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Sunday Reads And Listens...The Best Founders and Best Investors
Howard Lindzon
December 18, 2022
Good morning...
I missed a few days writing. I left my laptop home in Phoenix to force myself to switch to an iPad and it did not go well.
New York wore me out. My brain said I could keep the same pace as always but my calendar was too dense. The weather did not help.
Rachel and I did make it back for the family Hanukkah party Ellen organized at our home Friday eve and all is well.
Last night Ellen and I went to the Suns/Pelicans game and watched Dev Booker score 58 in a comeback win.
Todays I will get a long ride in and get ready for a busy week.
My job is easy compared to most, but when the markets are a mess (like they have been in 2022), you can't hide from the work that needs to be done. Even the 'best' founders need help. I like this Paul Graham 2012 post titled 'A Word To The Resourceful' ...the gist
The unsuccessful founders weren't stupid. Intellectually they were as capable as the successful founders of following all the implications of what one said to them. They just weren't eager to.So being hard to talk to was not what was killing the unsuccessful startups. It was a sign of an underlying lack of resourcefulness. That's what was killing them. As well as failing to chase down the implications of what was said to them, the unsuccessful founders would also fail to chase down funding, and users, and sources of new ideas. But the most immediate evidence I had that something was amiss was that I couldn't talk to them.
The word 'tourist' has been used a lot lately as it relates to startup founders and investors. I imagine it means people passing through on the way to another career.
As an investor, the biggest mistake I continue to see is something I have named 'Valuation Derangement Syndrome'. Investors and founders are not comprehending the valuation compression that has taken place and the continued compression likely from higher rates and de globalization.
It is one thing to make these mistakes with your own money, but another to continue to make these mistakes with other people's money.
This problem of money raised and not deployed in the venture markets is likely going to prolong this delusion and lower returns for many.
My day job is to piece together a picture of this new macro and find the best founders and investors that understand all this so that our LP's continue to make superior returns. My job at its core is that simple because the best founders - as Paul Graham says and I agree - take care of themselves.
As it relates to being a 'great' investor Frederik Gieschen has a great post on the subject this week titled 'Between Rest and Overdrive:Are Great Investors Lazy?'. I love the opening and have been trying to live by this the last few years as prices in the private markets were silly...
One of the arcs of Warren Buffett’s career is the shift from an aggressive search for opportunities to developing a reputation, network, and capital structure that unlocked a stream of inbound ideas. It is a key difference between the young entrepreneurial hustler and the market’s elder statesman. It illustrates that an active investor aspiring to a long career of compounding needs to think carefully about managing their energy and attention, their stress levels, and the structures that support or undermine each.
Take the time and read it.
For those that want a great series of podcasts on the subject of investing and founders including a summary of paul Graham's essays, try the Founders podcast. Here is the link.
Have a great Sunday.
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