What I read and found interesting this month, along with my thoughts on them. 

Podcasts

1/ How to strategically position a venture firm in a crowded landscape #1

Nakul Mandan, Audacious Ventures, on Venture Unlocked w Samir Kaji

I thought it was an excellent episode for us venture nerds. Any one who finds the craft of venture (or even strategy in general) will find this podcast interesting, given it covers how a GP Nakul Mandan, thought through design / strategic choices to position Audacious Ventures in the crowded seed landscape. One of those rare podcasts that will appeal / be useful to both ambitious young VCs obsessed with venture craft as well as senior VCs looking to start their own funds:)

Specifically, I really liked how they decided to use talent / recruiting as a key strategic lever, and how they effectuate (such an ugly word I know!) it by giving their head of talent, Samantha Price, a seat at the high table, and, not having bonuses for the talent team (they don’t want recruiters to push candidates down founders’ throats, and misalign incentives). The other point I liked was Nakul’s clarity around why he wants to pursue a platform / ‘machine’ approach as opposed to an artisanal approach. 

Recommended for a rare view into how an emerging GP crafts a strategy for his firm. White spaces are few and far between in venture today, so it is fascinating to see Audacious hit upon one. Venture has looong feedback loops so it will take time for us to know if their strategy was successful, but I felt it has the potential for success given the thought and craft given to it.

Nakul: “VCs, the large, the branded firms that we all admire, Lightspeed, Sequoia, all of these, became too large to service the seed stage entrepreneurs.  I’ve talked to a lot of seed stage managers on this, and we talked about the big firms. The reality of their business models are fundamentally different. When you’re raising a billion, 2 billion, 5 billion, even $8 billion, at the end of the day,  your job is to put as much money in very clear consensus companies.  Series A, Series B, Series C, Series D. If you do seed checks, it’s typically for option value versus anything else. And one of the things that a lot of seed stage funds sell against is, well, if you work with big fund X and they put in a million dollars, 2 million out of a billion dollar fund, they’re not going to pay attention. You’re not going to get the senior partner. With us, you get the senior partner. I have one person. I do everything. I’m your first call.

So as crowded as the VC market is, the one gap in the VC market that I saw was that there’s no gold standard VC or seed stage firm. Other than First Round Capital, there’s no platform firm at seed. First Round has the brand cachet and rightly so of being the sequoia of seed. But after that, there’s a steep drop in seed firms.…Chemistry, all of these want to start series A firms. So true GPs don’t ever start seed firms. So the first gap I saw was that there’s an opportunity to build a gold standard seed firm. Which people like me can do and I’ve been trained to do, but people like me don’t do it.

The second gap I saw was, which is more fun, actually is, okay, if we do want to build a platform firm, what is it going to be our value proposition beyond advice? For me, as I thought a lot about it, it came down to where we can create the maximum impact is building an exceptional team around the founder. And I can go in a lot of depth around it. So our first employee after me was our talent partner alongside MZ, my investment partner. And half of our team today is recruiters. So we focus on two jobs at Audacious. Invest in force of nature founders, help them recruit an amazing team. Then we get out of the way.”

Link to excerpts from the podcast episode I found interesting.

2/ How to strategically position a venture firm in a crowded landscape #2

Ramtin Naimi, Abstract, on Colossus Invest Like The Best w Patrick O’Shaughnessy

Like the above episode, this one too is a great venture strategy case study. Easily one of the best podcast episodes I have encountered in recent times. There are two parts to the episode. The first is a long but utterly fascinating dip into his art collecting journey, his art collecting / investing philosophy, the mechanics and landscape of collecting, and the parallels with venture. This alone would have made it a good podcast. 

The next part, which covers the journey of Abstract, his venture investment firm, and their distinctive approach, combined with the first part, makes it a great episode. In the second part, what stood out was the strategy they adopted to carve a niche for themselves, 1) as an investment partner to multistage funds, figuring out the kind of founders they liked, and coinvesting with them. They slowly evolved out of that to become a fund that now leads, but that strategy got them established. 2) supporting founders on fundraising and becoming exceptional at it, so much that other coinvestors too defer this part – fundraising for the next round – to them. It is a good case study on how a venture fund figured out a clever strategy to win a successful position in the venture landscape (Audacious Ventures above is another good example of this). 

Ramtin: “The thesis in which I started Abstract was trying to identify which companies have the highest likelihood of becoming power law companies. And I identified power law by any companies that either had a private market cap or exited north of a 5 billion valuation. What I’d realized over time was that if you eliminate Uber and Roblox from the equation—whose seed rounds were led by First Round Capital—it’s close to impossible to identify power law companies in which the seed round was led by a seed-stage venture capital firm. This has changed in recent years, which is why our strategy has also evolved. But the thesis in which it was built off stayed constant.

And that multi-stage tier-1 VC firms are better at seed investing than seed funds are. And it’s not to say that they’ll outperform them because I don’t think the portfolio construction model allows for that anymore at the scale of those funds. But I do believe that the power law companies of the future will be more likely to have seed financings led by multi-stage venture capital firms and seed-stage venture capital firms. And in the early days, people didn’t think multi-stage firms did much seed investing. But if you look at Sequoia, they led the seed round for Stripe, Airbnb, Dropbox and Nubank, and Andreessen led the first institutional rounds for Okta, Databricks and Slack, and Coatue led the seed round for Instacart and DoorDash, and Index led the seed round for Robinhood and Figma, and Lightspeed led the seed round for Snap and I think AppDynamics. And the list goes on and on.

What became obvious to me was that seed funds that claimed they had proprietary deal flow were mostly kidding themselves. They’re a little delusional. And it’s hard to believe that a seed firm that has two or three people have more coverage at early stage than a multi-stage fund that has 30 or 40 people.And then it became very apparent to me that when a multi-stage fund and a seed fund tried to compete with one another, it was very hard for a seed-stage venture capital firm to compete with a multi-stage venture capital firm. Oftentimes multi-stage venture capital firms had brand weight the seed funds can’t compete with, but more often than not it was the fact they’re willing to offer valuation terms that a seed fund couldn’t compete with. And I decided to build a seed-stage venture capital business initially aligning my interests with multi-stage funds as opposed to aligning my interest with seed funds.“

Link to excerpts from the podcast episode I found interesting.

3/ Too many aspiring founders are playing Silicon Valley status games

Edwin Chen, Surge AI, on 20VC Podcast w Harry Stebbings

SurgeAI is not talked about as much as ScaleAI (where Meta recently acquired a 49% stake, and hired its founder), but it seems like it is the better, bigger, bootstrapped version. They are at $1b revenue, all bootstrapped, and profitable, vs rival ScaleAI’s $870m rev with $1.6b funding (pre the Meta investment). They are well-regarded for their higher quality data, through better vetting and monitoring of its data labelling contractors. In the podcast, Edwin talks about his philosophy of building – smaller high quality teams aligned to customer problems, being able to work at the insane pace that your customer wants, avoiding playing Silicon Valley status games like increasing engineering headcount or fundraising for the sake of it etc. The podcast also covers how he started SurgeAI – from the personal pain, and experience of having suffered from poor quality data, and the importance of the early customers in shaping your product. SurgeAI is a textbook example of an ideal pick (of the problem space / startup idea) meeting all the three sub-criteria of a pick: why you / founder-market fit, why now / timing, and why this / large attackable market. Very rarely do you see someone who got all three right – Edwin had worked at places like Twitter, Meta and had seen the challenges of poor data and was able to build to address that, and benefited from the rise of GenAI, both timing and its emergence into a large market.

Edwin: “So I think one of the things that’s always driven me crazy about Silicon Valley is that it really is just a status game for most people. People are just raising for the sake of raising. Their goal isn’t to build some great product that solves an idea that they fundamentally believe in. Their goal really is to tell all their friends that they raised $10 million and they get a head buy on TechCrunch. I have a lot of friends who have worked at Google for 10 years. When you think about starting a company, they actually often tell me they don’t even have a problem that they want to solve. They’re kind of just bored and they want to try something new. And at the same time, they can actually definitely pay their own salaries for a couple of months. But the first thing they tell me is, yeah, they’re going to go out and raise some money. And so they might try talking to some users and they might try building an MVP. But the only reason they do that is just to check off some checkbox on a YC application. And then what happens is they will just constantly pivot around random ideas until they get something that happens to get a little bit of traction and that sounds impressive to VCs. And so they spend all their time tweeting and tweeting hot takes and networking and going to all these VC dinners. And it’s all just so they can get this highline about raising $10 million.

I really think that people’s first instinct should instead be to find some big idea that they fundamentally believe in that could change the world. And I don’t really care why they believe in it. It could be because they have a lot of experience in the space. It could be because they talk to a bunch of users. But it really has to be something that they believe in that they’d double down on for the next few years. Like if you think about startups, startups are all about big risks, right? You have to believe in somethingenough that you’re going to take a risk building it. If all you’re doing is jumping around from idea to idea every week until you land on something that gets you a thousand retweets, you’re not taking any risks. You’re just somebody looking to make a quick buck.”

Link to excerpts from the podcast episode I found interesting.

4/ Search Funds are the next big private asset class after venture capital

Will Thorndike, on the Joy of Compounding podcast with Rick Buhrman, Paul Buser

Will Thorndike wrote the book ‘The Outsiders’ which was praised by Warren Buffett as an outstanding book about CEOs who excelled at capital allocation’, and was one of the pioneers of Search Funds, where you raise a capital pool to acquire and operate a business (could even be small mom and pop stores) and reinvest those profits to buy more such businesses. Think of them as a ‘permanent vehicle for inorganic acquisitions’. This podcast has a lot of colour on these vehicles and the key personalities behind them like Stanford Professor Irv Grousbeck. I see some similarities between Search Funds today and venture capital in the ‘80s (see below). They could be the next big asset class as a large number of boomers retire in the US / West, and look to someone to sell to.

Rick: “This reminds me of a lot of the ways in which I heard private equity and venture capital being talked about 15, 20 years ago—this sort of bygone era of cottage industry and really an asset class in the midst of formation. And, I mean, if we were going to take that point of view—that search funds, in effect, are different enough to be described as a new asset class—why aren’t more investors doing it? I mean, what are the barriers to entry? Because we’ve seen the data. Most investors chase performance, and secrets get out of a new area.”

Will: I think it’s still growing. I think it’s going to continue to grow. You are seeing an evolution in the asset class, and I think it’s fair to use that term. In the last, again, 15 years, you’ve seen the rise of funds that are focused on investing in search funds. That, I think, is a very natural reaction. The reality is, getting into search funds is a hard thing to do. You have to find your way into these networks, generally around business schools, and get access through them to graduating students. The people who typically raise search funds are often right out of business school to within five years out of business school. They often come out of very specific networks in those schools. Certain professors—very specific professors—tend to teach the courses they tend to take. So it’s not easy from a standing start to just step into that flow of transactions. So investing through funds is rational for an individual investor interested in accessing search or ETA; that’s a rational thing to do. And the funds have grown.”

Link to excerpts from the podcast episode I found interesting.

5/ Good writing is about triaging badly

Alain de Botton on How I Write w David Perell

I really enjoyed this podcast episode where Alain de Botton, a hard to pigeonhole writer whose writing covers a gamut of topics from romance to philosophy, shares his views on writing. Covers topics such as his influences (Milan Kundera, Marcel Proust), to why good writing is borne of loneliness and suffering (see the passage below about Van Gogh and Irises; that gave me goosebumps), how the best writers triage badly, i.e., observe something that normal people ignore, and why (and how) he is writing 22 books at a time.

Alain de Botton: “Talk to anyone over 30, anyone over 40, definitely anyone over 50. You’re going to find evidence of these incredible scars. It’s from this that I think is born our receptivity to the arts. If you look at Van Gogh’s Irises, the man was in pieces. The man was suffering like a religious saint. He was a very unhappy man. Poor thing, he was lonely, desperate, misunderstood, he ached for love. He was just so alone. 

Vincent van Gogh, one of the most famous people of the 19th century, was absolutely abject and desperate. When he looks at flowers, he’s not just telling you about a flower. He’s telling you about a flower seen through the lens of agony. When you look at beauty through the lens of agony, it becomes something slightly different; it becomes a life raft. The guy’s not just painting a flower. He’s painting a last reason to live, and in the end, he didn’t make it. That’s what lends the kind of poignancy. Some of the most beautiful things that humans have created have been born out of a kind of negotiation with something appalling.

…

Alain de Botton: It’s almost as though there’s some kind of triage system in our minds,

which has evolved over thousands of years, of what’s important now. Our minds are very good at going, “This is what’s important now,” so I’m going to sacrifice other things. I’m not going to look at that.

This is what makes very old people or mad people or small children fascinating, but also maddening to talk to, is that they can’t keep a coherent thread. If you say to a child, “What have you been doing in the garden?” they’ll say, “I’ve been playing,” and then they’ll go, “Table.” They forget because they see something else. They can’t triage their thoughts.

Good art, a good artist, a good writer, is someone who’s borrowing from the art of triaging badly. In other words, they are triaging not according to the standard sense of what’s important, but according to a more diffuse, free-associative sense. They’re going outside the normal bounds.

You mentioned David Foster Wallace. If you said, “David Foster Wallace, go on a cruise ship, what are you noticing?” he wouldn’t go, “I’m noticing that the bar’s here.” He’s alive to other resonances that are outside the normal purview, and that’s what all writers do.

…

Alain de Botton: I wake up every morning, and I just think, right, what do I feel like writing about? I’m no longer thinking about books, weirdly. I’m thinking about pieces of prose that are around 800 words long, and I don’t care what it’s about. I just want it to feel like the thing that I most want to write that day.

I write in the early morning when I’m feeling like other people’s agendas, etc., are not really on the horizon. So I’m coming from sleep. It’s a protected personal space, and I just write what pleases me. Then I think I’ll find a place for it; I’ll find somewhere to slot it in because I’ve got about 22 books on the go now. I just think, oh, I’ll put it there, or I’ll put it there. One day it will belong somewhere. But it’s written, as it were, from the heart.

I have totally given up the old way of working whereby I’m working on a book, and that means I just need to knit the next bit of the tapestry. I’m just going by feeling. I mean, sometimes, okay, I’m slightly exaggerating. Sometimes I have a sense of, like, it would be good to try and fill this bucket of thoughts around pictures. Okay, maybe drop them in that bucket. But on the whole, I’m trying to keep things fluid and feeling very authentic.“

Link to excerpts from the podcast episode I found interesting.

6/ Good non-fiction writing is first about clarity

Tamara Winter on the Dialectic podcast w Jackson Dahl

Charming podcast episode that is a celebration of ‘taste’, which is what Tamara Winter practices in her role as Commission Editor at Stripe Press. The episode covers a lot of good writing, and writers dwelling into topics such as what makes for good non-fiction (below), on how Jackson Dahl selects podcasts guests (“if I threw a dinner party with all the previous guests, would this person be a good add?”), how the sign of a great friendship is not that you can have long deep conversations as much as whether you can sit in silence for a long time. 

Jackson: “…What actually makes for good writing?

Tamara: I’ll focus on the domain I know best: nonfiction. The best writing is first and foremost clear. To effectively communicate something, I have to know what you’re saying. This often goes wrong when people read just enough to grok a particular writer’s style and try to copy it. The writing becomes less interesting, or they use more complicated terms than necessary to explain something simple. The prose becomes overloaded because they think that’s what makes for good writing. But the best writing, especially nonfiction, is fundamentally clear.

Second, a lot of the best writers have somebody in particular in mind, so they’re not writing to the void. Sometimes that person is themselves. Brian Potter is a great example. When he’s writing, he’s answering a question that he has, and you get to come along for the ride. He’s the kind of person who will spend days reading 500 sources just to answer the question. He doesn’t sit down at a blank sheet of paper every Monday and ask, “What are we going to write about this week?” He just has these natural questions about the world.

Good writing doesn’t over-explain. Stripe has a principle: speak up to the reader. You can trust that the person you’re writing for doesn’t need you to spell out the implications of every single argument. For one, that would make the piece too long. For another, you want to assume a certain competence on the part of your reader. If they are unfamiliar with something, they will just look it up and figure it out.“

Link to excerpts from the podcast episode I found interesting.

7/ What is AGI? Here is Dan Shipper’s definition.

Dan Shipper, Every, on the Lenny Rachitsky podcast

Every is an interesting organization. They started out as a content site, but have reinvented themselves as a curious content + tools co (Lex was spun out of Every) for the AI age. Dan Shipper, cofounder of Every. The other cofounder Nathan Baschez moved out to run the spin out Lex. Good podcast on how Every uses AI, why they have an AI Operations role, his definition of AGI, and why he likes Russian literature, and recommendations.

Dan Shipper: “With ChatGPT, you ask it a question and it returns a response and that’s maybe slightly  better than a tab complete. And then now with Claude Opus 4 and Gemini and all that kind of stuff, also with deep research, it can go off and work for 20 or 30 minutes. So that leash is getting longer where you have to intervene. And I was thinking about this and it reminded me of Donald Winnicott, who was a child psychologist. He wrote this book called Playing & Reality. And his conceptualization for what it means to become an adult, what it means to go from being an infant to a child to an adult is when you’re first born, you’re effectively fused with usually your mother, your caregiver. There’s no difference between you and her or you and whoever your caregiver is.

Growing up is this process of being gradually let down in certain moments where you can handle being let down. And raising a child is about knowing when they’re ready to be let down a little bit and have to stand up on their own. So I think there’s that same leash with human development. You get longer and longer periods of time where you can be on your own. So we’re still in the 20 to 30 minutes is maybe… I don’t know, you probably can’t leave a toddler alone for 20 or 30 minutes, but it’s a little bit older than a toddler.

With a toddler, you can be in the same room but not interacting with them every single second for 20 minutes sometimes. So it’s around there. I think we have that similar leash with AGI. And so I think a good definition of AGI is when does it become economically profitable for people to run agents indefinitely? So it just never turns off. It’s a Claude Code that’s always running, it’s always doing something, you just never turn it off, and you don’t need to because you know that it’s worthwhile to keep it on. It’s never waiting for you to be like, “Okay, next thing.” It’ll always respond to you when you’re like, “Okay, next thing.” But it’s off just essentially living its life like a teenager and that is profitable for you. You’d rather have it do that than just wait for you to tell it what to do next. I think that’s a good definition of AGI.”

Articles

1/ Fun read on how Compaq beat IBM to dominate the early PC market by Gareth Edwards.

2/ A review of popular ‘white collar’ PEDs (performance-enhancing drugs) such as Vyvanse and Strattera by Park McDougald. The author’s description of his Vyvanse high and low was riveting!

3/ Arjun Ramani, who was previously a reporter in India for The Economist, and now pursuing a PhD at MIT, wrote a fun wrap of what he learnt and experienced during his three or so years reporting in India. It is called Dispatches from India. Think of it as a nerdy cheatsheet to India. It also has some fun podcast, newsletter, and book recommendations that help you decode India.

4/ Tomas Pueyo writes the Uncharted Territories newsletter (long on my mind to subscribe and I may do so soon). I really like his pieces on how history influences geography (such as this piece on Moscow’s location), and in turn how geography shapes history. If you like Jared Diamond (Guns, Germs, and Steel) and Tim Marshall (Prisoners of Geography), you will love him.

5/ Lovely little pieces with lots of wonderful pics and illustrations on urbanist Devon Zuegel’s ambitious plans to create a new walkable town from scratch.

6/ Fascinating but also infuriating read on the entrance exam for jobs in Railways in India. Two horrifying factoids: 1) “During the most recent recruitment drive there were around 90,000 positions on offer and roughly 30m people went for them.” 2) People spend more than 5 years preparing for and taking the exam (which has no set dates).