked about my writing as a "secret public journal" and the driver behind my writing: "My writing each week isn't really meant for anyone but me, at least not in how its designed. I write to unpack how I'm thinking and the implications of the work that I'm doing." I've thought before about what I should do with my writing. I just hit 20K subscribers, which I’m incredibly grateful for. But my subscriber count doesn't grow as fast as some of the newsletters I love, like Digital Native, Not Boring, or Mostly Metrics. I've noticed that my niche that people seem to really like is venture capital explainers. The Unbundling of Venture Capital, The Puritans of Venture Capital, The Unholy Trinity of Venture Capital. When I write about that I add hundreds or even thousands of subscribers. If I stuck to that, I could do quite well. But I don't want to. I, occasionally, want to write about very different topics, like Books 2.0, Historical Futurism, or The Renaissance of Rise and Grind. Are they in my niche? No. Do they build my subscriber count? Not usually. So why do I write about them? Because, like I said. "I write because I don't know what I think until I read what I say." So for better or worse, I write about what I'm thinking about. And the reason I haven't optimized my writing for any particular audience or niche is because I want to write about what I'm thinking about." (Who Is My Neighbor?)

Your Fund Size Is Your Strategy

Multi-sector and multi-stage firms, by definition, had to increase in fund size because they were chasing a dramatically larger subset of opportunities. That strategy shift was a real-time display of the idea that "your fund size is your strategy." (The Puritans of Venture Capital)

"Now, some people would nod their head approvingly while dismissing the deal in the back of their mind. Big swing for a new fund, but it established them to go focus on traditional generational companies. But I think that's the wrong takeaway. If you want to be a capital agglomerator, I think your takeaway should be you need to get weirder, not more normal and elitist." (The Puritans of Venture Capital)

"Finally, a critical aspect of Renegade Partners was an acknowledgement of the adage, "your fund size is your strategy." In a world of capital agglomerators, there is an element of optionality that is preserved in having a controlled fund size. "The one rule you don't break in venture is the power law; meaning, 'can this investment return my fund?'" Other than that, your job is to back the best founders." (Renegade Spotlight: Renegade Partners)

"For many of these large funds their strategy has become "2% of the biggest number." How can they rack up the largest pools of capital possible to feed their ambition engines? In venture funds the motivations here are more opaque; its driven by the ambition of the founder of the fund or the budget demanded from a larger team strategy. But in Hollywood its a bit more transparent." (The Hits Business)

"I'll say this again before I get ranting. Pointing out a particular strategy exists isn't necessarily the same as passing judgement on that strategy. Having a bigger fund, only investing in sequels and reboots, none of it is definitively bad. It's deliberate. And it carries a particular weight of implication. And sometimes those implications are bad or good." (The Hits Business)

"If you dramatically increase the volume of capital without unlocking the volume of good companies to invest in, you ensure a higher volume of capital destruction. And you might think, "well, Kyle. More broken eggs, more omelette's, right?" Wrong. Eventually the pan overflows. Then you're just left with an ungodly amount of smashed eggs on the ground. And maybe the person who was giving you eggs to make the omelette will be much more hesitant to give you more eggs in the future." (Mo' Money, Mo' Problems)

"This hollowing out in the middle means that venture firms with medium funds and medium teams will have medium returns and be medium competitive. And, in the words of the good Lord himself: "I would thou wert cold or hot. So then because thou art lukewarm, and neither cold nor hot, I will spue thee out of my mouth."" (The Puritans of Venture Capital)

"As the fundraising environment has been less approachable the ability to raise capital for venture funds has certainly been more difficult. I've described it before as an "income inequality effect" in both venture and startups. The companies and funds raising the most capital continue to suck up a huge chunk of the attention, while the rest get less and less." (The Siren Song of Raising a Venture Fund)

"I come back to the idea in marketing that "half of our marketing budget is wasted; we just don't know which half." The same is true in venture. Probably 90% of venture funds shouldn't exist. But we don't know which will be the 10%. And the ones that were the 10% five years ago won't necessarily be the 10% today. So we're all in competition to be in that top that deserves to live." (The Siren Song of Raising a Venture Fund)

"Whether its the "big budget effect" or the "business of blockbusters," the focus of this line of thinking has always come back to the idea that, increasingly, the models of both Hollywood and venture capital revolve around "hits." The hits business is, in many ways, just a reflection of the power law. 20% of the inputs will lead to 80% of the output. But I think its more complex than that. The shape of the industry is changing under the weight of these increasingly centralized focal points." (The Hits Business)

"The important thing to note here is that these two profit drivers are driven off of two fundamentally different things. Fees are driven off AUM. The bigger the AUM? The bigger the fees. Carry is driven off returns. The better your returns? The bigger your carry. And maximizing fees vs. maximizing returns are not only fundamentally different games, but are in many ways diametrically opposed. The bigger your AUM, the worse your returns. Understanding that dichotomy is fundamental in understanding the strategy of many (though not all) venture firms." (Mo' Money, Mo' Problems)

"Now, I can't emphasize this enough. Big funds are not inherently bad or evil, any more than big companies or big countries or big dogs are inherently bad or evil. I’m not morally opposed to large funds any more than I’m morally opposed to large companies. If we go all the way back to the logic behind Fred Wilson's comment, that we should have lots of venture funds managing $100M vs. a few of them managing $10B, the logic is a function of compounding. It is easier to generate bigger returns on smaller pools of capital." (Mo' Money, Mo' Problems)

"The broader argument is about firm building. Building a good investment track record and building a good firm are very related but very different things. And firm building is where apprenticeship comes into play. If you want to build a firm that lasts beyond the success of an individual investor then you do, indeed, need to find ways to build up the rising generation." (The Apprenticeship Litmus Test)

"The clearest indicator that someone is failing to appreciate those differences is when they immediately dismiss anyone but the large, established funds. "Nobody can compete with Sequoia, etc." In an industry defined by disruption and competitive upset, nothing could be further from the truth. And don’t point out halo effects or capital retention. I never said its easy. But the reality is that anyone is capable of defeat. Anyone. The question isn't if, but how." (Different Strokes For Different Folks)

"And when it comes to what venture capital is, we sometimes think that the right definition (or game) is the one we think venture capital should be. You talk to any investor, founder, or LP, and they'll have a definition of what they think venture capital should be. Unfortunately, that can be very dangerous. Because as venture capital evolves it often tilts not in the direction of what you think it should be, but what the loudest people with the most capital decide they want it to be." (The Unholy Trinity of Venture Capital)

"Unfortunately, venture capital is uniquely resilient to this somewhat natural law. Not immune, but more resilient than the public markets. Venture capital has a much more palatable "halo effect." Self-fulfilling prophecies are much more possible in private markets. Its probably a combination of limited information access, capable hype engines (especially in the internet age), and big success stories like Google and Amazon that fuel FOMO. As a result, the loudest people with the most capital in venture are a lot more influential than the loudest people with the most capital in the public markets or real estate or bonds (whatever nerd is getting loud about bonds.)" (The Unholy Trinity of Venture Capital)

"Now, capital agglomerators are the first ones to say the last thing they're focused on is getting fat on fees. And I believe a lot of them. But the reality is that "what gets measured gets managed." And when you look at large publicly traded PE firms, like Apollo, KKR, or Blackstone, you see that they trade on a multiple of their management fees (fee-related earnings, or FRE)." (The Unholy Trinity of Venture Capital)

"I've said this before and I'll say it again. I am, by no means, saying that a16z or CPP or OpenAI are bad. But they are different. They are very different from the venture capital of yore. Granted, they may, literally, unlock artificial general intelligence in a way that will transform the world in ways unimaginable even in comparison to the renaissance, industrial revolution, or digital age. So maybe that's worth letting them dramatically reshape the face of how innovation gets funded." (The Unholy Trinity of Venture Capital)

"I certainly wouldn't say capital agglomerators, and their commensurate allocators and absorbers, are the only strategy that work. In a world of Amazon and Walmart, we still have other grocery stores and bookshops. But, by God, you know the only thing that is 100% certain to get sucked into a center of gravity like these behemoths? Something that isn't moving." (The Unholy Trinity of Venture Capital)

Think In Decades

"I'm coming up on my tenth anniversary as an investor. And after doing this for ten years, when I think back to when I was just getting started, I remember very clearly having role models. I looked at people I'd hear on podcasts or read about in the news and think, "Oh man! I want to be just like so-and-so." Fast forward ten years, I've met a lot of those people. I've co-invested with them. I've sat on boards with them. And I've realized... "huh... I guess I don't want to be like them at all." (Crafting Your Average)

"People use establishment or in-group thinking as their "intellectual seat-belt," which makes them feel safe enough to just believe something without evaluating it themselves, leaving them to think less carefully." (Intellectual Seat Belts)

"As it relates to the world of investing and company building, I think the pursuit of being wrong is a counter-framing to the question, "what do I have to believe?" The question should also be "in what ways am I most likely wrong?" I've written about this before when I talked about "pre-mortems." With all of your beliefs, you are likely thinking in a less safe way because you think any number of systems, in-groups, or assumptions are keeping you safe to think what they tell you to think. That's wrong. You would be more safe if you assumed that every belief was worthy of questioning. Pursuing wrongness will pressure test any idea, whether its a belief, value, or investment." (Intellectual Seat Belts)

"A friend of mine who had made a similar decision, jumping from an established firm to build his own firm, gave me an analogy that would from then on shape my perspective on the types of work one can do. "There are two kinds of people in the world. There are people who are building trains, and there are people who are riding the trains that other people have built. Right now, you're riding the train. The question is, when are you going to get off?" (Driving Your Own Train)

"When I look back at those first two decades, they feel like a sprint. I did so much in what felt like so little time. But I feel the implications of those choices every day in who I am now, for better or for worse. From 22 to 32 I was settling in for the long-haul. While my first two decades would establish things that are difficult to change, but not impossible, my third decade was setting in stone certain things about me. I am a father, a husband, and a Christian." (Decades)

"You hear stories about companies like Patagonia setting up 100 year business plans, or businesses like the 33K in Japan that have been around for 100+ years (the most in the world). And you realize that centuries are a reality for businesses the way that decades are a reality for people. Companies like the New York Stock Exchange are 200+ years old, and still kicking. Long-term thinking suddenly makes short-term thinking appear incredibly silly. I still remember some of the life plans I've white-boarded out for myself and how they were so very wrong. They were riddled with recency bias. I had met someone at a conference that I liked and thought "this will be my whole personality." (Decades)

"A old proverb that the Long Now Foundation quotes frequently says "If you’re planning for a year, plant rice. If you’re planning for a decade, plant trees. If you’re planning for a century, plant people." I've written frequently about this idea of the natural selection of time, which effectively means letting opportunities have the chance to survive or fade away. But when I think back to what it means to "let opportunities survive," it always ends up coming back to people." (Decades)

"Dreams are boundless not as a defect, but by design. What good are dreams if we bound them in reality? In current limitations? Thinking in days will always have bounds. Thinking in weeks will feel constrained. Even thinking in years will have limited cycles. But imagine your life a decade from now. There are very few limits to what you can accomplish." (Decades)

"In everything we do, I think we would be better served by acknowledging the responsibility we have. Any commitment we make, any project we undertake, any investment we make, any relationship we have — it's a stewardship. We're allocating something to those things. And I think, too often, people equate their lives with the outputs. "What do I get out of this?" It’s unfortunate. Very rarely do we stop enough to say "what do I have the opportunity to give?" And, more importantly, what do I get to become as a result of that giving?" (Even More a Father)

Venture Psychology

"Most VCs became spineless, submissive, love-hungry puppies that will do anything for anyone's validation. This leads to several unfortunate realities about most VCs: (1) they're skeptical of anyone who likes them, (2) they're rarely honest about when they might be wrong, and, most importantly, (3) they're usually incapable of providing valuable feedback due to a dynamic I call "The Trough of Feedback." (The Trough of Feedback)

"I have neither the time, nor the psychology PhD to unpack why most VCs have such a sense of self-loathing. But my guess is it just has to do with their famous pattern recognition. The best founders running the best companies don't have to perform, so they don't give VCs much deference. So investors have learned that pattern: the less deference they give to me, the higher quality the company probably is." (The Trough of Feedback)

"A lot of times, that inability to be honest is tied to the same root cause that stops VCs from giving meaningful feedback. At the end of the day, a VCs job isn't to give you useful feedback, or advice. Their job is ensuring they have the relationship, access, and insight to invest in the best companies. And while admitting that your wrong would, in the long-run, make you better at identifying the next time you're trending towards wrong, in the short-term it damages your credibility." (The Trough of Feedback)

"People are like that. Seeking non-conformity through conformity. The more you pay attention to the way people make decisions, the more you see thousands of years of social creature / herd behavior rear its head. The same is painfully true in venture capital. I've written before about the Bubble Brains in venture. But the thing I failed to emphasize was that sometimes we think the Bubble Brains are just the masses. The dummies. The most programmable. But in reality, people in positions of power and influence are just as likely to be Bubble Brains because their financial incentives are the driving force for them." (The Tail That Wags The Dog)

"In a perfect world, investing should be an act of taking your world view and deploying capital to try and shape reality to that world view. If you believe a future is optimal, you should try to help build it. Investments become a lagging indicator of your beliefs. Often, however, the opposite happens. Whatever investments you end up making can play a big role in shaping your world view. Investments become a leading indicator of your beliefs." (The Tail That Wags The Dog)

"Granted, most investors can't even admit that they're ever wrong. Some, like my acquaintance, were willing to at least say they got something wrong. But it happens once it was effectively undeniable. Almost no one can admit they're wrong in the midst of the fight. As the battle rages on. Why? Incentives. They have a financial incentive invested in the world view that investment demands." (The Tail That Wags The Dog)

"VCs are, inherently, incapable of that same long-term alignment. They have investments that have defined (and relatively short) hold periods and funds that have lifecycles. It's almost impossible for VCs to be financially incentivized by overall outcomes. Structurally, the business forces VCs to form their world view and belief around incremental outcomes. What needs to happen for my companies and my fund to do well? Anything outside of that shouldn't be accounted for as motivating factors for them." (The Tail That Wags The Dog)

"Regret porn induces FOMO and leads you to making bad decisions. Not because you believe the thing, but because you’re so afraid of the regret porn Afraid of missing out again. The same way actual porn can damage your ability to make long-term commitments, regret porn can damage your ability to have long-term conviction." (Regret Porn)

"VCs sit along a very strange spectrum between near absolute power and near absolute powerlessness. When a company is more desperate, they put a lot of power in a VCs hand. The same characteristics that make a company desperate are the characteristics that would make a VC pass. Customer concentration, bad growth, churn, negative customer reviews, employee turnover. The worse a company is, the more likely they are to offer a VC deference." (The Groucho Marx Mandate)

"The "little sister syndrome" is the result of improper anchoring. Anchoring to who someone is when you first meet them will make any increase in value difficult to discern because you're still anchored to an irrelevant data point. This is why, quite often, you see venture capitalists build their career through lateral moves rather than internal promotions." (The Little Sister Syndrome)

"VCs talk all the time about their "pattern recognition," and the magic mental model data engine that helps them "pick winners." But often investors can have their "anchor" revealed (sometimes in embarrassing ways). The better investors are the ones who can recognize that mistake and course correct. Unfortunately, the typical investor is the one who puts the blinders back over their eyes and keeps right on with their existing anchor." (The Little Sister Syndrome)

"Who knows. But I'm of the opinion that venture funds are biological organisms. Companies, funds, any organization — they're all a function of the people inside. And the better or worse the people inside are, the more likely that organizational organism is to live or die." (Mo' Money, Mo' Problems)

"We live in an age of grifters, hucksters, scammers, and narrative weavers. Everyone is looking for the opportunity to take advantage of others at the expense of any long-term value. And, what's worse, they've managed to craft such a strong sense of self that they can't acknowledge the way in which they've taken advantage of people." (Against Your Own Self-Interest)

"And its important to focus on the premise of my point. I didn't say apprenticeship in venture doesn't exist; it absolutely does. But there is no structural incentive from the get-go. "It has to be be built in." Let's look at the business of venture capital and try and find where apprenticeship pops up." (The Apprenticeship Litmus Test)

"In a venture firm internal political power comes from "getting deals done." When the main currency for the culture is getting credit for making investments it aligns every activity around deploying capital and judges it against that bar. That's one of the reasons other functional areas in a firm (talent, BD, content) are second-class citizens. If you can't directly correlate your contribution to "deals done" then your value is unclear. This would be like “closing a sale” being the only way anyone at a company can gain political power. Makes it real tough for engineering or marketing." (The Apprenticeship Litmus Test)

"An important logical assumption from that is that before you can act, or decide anything, or join a group, you have to have beliefs. And too often, as I said in that piece on human nature, "When people substitute their own value system with a cookie-cutter platform from their in-group the first thing to die is nuance." So, instead of leaning on group membership, or group think more generally, for your beliefs, you should, instead, pursue the acquisition of wisdom that will shape your beliefs. Then, you can act on it." (My Cup Runneth Over)

"What I mean by performative failure is summed up by the idea that "nothing ventured, nothing gained." Another word for ventured could be risked. And we have a plethora of people who are more interested in playing founder or investor or advisor or "thought leader" in a mostly aesthetic capacity than we do people who are actually putting things on the line." (Performative Failure)

The Moral Case For Ambition

"Understanding which games are zero-sum vs. non-zero-sum are a critical variable in game theory. I've written before about playing different games where I said, in effect, "the only stupid game is not knowing what games other people are playing." Identifying the players in a non-zero-sum game can be a form of arbitrage to optimize cooperation and outcomes. And introducing and fostering more ambition in the world is one of those non-zero-sum-games." (The Non-Zero Sum Game of Ambition)

"When I talk about ambition being a rare commodity, there are two aspects I want to address: (1) ambition is rare, and (2) ambition is monetizable (or a commodity; something that can be bought and sold, for better or worse.)" (The Non-Zero Sum Game of Ambition)

"People who take that ambition, that willingness to put themselves out there, and identify the way that ambition can get them paid often have strong incentives to accomplish the thing they're working on, regardless of obstacles or setbacks. We call these "mission-driven founders." (The Non-Zero Sum Game of Ambition)

"But you having ambition has zero impact on someone else's ability to have ambition. Even if you become direct competitors, its not your ambition that gets limited by competition. It's revenue, its market share, its employees. Non-zero things. But no one can compete away your ambition." (The Non-Zero Sum Game of Ambition)

"So in a world where ambition can be powerful, and we want to seek truth, and build the future, what can we say about a huge swath of the world that doesn't feel that same ambition? That same drive to accelerate? Because, whether you like it or not, you can't accelerate a society despite itself. Society crumbles or ascends based on its collective ability to believe in something. The American Dream isn't a policy, or the result of a political party. It is a collective fever dream of people believing something hard enough to make it happen. But without that belief in a better life as the result of hard work, we can build all the rockets, robots, and AI we want. But society won't be lifted in spite of itself." (The Hardening of The Great Softening)

"Unlike mythical tales of destiny, magic swords, or commanding oracles, the reality is that no one chooses your quests for you. In the paraphrased words of the Monty Python fellow in the muck, "strange women, lying in ponds, distributing swords is no basis for a system of [anything]!" Your quest is a fundamental component of who you are. It can't come from a blog, book, conference, or cocktail." (The Hardening of The Great Softening)

"[Larry H. Miller] died at the age of 64. He didn't take care of his body. He didn't engage with his wife or children. He was a good man, and a generational business man. But at the end of his life he regretted it. He regretted not spending more time with his family. Not seeing his children grow up. The key takeaway for me from his life is if you want greatness here, you may have to sacrifice greatness there. He failed to embrace any present-mindedness because he was wholly captivated by future-mindedness." (The Hardening of The Great Softening)

"As we all seek to do work that is meaningful. To build companies that are meaningful. To hire people to build meaningful things. Whether we like it, or not, it will always come back to an individual equation. Each person is responsible for articulating how they will judge their own life. What will matter to them when all is said and done. And as long as we continue to cede that responsibility to other forces we will remain unfulfilled. But as soon as we reclaim that responsibility, even if we fail, we will know what satisfaction truly is." (The Hardening of The Great Softening)

"There is an increasing movement within tech workers to unionize. That happens when massive employers with hundreds of thousands of workers can no longer hide behind the scrappy excuse of "startup." And, back to Bill Gurley's point, I think the "scrappy excuse of startup" is a valid one for people who are working to build a company out of nothing. But there are a LOT of people who, even as engineers, don't want the risk and grind of working for a startup. They want to build technology in a well-organized corporation for reasonable pay and benefits, recognizing that that means less reward. But that's okay. What's not okay is for people who want to work in that situation being forced to feel like they're working for a scrappy startup. Or, even more commonly, for them to be treated like inhuman commodities that can be switched out like lightbulbs." (Unions, Unions Everywhere)

"So is learning important to help us grow as people? Most definitely. But is it also critical in maintaining any semblance of a free and informed democracy? Also yes. Without well-informed beliefs, we start to become reminiscent of Paul's description of children in Ephesians 4: "tossed to and fro, and carried about with every wind of doctrine, by the sleight of men, and cunning craftiness, whereby they lie in wait to deceive." (My Cup Runneth Over)

"And across the board, all of us would do well to better calculate the risks we want to take. I write all the time about a phenomenal essay called Choose Good Quests. We should choose which failures we're willing to risk because of the value of the thing we're attempting to pursue. The worthiness of our pursuits make the glory of our failures worth it. To fail in pursuit of cheapness can never result in glorious failure. But to fail in pursuit of the exceptional, the world-shaping, or the divine will yield failures worthy of our eternal potential." (Performative Failure)

"I think this idea is one of the absolute most critical, so I'll repeat it again! We spend so much of our creative effort not in creating, but in constraining. We leverage social regulation to punish deviance when, in reality, the ONLY way progress occurs is when deviance is unleashed. And I agree with Visa. If we could unlock deviance, and empower people to pursue their uniqueness, we would have "1000x the greatness." (The Levers of Innovation)

Beware The Profit Motive

"You start to feel hopeless because everything, from guns to climate change to healthcare to prisons, are dripping with somebody else's profit motive. How do you change anything when there are companies making billions of dollars off of things not changing?" (Science Fiction's Dueling Fates)

"Imagine a fiction series, akin to Jack Reacher, traveling from jurisdiction to jurisdiction going to war with the monied incentives behind the existing prison status quo. Give the villains that are trying to make money off of "repeat offenders" into eternalized caricatures of evil in a particular fictional antagonist. We want people like Henry Kissinger or the Murdoch's to bristle at how they're portrayed in The Trials of Henry Kissinger or Succession. When you do something for work that no one sees, you're profit-driven. When your friends and family love a show or book that portrays you as a monster? You become socially motivated." (Science Fiction's Dueling Fates)

"As any good red-blooded capitalist does, GPs have a profit motive. How do they make money? Two ways: fees and carry. A typical fund has a 2 and 20 model. If you raise $100M or $10B, you will typically get somewhere around 2% of that total each year to pay salaries, expenses, etc. Then, you have an agreement with LPs that, once your return the original money they invested, you'll get to keep 20% of any upside. Again, as the true-blue American capitalist that they are, VCs will typically work to optimize those two profit drivers. The important thing to note here is that these two profit drivers are driven off of two fundamentally different things. Fees are driven off AUM. The bigger the AUM? The bigger the fees. Carry is driven off returns. The better your returns? The bigger your carry." (Mo' Money, Mo' Problems)

"The status quo is for everyone to adhere to what economics refers to as rational self-interest. We're all gonna "get ours." Now, there's a myriad of terms for times when people act against their own self-interest, but often they're reasons people are acting dumb. Loss aversion, hyperbolic discounting, principal-agent problems, irrational exuberance, satisficing, bounded rationality. All these terms typically exist to explain, "here's why you're being stupid; you should be optimizing for your own rational self-interest instead." But then there are those rare instances where people demonstrate the ability to suspend their own self-interest as the primary variable for optimization and act in favor of higher reasoning. Whether thats sacrificing your own self-interest for that of your spouse, your children, your extended family, your community, your company, your country, or even just strangers." (Against Your Own Self-Interest)

"Sometimes acting against your own self-interest is economically irrational. But being capable of finding the rationality in that is the only way to be human." (Against Your Own Self-Interest)

Internalizing Negative Externalities

"There has to be an understanding that everyone's arguments come with an inherent bias. We need to do a better job of internalizing the externalities that go into the technology we buy and build. This is why one of my favorite people to watch is Chris Sacca. He's running a firm with a very clear bias towards a specific outcome: sustainability. But he does it in a way that clearly articulates his incentives. He’s not saying, “this is important for everyone, and all our returns are going to charity.” He’s shooting straight. I’m going to make a lot of money from this by working with greedy, self-interested people. But that’s a good thing! If we’re going to make a dent in climate change, we can’t do it just by making people feel bad." (The Tail That Wags The Dog)

"Often my sense is the people pursuing the big believe that it is mutually exclusive with the good. They're satisfied with the "good enough." But I think that's wrong. I think thats as wrong in moviemaking as it is in company building. You can build outcomes that are just as big while also focusing on what is good. Whether thats a good movie, in terms of quality, or a good business in terms of profitability, externalities, and overall outcomes." (The Hits Business)

"The act of Value Creation has, in some cases, gotten a bad rap. I think this comes from the concept of Gross vs. Net Value Creation. Gross Value Creation is just taking into account every good thing that comes from a particular product or service. Net Value Creation is when you take into account the negative externalities as well. When people crap on venture capital and tech as terrible, its because they're measuring things in terms of Net Value Creation, rather than Gross. iPhones have immense Gross Value Creation. But you get more bummed when you start to think about anti-socialization, addiction, and even the child labor leveraged to create them in the first place. Facebook, same thing. Connecting, entertaining, and informing people can have a lot of Gross Value Creation. But Net Value Creation of the service gets fuzzier. Typically, it's too difficult to create a product or service with Net Value Creation in mind. Often, because you don't know what negative externalities will rear their head over time, or at scale. So you build the best product you can and then try to address any negative results that may come as offshoots of what you've built." (The Value Cycle)

"This idea of internalizing negative externalities is, I realized today, up there with other topics I've touched on a lot. From VCs to startups to governments, I've written over and over and over and over again about how one of the biggest weaknesses of these types of massive institutions is either the lack of ability or willingness to deal with the problems they cause." (Unions, Unions Everywhere)

"When you're faced with the consequences of your actions, that's when you demonstrate who you really are. And the unfortunate reality is that the majority of large organizations who have taken upon themselves the responsibility for tens of thousands or hundreds of thousands of employees and workers are typically more keen to push off the consequences of their actions, rather than deal with them." (Unions, Unions Everywhere)

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