1. Two of the most important contributions of a VC to a young company are enthusiasm and appreciation. The corollary to this is that you should only invest in companies about which you can be enthusiastic and appreciative.
2. Fred spent 2 years internalizing the lessons from the closing of his fund Flatiron Partners in 2001 after the dotcom bubble burst. He attributes much of his ensuing success to this challenging period of his life.
3. Many of the best entrepreneurs and resulting wealth creation opportunities in the future will come from emerging markets. That’s where Fred would go if he were 35 years old today.
Numan Numan from 212, our co-investor in Insider, Hemenkiralik, and Hotelrunner, recently wrote back-to-back blog posts on his learnings from helping pioneer the venture capital ecosystem in Turkey.
Founded in 2011, 212 is one of the earliest VC funds dedicated to Turkey. This gives Numan a valuable perspective on what it takes to invest in startups in a young and fast developing ecosystem. In his posts, Numan identifies four key success factors including the importance of trust, adopting a pioneering attitude, resilience, and cultural understanding.
If you’re fortunate enough to have your basic needs met, what do you do next?
There are two overarching approaches to this problem. The first is to think about what you want to do and to do that. The second is to think about what you are best positioned to contribute to what other people need or want and to do that.
Taking the first approach gives you the short term happiness of doing what you want. However, just because you’re doing what you want doesn’t mean that this is what you are best positioned to contribute to other people. Other people may not want what you’re doing as a category, or they may not need what you’re doing coming from you due to others doing it just as well or better. Long term value and happiness is produced from doing things that people need or want which can’t be done by other people. So just doing what you want may but is highly unlikely to coincide with long term value and happiness.
If you instead do what you are best positioned to contribute to what other people need or want, it may take some time for you to get adjusted to in the short term because you’re not doing exactly what you want. However, since we’re creatures of habit, if what you’re doing isn’t a radical departure from your character preferences, you’ll eventually get used to what you’re doing such that what you’re doing will also likely develop into what you want to do. And when the long term comes around, you’ll be rewarded with value and happiness.
When you’re in a junior role in an organization, you’re responsible for the direct output that you alone produce. As such, your performance depends on being technically proficient in what you do.
As you progress to more senior roles, or if you start an organization as a founder in which case you’re in a senior role by default, you’re responsible for the output of your organization. And this output is the sum of the individual outputs of everyone else in the organization.
As such, having the technical proficiency to understand the outputs of the people in your organization is table stakes. In addition to this, your performance depends on maximizing the outputs of the people in your organization. This requires attracting and selecting the right people followed by understanding and motivating them. And this first requires understanding yourself. It requires emotional proficiency.
Fortunately, just like technical proficiency, emotional proficiency can be learned. You just have to value it at least as much as technical proficiency. If you do, you realize that it’s at least as valuable.
Entrepreneurs see just a few term sheets while building their startups. This is especially true for first time entrepreneurs.
Since investors work with many companies, they see many more term sheets.
As a result of this discrepancy, entrepreneurs often come across term sheet terms that they don’t understand, find clear, see the purpose of, or find fair.
When this happens, one of these three scenarios plays out.
1. The entrepreneur doesn’t ask about the term with the goal of trying to understand it. This is the worst possible scenario because what you don’t understand or find clear often comes back to haunt you in the future.
2. The entrepreneur asks about the term and digs in until he really understands and accepts the reasoning behind it. If it’s a red line he absolutely doesn’t want to cross, he refuses the term.
3. The entrepreneur asks about the term, is told that it’s a standard term, and accepts this. This is just as bad as not asking about the term because it results in the same lack of understanding. There is no such thing as a standard term. Even if a term is indeed found on most term sheets, it’s there because it addresses a possible future scenario where there may be a divergence between the objectives of the entrepreneur and those of the investor. With the benefit of having seen many term sheets in the past, it’s the investor’s responsibility to explain the reasoning behind each term that the entrepreneur seeks to understand. If the investor says that it’s just a standard term, they either don’t understand it or don’t want to share the reason for it. Both are red flags.
Today’s video shows how an individual can build an iPhone from scratch. It’s not exactly from scratch because parts like the logic board are sourced as an assembled product rather than as individual end components.
However, as the video shows, widely used hardware components are quick to commoditize. After this hardware commoditization, software remains the differentiator.
This was a fascinating read about what it’s like to work in an iPhone factory. Although it was possible to predict that this is what it would be like, having this prediction confirmed by the account of an actual worker made the feeling much more poignant.
1. Most great things we consume or experience have large hidden costs of production where the benefit-to-cost ratio of producing varies greatly among producers. And there is merit in taking action to lower this free market driven cost of production to balance the well being of producers with low benefit-to-cost ratios.
2. Manufacturing is likely to sustainably shift to geographies with higher labor costs only when robots with negligible operating costs undercut the labor costs in low cost geographies. Attempts to bring back manufacturing jobs to higher cost geographies will be short-lived in the absence of automation. And the very definition of automation means that when this occurs, the absence of manufacturing jobs will be a global phenomenon.
3. We should be grateful to be able to work in roles where we can express our creativity under good working conditions.
Our portfolio company Modanisa is the world’s leading e-commerce site dedicated to female Muslim fashion.
The company recently shared a short video dedicated to the women that it serves. What’s unique about the video is that it features the participation of non-Muslim women who wanted to show their support for the active lifestyles of Muslim women.
When someone asks you for your thoughts on something, sometimes you’re knowledgeable about the topic and can answer confidently.
However, many times you don’t know about the topic, or even if you do your thoughts aren’t sufficiently well formed to carry valuable insights for the questioner.
What do you do in this case?
Most of the time, most people choose to feign knowledge. This comes from seeing a lack of knowledge and informed views on a specific topic as a weakness which should therefore be concealed.
While this behavior is observed most often in domains where there is significant uncertainty and therefore not a single right answer, it also takes place in domains with a clear single correct answer. Business and politics are examples of the former. The range of responses you get when asking for directions to a specific location is an example of the latter.
In fact, saying “I don’t know enough about this topic to provide an informed and valuable answer”, or simply “I don’t know” is a sign of strength, not weakness. The reason is that there are too many different subject matters and too much knowledge being continuously created within each subject matter for any one of us to know and have informed views on multiple topics.
What we don’t know is far greater than what we do.
So if someone, including yourself, never says “I don’t know” no matter what you ask them, you can be sure that some of what they’re telling you isn’t sufficiently well informed to be valuable.