Invest in the Future You Want to See

Build your wealth, then help others build theirs.

Math is often about deep truth, simply illustrated but not easily explained. Confirming that a new business model works (diligence) is often easier than determining why it works (thesis).

Mathematicians and investors enjoy claims that are both provocative and true, established through chains of logical reasoning. Unpopular truth is the core of many investment strategies. It is better to bet on physics than markets, but better to bet on markets than fickle sentiment.

A startup should be exceptional in at least one dimension. It can’t be “pretty good” at all different things. At least one dimension needs to be 10 times better and amazing to bet on.

A founder’s diligence is harder to determine than intelligence.

There are different kinds of investors. I have the DNA of a seed investor because, as an academic, I was good at finding great students. As an executive and founder, I was good at finding engineers and other smart, talented people. I'm good at identifying smart, creative founding CEOs.

For other types of investing, you have to pay close attention and spend mental energy to a much greater extent than people think. You're watching numbers every single day, looking for the one moment where you hit the button and sell. I think that's a terrible way to live. The kind of investing I like is finding smart people and helping them level up.

Andreessen Horowitz was a great vantage point to see all of technology. There I learned very quickly about a number of different industries, seeing presentations from some of the smartest people around. With this kind of exposure, you get up to speed very quickly in sectors you may not have thought about before. You learn the problems in each industry. After you see several hundred decks, you actually have a good global understanding of where technology is. If you're operating one company, you need to have a telescopic focus on just one thing.

I’ve done well financially both from building companies and being an investor. As an investor, you do 1 percent or less of the work, get 10–20 percent of the return, but have 0 percent of the control.

Due to the constant search for new monopolies, venture capital may be more effective than antitrust at disrupting old monopolies.

Venture capital has many, many faults. But there are a couple interesting things about it. One of the biggest is VCs are very interested in whether they were wrong. If they pass on companies that become successful, they want to understand why they were wrong. They want to admit they were wrong and potentially invest in them now. They have financial incentive for discovering truth, which is uncommon.

The other interesting thing is VCs are incentivized to build people up. As an investor, you want to invest in somebody and make them richer than yourself. Peter Thiel invested $500,000 in a young Mark Zuckerberg building Facebook. Thiel earned a billion dollars on that investment, but obviously Zuckerberg earned many billions. Being incentivized to make other people richer, to build people up, is very unusual.

"Buy low, sell high" is hard because it requires the gumption to do something unpopular. Highs and lows are only obvious in retrospect. In the moment of action, there is only you breaking away from the crowd.

We all like to think we'd have put $25k into Facebook in ’04. In hindsight, we all believe we'd take the risk and get in early. Yet, another risky early opportunity is in front of you today. Now digital currency as a category removes excuses for not trying.

As jobs become more automated, investing may become the most common "job" of the twenty-first century. The 1800s was about farming, and the 1900s was about manufacturing. This transition toward everyone investing may already be quietly underway.

One of the funny things about the tech industry is if you stay in the game long enough and you take enough swings, some swings will connect much harder than you expect. There are investments I made that took five minutes that have returned more capital than five months of work. Of course, investing is still taking capital risk; it’s not like you’re getting free money for investing.

I’ve passed on many good financial investments. I’m not interested in something if it’s just about earning money. I invest on an ideological basis. I invest in the world I want to see built.

Tech's best feature? The past is past.

There is always another train leaving the station, another rocket ship blasting off.

Found it, fund it, or join it.

We’ll have to work to create the future we want.