How Much Should You Lie?
“Clearly it’s not zero, clearly it’s not Theranos, but that’s one large middle ground.”
This question is posed to startup founders and managers whose job it is to create something out of nothing. The reflexive answer is “not at all,” but I think it’s an interesting debate and a very fine line.
As a founder, you have to will into existence your vision of the future. You need capital to do that, and to get access to it, you need to convince others of your vision. An equity investment (especially in a startup) is just that, a blank check ticket to a different future. You don’t get anything in return for your capital right away, but if the founder can build this different future, you will be rewarded for believing them early on. In the process of selling an investor on this vision, how much creative license should a founder have?
I can’t help but think that the vast majority of “lies” told to investors are never surfaced because they were turned into “truths” before anyone found out. If you sell a vision rather than a reality, then execute on it, you’re a hero; if you don’t execute, you’re a liar.
How Politics Became Pro Wrestling
Also, Part 2 - When Fake Growth Leads to Real Violence
File this under concepts that, once you are aware of their existence, seem to show themselves everywhere and are not easily forgotten. This two (eventually three)-part video essay series explores the concept of Kayfabe - a system of stratified lies created to transition from failed reality to successful fakery. It will make sense after watching the videos.
Kayfabe explains why it sometimes feels as though politics is largely a staged game and that there is a very thin veil of shared delusion that we all just agree to so we can maintain order.
I had seen these videos last year and was reminded of the concept when watching the Netflix movie Don’t Look Up, which explores what would happen if this veil was abruptly lifted by an event like a world-ending comet heading toward us.
Weinstein explains the concept here in writing, all the way back in 2011.
Prisoners of Scale
Mike Solana’s Pirate Wires Substack is exceptional. He writes on a unique mix of culture and technology and always seems to draw a line through seemingly unrelated issues to capture what no one else can put into words. I found this most recent edition to be particularly good:
“The relentlessly-measured status of social media (follower counts, shares, engagement), corresponding almost one-to-one with the ability of social media influencers to earn money, has metastasized in an age of cancel culture, and reduced most of these people to a perpetual state of anxious misery. Our new celebrities are puppets, capable only of sharing the pieces of their lives the public finds acceptable.”
Why Do Money Managers Fail?
WCM’s Paul Black says that “the primary culprit almost always relates to people and culture… When times are good, bad investment company cultures and remain dormant.”
Since reading this post, I have hunted down all the info I can from WCM and CEO Paul Black. I think they’re worth paying attention to because they’ve seen it all. The firm was successfully managing several billion before drastically underperforming and having AUM drawn down to a fraction of that. Without firing a single employee, WCM made contrarian bets both on people and investment strategies, regained their footing, and now manages over $100 billion.
WCM investors have made several appearances on Ted Seides’ Capital Allocators show, which I tell a bit more about the firm’s approach to people and investments.
Stewart Brand on Starting Things and Staying Curious
I really enjoyed this interview with Stewart Brand, who I was previously unfamiliar with. The guy is incredible - he was around for an involved early in so many important cultural milestones, and he’s still super sharp at 83.
Brand created the Whole Earth Catalog, among other things. He was also a soldier in the U.S. Army, a photographer, a prominent hippie, one of Ken Kesey’s Merry Pranksters, a member of the MIT Media Lab and the Santa Fe Institute, founder of the Long Now Foundation, and a personal friend of Steve Jobs, the Grateful Dead, and Patrick Collison.
This interview also highlights just how talented Tyler Cowen is as a podcast host. He is so well-researched and respects the listener’s time by asking very pointed questions then sitting back and listening.
A Few Things We Learned in Q4 2021
Ram Parameswaran and the Octahedron Capital team put together a massive slide deck each quarter that provides a high-level but comprehensive view of developments in digital advertising, gaming & content, payments & fintech, e-commerce, and software.
The content of the slides is primarily quotes from company earnings calls and graphics from presentations. Very concise commentary at the beginning of each slide eventually tells a narrative that captures the dynamics of both the broader themes and the companies involved.