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​Blue Oceans, Trader Joe’s, Book Editing, and Annual Letters

Welcome to the 41st edition of my, once again, quite irregular newsletter. Since the last newsletter, published over two months ago, we have had nearly 800 new subscribers sign up for this newsletter. Welcome aboard my new subscribers, and enjoy your first newsletter.

Regular readers know that this newsletter has two permanent sections:

This is a long newsletter – think of it as akin to a monthly magazine from me (only the frequency may not be monthly!). I don’t know if you can read this entire newsletter (and peruse the links) in one sitting, and even if you do a second run ( which I very much doubt), you will have to pick and choose what to focus on. A good way to read this newsletter is to certainly read my original writing(s) below, and then glance through the rest and pick 1-2-3 items that pique your interest. Anything more is a bonus!

Writings

It has been a strange kind of two months on the writing front. I have been productive (of a kind) but I haven’t been productive on what I really should be. Let me explain. As some of you know, I am writing a book on the topic of product market fit in a serialized fashion and have released two chapters (of a total of five) already, but the third chapter, which is what I am on now, has been a bit slow going. On the other hand, I have been able to quickly spin out a few (shorter) pieces: hence productive in a sort of way.

One of the shorter pieces, well, now not that short, was a piece that was derived from the work I was doing on chapter three of the PMF book; it describes how founders should think about the early product they take to market to validate the solution they have in mind. I look at startups as falling in a three by three grid; on one side is the type of product, whether it is a Painkiller, Vitamin or something called a Toothpick in between, and on the other side is the market type, whether it is a competitive Red Ocean market, a less competitive Orange Ocean market, or a non competitive Blue Ocean market. Basis where a startup falls on that grid, they can determine how detailed a product they should build.

If you are a Painkiller in a Blue Ocean market, you can get away with a very basic product; but if it is a Vitamin in a Red Ocean, you will need to build a product that matches if not surpasses competition. In between cells need products that fall somewhere in the middle of the product depth continuum. So it is thus a framework around what kind of product to build. This ended up becoming a 6,000+ word piece.

Which of these 9 Product x Market Type Categories is your Startup in?

Continuing on this topic, I was able to get two PMF Convos done over the last couple of months; one with Shashank Mehta, the founder of The Whole Truth, and the second with Chirag Taneja of GoKwik. I thought they were really good. The newer convos are structured along the broad skeletal structure of the book – Pick, PPF (Product to Problem Fit), and MMF (Motion to Market Fit), and benefit from this structure.

PMF Convo #22 – Chirag Taneja, GoKwik

and

PMF Convo #21 – Shashank Mehta, The Whole Truth

The shorter pieces included one on what I saw as the state of podcasting and my reflections on podcast consumption circa early 2026. This one got some play because Tyler Cowen linked to it in his daily reads and it got a fair bit of traction.

Reflections of a Podcast Power User | January 2026

The other two were shorter year end wrap up pieces that I put together; one for The Generalist and the other one for Blume, both below.

Natural Stupidity, VCs Going Global, and Super-Young Founders (for Blume)

Agent-Powered Interactions, Second-Order Effects, and the Future of Work (for Generalist)

I have been telling myself that I need to hunker down and get going on the last section of chapter three, so that is what I will get to after this newsletter:)

Readings

Books

2026 is off to a decent start on the book reading front, especially on my goal of reading more fiction this year.

First up are the fiction reads.

1/ Everything’s Fine – Cecilia Rabess

Romance novel, of a kind. Entertaining, but also a little uncomfortable. A WASP finance guy of conservative leanings and a black progressive finance girl turned ‘journalist’ fall in love, and struggle to stay in love, in the background of Trump’s rise to power. If this was adapted to India, it would be the story of an upper caste Hindu finance boy who is pro Modi / BJP and a muslim journalist girl, in the background of Modi’s rise to power.

2/ Flesh – David Szalay

Powerful staccato prose depicting the life of a Hungarian man, from his teenage affair with an older woman, to his emigration to England, his rise led by his getting married to a rich (older?) woman, and his eventual downfall. This won the Booker Prize for ’25. Hence picked it up from the airport, and ended up reading it cover to cover in a few hours. The book enables speedreading, given the lean prose (Hemingwayesque, in a way) and rapid pacing. Very little interiority or prose describing his mental state or so. A lot of short passages that push the pace ahead. Also from the prose and the structure of the novel, it was hard to develop a liking for the character. I don’t think this is something that will make my Desert Island list:) That said it did leave an impression, of a kind.

Now the non-fiction pieces.

3/ Make Time – Jake Knapp & John Zeratsky

Good book on being able to use the limited time in our days to get more done; by the creators of the Google Design Sprint. They recommend that we focus our days around 1 ‘highlight’, a task that takes 60-90mins to do, and is something that is urgent, or gives you satisfaction, or joy, or all three. To ensure you are able to focus on your highlight, they give you a set of tactics to ‘laser’-focus on getting your highlight, to ‘energize’ yourself so you can stay locked-in on getting to the highlight, and finally ‘reflect’ at the end of the day on whether you got to the highlight successfully, and whether you laser / energize tactics worked, and if you need to add more such tactics. These 4 – highlight, laser, energize, reflect – constitute their time management or ‘make time’ system. So long as you are able to get the highlight done (it could be work or personal), and are able to string a series of highlights (if needed) to progress towards a long-term goal, and / or eventually make it a habit that you do automatically (like exercise), you should be satisfied. This is a practical and easily actionable time management book; and one that doesn’t put out unrealistic practices or a regimen that is tough to adhere to.

4/ Another Way – Dave Whorton with Bo Burlingham

Another Way is part autobiography and part story of a pivot by Dave Wharton, a tech VC who worked with KPCB at Kleiner Perkins and TPG Ventures, and then set up his own fund called Tugboat Ventures. Along the way, he had an epiphany around how the venture model he was practicing was akin to a slash and burn model, forcing companies to get big fast, engorged on capital, and eventually forcing the funded to list or exit when they were not ready to. He saw the merits of a slower-growing business that could stay private for as long as possible, without taking external capital, with its growth financed from its earnings. He calls these Evergreen companies, and the latter half of the book is a celebration of these Evergreen companies.

This pivot is captured in the book, along with his philosophy around Evergreen companies and various frameworks that he brings in such as the seven Ps, the nine innovation rules, etc. What I found really interesting in the book, given my interest in venture history, was his account of his KPCB days including how he was wooed by John Doerr, how he worked very closely with him, the stories of the late nineties dot com madness, including how he played his role in making Google happen for KPCB. That is only one chapter though. Overall, I thought it was an interesting read in parts; though for venture nerds I suppose the first section of the book is what is particularly interesting.

5/ Brick by Brick – Manish Vij

This is founder-turned-investor Manish Vij’s autobiography. Found it particularly interesting to read the chapter describing how his startup Letsbuy got early traction, and grew fast though unsustainedly, and looked it was on the verge of something big, but then got sold to Flipkart. He gives us a glimpse of what really happened, including the shenanigans that VCs played. That was really the highlight of the book to me, at least, given my interest in venture history. Overall, it is an easy, fun read, with Manish capturing his evolution as an operator and founder, his early attempts at entrepreneurship and failures, his success as a media entrepreneur, and then eventually finding his footing as an early-stage investor + venture builder in the Indian startup ecosystem with Smile Group, which is akin to a Sutter Hill for consumer digital businesses for India.

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Podcasts

1/ Michael Lewis, on Acquired w Ben Gilbert & David Rosenthal

Link to the episode. Link to excerpts from the episode I found interesting.

Acquired zigs where others zag. Its signature podcasts, where they dive deep into the history and evolution of an iconic company, are long (3+ hrs), infrequent (just 6 episodes in 2025), and feature the two hosts talking to each other excitedly about a company. Their passion, and curiosity for the topic, along with clearly compelling content, has created a popular yet cult-y podcast brand. In this episode, celebrating a decade of Acquired, the hosts are interviewed by Michael Lewis. Interesting episode, and one that podcast aficionados, and podcast hosts will particularly enjoy (The segments scattered across the episode on how they prepare for the episode, and then how an episode comes together was of course fascinating!).

They describe how the podcast evolved, from more frequent shorter episodes covering tech M&As (hence the name Acquired) to the longer, less frequent company deep dives. Their strategy came together organically as they saw what was working, and learnt from the companies they were studying. In general, they learnt the power of durability and compounding across the companies they studied. Specifically, NFL and Hermes taught them the power of scarcity, and Berkshire taught them to focus on their circle of competence and ignore the ‘too hard’ pile (leading them to avoid outreaches from Hollywood). Interesting line on them becoming aware that they were better off ignoring any potential distractions and instead just focusing on the core product. “The opportunity cost is so high of spending a month not making an Acquired episode…The answer almost always is we should just make another episode.”

A couple of points made in the episode that surprised me was how much of an improvisational element there is in the recording – both do their own analysis of the company, and agree on a broad structure with each other, but do not share their findings with each other. The other was around how they select their sponsors (typically B2B Enterprise SaaS or AI companies), and also try to invest into them. Overall worth a listen (or read), especially if you are into Acquired and / or podcasts in general.

Ben: They go hand in hand. Cheap growth is covering the current thing. I’ve been toying with this idea of stored potential energy that great businesses have a stored potential energy that you can’t see in the current financials.

Michael: Great people have that too. They have these reserves that come out when they need them.

Ben: And they’re not presented in the obvious markers.

Michael: Yes. They aren’t sparkling there in front of your eyes anyway.

Ben: I think we’re trying to store up as much potential energy in Acquired as we can rather than anytime there’s a way to make it show up on the financial statements, like letting out the pressure and being like, yup, second show, yup, more ads, yup, dynamic ads from an ad network. You can say yes to all these things and you can sugar high the current profits, or you can try to figure out how to store up as much potential energy as you can. I think once you hit the point in life where money won’t make you any happier, then there’s actually not a point to letting any of that potential energy out. It just creates goodwill for everyone, most principally, selfishly yourself to keep it bottled.

2/ Jimmy Soni on Infinite Loops w Jim O’Shaughnessy

Link to the episode. Link to an AI summary of the podcast that I prompted.

Really interesting episode on book publishing featuring Jimmy Soni in convo w James O’Shaughnessy. Broadly, legacy publishing (by the likes of Penguin, Harper Collins) reflects the analog era – oriented towards distribution in bookstores, led by historical structural incentives and forcing functions (awards, reviews etc). Leads to a few interesting challenges

Asks authors to become ‘problem authors’ pushing for data, A/B testing on books (interesting anecdote by Jimmy Soni of how A/B testing covers led to a cover that the test group loved but the editors hated), and pushing to write the story they cant shake of, not what the publishers want them to write.

3/ Everett Randle, Benchmark, on 20VC w Harry Stebbings

Link to the episode. Link to excerpts from the episode I found interesting.

I first came across Everett Randle through an article he wrote on Tiger Capital called Playing Different Games. He struck me as a differentiated thinker. Not surprising that he was at Founders Fund, though he left that soon for Kleiner Perkins, and recently joined Benchmark.

This was his first podcast appearance on joining Benchmark; clearly an interesting interview. It became a bit controversial because of one particular soundbite of Everett on how large mega-funds like GC and Lightspeed, are chasing investment velocity. I don’t think he was wrong, but it did get some traction on Twitter.

What I actually found more interesting, though, were the broader ideas in the podcast. A couple of points really stood out for me.

One was around AI and how we should think about it differently from SaaS. In SaaS, high margins tend to be desirable, whereas AI is structurally lower margin; that’s a feature, not a bug. Just like cloud businesses, which account for a large share of spend from customers (vs SaaS) and have a lower margin profile than classic SaaS. AI companies will likely look similar to Cloud in that they’ll accrue larger absolute revenue from customers, but with lower margins. That’s just the nature of the model. The takeaway for me was that we should stop forcing SaaS metaphors, frameworks, and metrics onto AI companies.

The other part I really enjoyed was his perspective on Founders Fund. He was only there for about two years, but clearly it left a strong imprint. One point that stood out was how he described Peter Thiel’s use of incentives and mechanisms to test your conviction e.g., encouraging people at the firm to invest as much of their own money into the company as possible, even enabling access to credit lines to do so. I found that fascinating. It’s a real conviction test: if you’re not willing to go all in yourself, why should your LPs take exposure? In that sense, it’s a very pure test of skin in the game.

All in all, a genuinely interesting episode—and well worth a listen. Venture nerds would love it.

Everett: With someone like Peter Thiel, Peter, I think so much of his cleverness and so much of his genius is actually in the way that he builds his firms, than his investments. So the way that he’s designed Founders Fund is that he creates all these incentive structures and mechanisms almost to constantly be testing your conviction. So there’s a program, for example, at Founders Fund where anyone that works on an investment, or if you’re leading an investment, you can personally invest alongside the firm in that investment, almost as if you’re angel investing.

And at first glance, it just looks like this amazing perk that you can have by being an investor at Founders Fund. But deeper down, it’s a conviction test. Because if you’re sponsoring some pro rata of a company that’s like doing okay, but not great, but the founder really wants you to do the pro rata to not blow up the round, but you’re not doing some of your portion of the individual side of that investment and your angel investment, Peter can go to you and say, do you not think this is better than having your money in the S&P? Why would we give our LPs this allocation in this round if you don’t even want to put your own money in this round? So there’s like 100 different things like that that exist in Founders Fund that aren’t explicit.

Harry Stebbings: I would hate for people to be scared and then say no to something because they didn’t have the cash that could be great. What do you think?

Everett: It’s super valid. I think, again, if you’re at Founders Fund, you’re full in and you’re all in. And so I think most of us that were young at Founders Fund at the time all had like debtlines, like unsecured debtlines that we were using to do these side kind of personal investments. And by the way, it’s turned out to be an unbelievable portfolio for myself personally, and it’s all worked out. And so I’m very glad that I had it. But I think that’s part of, you know, he throughout his entire career has really, again, designed his organization. So people are all in. He had like a bonus system for PayPal employees. If they lived within like a couple miles of the office, you’d give them more money. Like he just designs the orgs this way.

4/ Patrick O’Shaughnessy on The David Senra podcast

Link to the episode. Link to excerpts from the episode I found interesting.

This is a long podcast episode (at just over 2 hrs) featuring two elite podcast hosts David Senra and Patrick O’Shaughnessy in conversation. This episode is on David’s show, and David interviews Patrick who has been a key mentor to him. Patrick promoted David when he was yet to truly break out, and gave David the opportunity to bring his podcast, Founders, to the Colossus Network, where it has been ever since.

For those who already listen to them and are fans, this episode will be fun. For those who are not that familiar with them, it will still be interesting, but not as much fun. That’s because the takeaways, as such, are limited and are broadly around Patrick’s attitudes to talent and how he backs and supports people.

The most interesting part for me was the passage where Patrick talks about how goals are not as important to him as life principles. Patrick wrote an essay a while back called Growth Without Goals, where he argues that once you have goals, they become self-limiting, and once you achieve them, you are left with a new challenge of what next. Instead, he finds that having a principle, something you can structure your life around and live by, is far better.

Patrick references a talk by Bret Victor called Inventing on Principle. In that talk, Bret Victor says his core principle is to reduce feedback time to creation, and everything in his (Bret Victor’s) life has revolved around that. Patrick says that, very similarly, his own key principle is to identify interesting talent well before they become widely known, and then promote them and help make them famous. He does this not necessarily out of deep commercial interest; sometimes there is no immediate commercial interest at all. He does it because he genuinely loves doing it. That, to me, was really the core takeaway, or the essence, of the podcast. There is a bunch of other stuff as well, which I have excerpted below as well that I found interesting, but the above was the heart of it for me.

5/ Saam Motamedi, Greylock on Uncapped podcast w Jack Altman

Link to the episode. Link to excerpts from the episode I found interesting.

This podcast episode is like inside baseball for venture nerds. Saam Motamedi, a partner at Greylock, one of the oldest venture firms and possibly the first institutional fund, gives us a peep into the firm. There’s a great anecdote about how met with some of their emeritus partners, folks now in their 80s and 90s who were part of Greylock back in the 60s and 70s, and how they used to source deals then. One tactic: buying local newspapers across cities and scanning the classifieds for job postings, on the theory that aggressive hiring was a signal of a company growing fast. Greylock, in that sense, really is a storied old firm—one of the first institutional VC firms, not a family office.

In the episode, Sam also gets into how they actually work today. One concept I found particularly interesting was how they think about attribution for the success of a deal. They use a concept called causal impact, it could be someone who sourced, and / or someone who helped drive conviction internally, or who played a role in recruiting a key senior engineer and materially accelerated the company in some way.

He also talks about how performance is evaluated internally: ~18 criteria across five buckets, which gives you a sense of how structured (and multidimensional) their feedback systems are. On investing philosophy, he notes they’re open to taking execution risk but are very wary of market risk, and that a lot of their investing now happens at the incubation or inception stage. They do relatively little in the way of “pure” Series A investing backing fast-growing startups.

The last bit I really liked was his idea of planning for serendipity – a bit of an oxymoron, but a useful one. He intentionally makes sure he attends at least one event a week, because as you get more senior, your time gets pulled in many directions he says and you lose those chance run-ins that were critical to sourcing and network-building earlier in your career.

Overall, an interesting episode though probably most useful if you’re already deep in venture.

Saam: Actually, one thing that I’ve learned from Asheem (Chandna)… I actually think a number of people who’ve had longevity in venture do this, is making sure you have a lot of unscheduled time on your calendar. I try to keep one day a week completely unscheduled, and then I try to keep my mornings unscheduled until, like, eleven. Because once you have a portfolio and a team, at some point in the day, your day becomes entirely reactive. And so you have to be incredibly intentional about scheduling time to do long-term thinking, long-term work, and also to give yourself the energy to sprint. Because I think this job, a lot of being good at this job, in my opinion, is very quickly being able to detect when you need to go a hundred ten miles an hour. Yeah. And then getting to a hundred and ten miles an hour really fast. And if you do that every single day, you’re not truly at a hundred ten miles an hour.

It’s also really keeping the open day or the open mornings is so hard because there’s always, like, the, hey. I’m in town for these three days. Are you free? It’s like, well, yeah, I am. Yeah. But that was supposed to be a quiet time. A hundred percent. Yeah. And that, like, if you ask me, what have I gotten better at over the last nine years? Because in many ways, there are many more pulls on my time today than there were nine years ago. I think one of the things I’m unhappy with is I do think there’s a little bit less of it, and I worry about that. Because when I think about some of the early relationships I built, they really were so random in how they were built.

Right? Like, a good example is this week is AWS re:Invent. It’s my first year missing it because I have three boards this week. But there’s so many random events I went to at re:Invent where I met someone that four years later ended up being someone who we hired into the portfolio. I think I have less serendipity surface area today than I had in the past, but I try to very intentionally do things every week, every month to maintain some serendipity.

One is I try to go to at least an event every week. And then I also try to make sure I meet some founders every month who are completely out of network. And I don’t get caught in the like, oh, well, I have a good network now, and I’m just gonna meet people through very strong referrals, because then you become really insular. I think insularity is the death of this business. You have to maintain a beginner’s mind and keep the serendipity, as painful as it is to go to an event in San Francisco. I always meet founders, especially new founders, in person and disproportionately they’re in San Francisco. But I will say that there’s a little bit of, like, having a clear mind that is very useful because you could spend your entire day meeting founders. Of course. And you could feel good and go home and be like, I met twelve new companies today.

But the real question is, like, were you awake in the meetings? I mean, for me, when I finish a week where I just had, like, a zillion meetings all week, I don’t think that I come out of that week feeling like I crushed it. Like, I feel scrambled. And, you know, I think about, like, the last eighteen months, I’ve made four new investments that I’m really excited about. How many net new opportunities do you think I met in that eighteen-month period? I don’t know. I would suspect it’s on average three a week. I mean, if I compare that to myself three years ago, I was probably meeting twenty opportunities a week. Now, are there some opportunities I didn’t meet that I should have?

Almost for sure. Right? But, again, the question is, like, how do each of us equip ourselves to make a couple of really high quality investments every year? I like being in the city and then also being in our Menlo Park office and having more clarity around like, okay. It’s just quieter and you can think more. Yeah. And it’s like, who are the people who are gonna start companies in twenty-twenty-six? Yeah. That I should go make sure I build relationships with today? There have been a bunch of these, like, Charlie Munger clips going around recently. Obviously, it’s not the same thing as venture, but I do think a lot of what he says, like, you can probably apply some percentage of it where it’s like, you shouldn’t be chasing everything, there’s very few things that matter. Like, you should be thinking and studying a lot, not, like, talking all the time.

6/ Trader Joe’s on Acquired podcast w Ben Gilbert & David Rosenthal

Link to the episode. Link to excerpts from the episode I found interesting.

I’m a big strategy buff and find that topic endlessly interesting. My working definition of strategy, adapted from Roger Martin’s, is that strategy is a set of interconnected choices and intentional trade-offs that reinforce each other to give you a competitive advantage in the marketplace.

There’s no better exemplars of good strategy than Costco and Trader Joe’s. Both operate in retail, a low-margin business littered with corpses of companies that couldn’t get it right. Both are beloved brands. And both now have an Acquired episode on them. Acquired’s episode on Costco was one of my favorites. Now they’ve outdone themselves with this episode on Trader Joe’s, which might just be my favorite podcast episode of 2025. There’s so much to learn here, and honestly, so much to enjoy.

The hosts, David and Gilbert, take us through the history of Trader Joe’s from its origins as Pronto Supermarkets to its reinvention as Trader Joe’s, and then the sale to Theo Albrecht (owner of Aldi Nord), the founder Joe Coulombe’s exit, and eventually the transition to professional management. Through the journey we get a deep look at Trader Joe’s and the strategic choices they adopted, and executed on.

The founder, Joe Coulombe, is a fascinating character. In many ways, he comes across a sociologist or anthropologist who deeply understood U.S. consumer society, how it was changing, and structured Trader Joe’s to benefit from these waves of change. They describe how he came across two articles that influenced him. One in Scientific American about how the GI Bill led to many more Americans going to college, and another in the Wall Street Journal about the launch of Boeing’s 767 that would dramatically reduce the cost of travel to Europe. He saw a future with more college-educated, well-traveled Americans who wanted something different from the mainstream. Trader Joe’s was built for this “overeducated and underpaid American,” as he calls them, which is why early Trader Joe’s stores were often near college campuses.

There’s a lot to learn from how strategically Joe Coulombe thought about things. For example, the early focus on liquor at Pronto gave them an advantage that other grocery stores couldn’t easily replicate. There’s also their very disciplined approach to product selection. They have four rules around this. Products should be high value per cubic inch, have a high rate of consumption, be easy to handle logistically, and be something where Trader Joe’s can be outstanding on price or assortment, but ideally, both i.e., hard to find elsewhere, and is at an extremely attractive price.

They describe three phases of Trader Joe’s. The first is “Good Time Charlie,” from its origins to the early 1970s, with a strong focus on wine. From 1971 to 1977 is “Whole Earth Harry,” which emphasized health food. The final phase is “Mack the Knife” which is about reinventing Trader Joe’s for the tougher era of deregulation, with a strong focus on managing costs, essentially the Trader Joe’s we recognize today.

What I found particularly interesting, especially from a strategy lens, is the set of interconnected choices and intentional trade-offs that reinforce each other. For Trader Joe’s, this starts with a very low SKU count. This is around 4k today (In comparison, Walmart neighbourhood market stores are ~25k SKUs, and supercentres are 100k+) and, but in Joe Coulombe’s time, it was as low as ~1.5k. This allows huge depth in the limited SKUs they carry and the ability to negotiate hard with vendors. Importantly, they don’t abuse this dominance. They use it to get a great price and pass it on to customers. Margins aren’t as low as Costco’s, but they pay vendors on time, in fact on delivery, per the hosts, which delights vendors and makes them want to work with Trader Joe’s. In return, vendors often give them some of their best and most interesting products.

Another choice is their comfort with discontinuities. They’re fine carrying products that may not repeat consistently, odd-sized eggs, one-time imports, and so on. Unlike large retailers like Walmart that are built around continuity and massive SKU counts, Trader Joe’s is perfectly happy with customers discovering that something they bought earlier is no longer available.

Then there’s their approach to staff. They pay really well, typically 60% over market rates. This leads to enthusiastic staff and much lower turnover, which in turn reduces the need for constant training and creates a very different in-store experience. Their private label strategy is also extremely clever. They source innovative products, often with the help of strong vendor relationships, and combine this with distinctive branding and marketing. These different choices and tradeoffs reinforce each, and come together to create a tight biz model, one that has led to a beloved brand (something like In-n-Out Burger).

Overall, this is a fascinating episode with lots of great trivia. I really enjoyed this. I am a retail buff, and a strategy buff, and both these strands came together to make this a fascinating episode for me!

Ben: Amazing story of someone coming to visit Trader Joe’s saying, “Hey, I have a whole bunch of extra large eggs that I just can’t sell to the supermarket chains. Can you help me out?”

David: They only want large eggs.

Ben: Yeah. And Joe says, “Sure, what’s going on with them?” And he says, “Well, they only want large eggs. I’ll sell you these extra large eggs that are at least 12% bigger but for a lower price because I can’t seem to unload them.” And he’s like, “Why the deal?” And the supplier says, “Well, the large supermarket chains only want continuous items. And I’m actually not sure I can regularly produce enough of these extra large eggs.” The kind of disturbing part about this is it’s because it’s at the end of the chicken’s life that they produce these extra large eggs. So it’s kind of the last eggs they’ll lay. And unless I can promise a certain volume and certainty that I’ll be able to supply, there’s not a market for it.

David: The big supermarket industry just isn’t interested.

Ben: Trader Joe’s is like, “We’ve got the perfect consumer for you. They’re value conscious. Our message to them is sometimes we’ll have stuff, sometimes we won’t.” And so if you just want to sell those to me, I’m sure I can unload them on our customers; they’re going to love the deal. And then it’s actually not a big deal for me when I run out, because that’s not a part of our value proposition the way it is for the big supermarkets. So this begins what Joe calls intensive buying. If we have line of sight on something that we can uniquely sell, that we’re going to get a great deal on, that we know our customers are going to love, we should do all we can to go and suck up all the supply of that thing so we can get the lowest per unit price for our customers.

*

Ben: That’s amazing. And so he really comes up with this thing he calls the Four Tests, which is: one, we want to stock goods that are high value per cubic inch.

David: Yes, and it starts, of course, with liquor, as we talked about.

Ben: Yes, and then, of course, vitamins. And you walk into a Trader Joe’s today, you can almost feel that it’s stocked with things that are high value density, even though the goods aren’t expensive. The way it’s all jammed into the store, it feels dense.

David: Yes. And Trader Joe’s today average about, call it, 15,000-ish, maybe a little less, square feet per store. The average supermarket is like 50,000 square feet, and the average Walmart is like 150,000 square feet.

Ben: And back then, Trader Joe’s was like 4,000 square feet. I mean, these were tiny stores, so they needed high value density in them.

David: Or, I’m going to come back to that in a minute. He wanted them to be 4,000 square feet.

Ben: Two: high rate of consumption. You want customers coming back over and over again.

David: Vitamins.

Ben: Three: goods that are easily handled. So much of Trader Joe’s business stems out of this that they are unwilling to start doing things that are hard to handle, that are logistically difficult. And they kind of have this ethos of, if we can make it so people are willing to overlook the fact that we don’t have some stuff that’s hard to handle, then great. All the better business for us if we can keep customers coming back and we only have to deal with easily handleable goods. And then the fourth is probably the most important: something that Trader Joe’s can be outstanding in terms of price or assortment.

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7/ Wes Kao on the Lenny Podcast w Lenny Rachitsky

Link to the episode. Link to excerpts from the episode I found interesting.

Wes Kao calls out some genuinely useful communication principles in this podcast with Lenny. I personally found the discussion on signposting interesting, especially her explicit endorsement of it. I remember having read earlier (and I’m struggling to recall where) that signposting was something to be avoided. So this was actually reassuring.

Beyond that, the “sales, then logistics” idea stood out: fundamentally, set context first before you slip into persuasion mode. And the one she calls the single most important principle in communication. Another useful principle was what she calls MOO or Most Obvious Objection. Anticipate the biggest or most obvious criticism to your proposal and prep for how to handle it. She comes back to this principle towards the end, that a lot of good communication advice boils down to spending a bit more time upfront to create clarity, which then saves time later. Overall, a useful episode with some solid frameworks, relevant for both the written or spoken word contexts.

Lenny Rachitsky: Sales, then logistics. What is that about?

Wes Kao: Yes. So a common mistake that I see is overestimating the amount of buy-in that you have from your audience. So that looks like jumping straight into talking about the logistics, the details of the how to do something, of the process. When in reality your audience has not yet decided if they even want to do the thing. So what I see operators do in response then is go even deeper into the logistics and the how, thinking that, “Oh, if I just explain this more than that person will want to do it.” When really a sales note is different than a logistics note. A sales note is meant to get people excited to do the thing you want them to do, and to agree to do it. And only then after they have bought in, does it make sense to share the logistics. So there’s an order of operations here.

Wes Kao: You can frame a conversation and sell a bit at the beginning very concisely. So I’m not talking about spending 15 minutes out of a 30 minute meeting selling, I’m talking about one to two minutes, even a couple sentences, and then transitioning into the main thing you want to talk about. So I’m a huge proponent of doing that and basically reminding people, why are we doing this? Why are we here today? Why does this matter? And then getting into the meat.

Wes Kao: Explaining why we’re doing this, why this benefits the business, what problem this is solving. Again, you can do a lot of this in a couple of sentences. And then I also like asking or stating what I need from the other person upfront. So saying, “Hey, we’re here today because two weeks ago we were reviewing the product flow and realized that there were a couple of parts that were kind of confusing. So I took a stab at fixing those areas, rewriting the microcopy, and I want to present them to you today, see if you agree with these changes, and then we’re going to roll them out. What I’m looking for from you is feedback on the changes and if you agree.” So like that was like 15 seconds, right? Super fast. And then now we’re all on the same page about why we’re here. And you can listen more intently knowing that I’m looking for a certain kind of feedback.

8/ Avnish Anand, Arindam Paul, Nikhil Vora, Rishabh Mariwala on Singularity One podcast

Link to the episode. Link to excerpts from the episode I found interesting.

Thought this was an interesting episode. A consumer operator turned investor (Avnish Anand), an operator (Arindam Paul) and two investors (Rishabh Mariwala, and Nikhil Vora) come together to discuss themes around consumer brands and the changing Indian consumer. Long episode, so I did an AI summary which I thought came out quite well; excerpts I found interesting from the same linked here.

Lots of interesting takeaways but what stood out to me was the a) low brand loyalty but high brand awareness contradiction that India is in right now, and b) how distribution concentration led by limited number of online platforms that are growing in share and power, both benefits brands in improving efficiency, but eventually also constraining EBITDA as the online retailers gain power.

Low brand loyalty, high brand awareness

Nikhil Vora: “On a macro landscape, brand loyalty is at an all-time low, brand awareness is at an all-time high, which is a great case for disruption to happen in almost every category….Let’s say if we for a year out here, and let’s assume that we’ve all been Kingfisher drinkers, I can almost guarantee that my daughter, if she drinks, when she drinks, I hope she doesn’t, she’ll not be a Kingfisher drinker, she’ll have moved to something else.”

*

What distribution concentration gives in efficiency, it will take away in EBITDA

(not sure who said it): “I don’t need to be 40% of Marico’s distribution to challenge Marico anymore. I need to be present in 15 distribution channels. So if I’ve cracked Zepto, Blinkit, Insta, Amazon, Flipkart, Reliance, Demart and so on, I’ve got 25% of my TG market in here.”

Arindam: “So whether it takes 5 years, 10 years, 15 years, 20 years, the moment 40, 45% of distribution is controlled by 10, 12 players, the profit pool that the retailers will have will increase compared to the profit pool that brands would have. … This has already happened in US. This has happened in China.”

9/ Rachel Lockett, Executive Coach, on the Lenny Rachitsky Podcast

Link to podcast. Link to excerpts from the podcast I found interesting.

Educative podcast, where Rachel Lockett, an executive coach shares powerful coaching and communication frameworks, including what she calls the two foundational coaching skills of active listening (across three levels, in the most advanced you go beyond words to understand body language and context), asking powerful questions (delivered via the GROW model: clarify the goal, examine current reality, explore options, and define the way forward). Her core argument is that leaders often advise where they should coach instead, and they miss out on the ability for the coachees to develop themselves. She rounds with a very powerful communication framework called Non-Violent Communication which is a framework used for conflict situations and resolving them. Here she suggests you should state observations, express feelings, articulate needs, and make a request. I thought this was an illuminating episode.

Rachel Lockett: I’ve also witnessed people who are still inspired and continually energetic and seem to have some secret well of some diesel battery, or I guess I should say a Tesla battery that helps them through really hard challenges, and they’re still having a good time. And so what I make of that is that when people are in their gifts and their strengths firmly, most of the time, they have more energy. We all have more energy when we’re operating from the things we naturally are good at and the things we innately love doing. So I try to help my leaders see that they can design their lives so they’re spending 80% of their time in their gifts. That seems really ambitious because you’re stuck within a context that requires a lot of you. Especially when you’re executive at a huge company.

…

Rachel Lockett: So one tool I like to give is for people to actually take two weeks and every night reflect on, what are the five things today that gave me the most energy? And what are the five things that depleted my energy the most? If you do that for two weeks and you look at patterns, you can tell, what are the natural gifts that I’m living in? And what are the things that I’m stuck doing that are exhausting?

10/ Pat Grady & Alfred Lin, Sequoia on Uncapped Pod w Jack Altman

Link to podcast. Link to excerpts from the podcast I found interesting.

Enjoyed this podcast episode, which was the first one Pat Grady and Alfred Lin did on becoming Stewards at Sequoia. Extremely interesting podcast for anyone in venture investing. I found the stats they shared on coverage and loss ratios interesting – it is not often that you get to see such data. The most interesting part to me was the discussion around how polarising voting records are likely better signals for investing than all negative or positive votes (likely because these polarising voting decisions led to more dramatic outcomes), the importance of the mid-funnel decisions (that is, what leads to a certain company being taken to the Investment Committee meeting, or not), and finally the 40 psychological traps they have identified as impeding good decision making.

We do a lot of introspection, post-mortems, post-parades on decisions that we got right or wrong. Just kind of looking at the outlier decisions one way or the other and saying, like, we’ve got this one really wrong. Why we got this one really right? Why what’s interesting about the ones that we get really wrong. Every single one of them, if you play the five wise game, like why, why, why, why, why every single one of them comes down to some psychological bias or emotional trap. Totally. None of them come down to an error in calculations.

Yeah. All of them come down to these background effects that were clouding your judgment. Yeah. And you know, we cataloged them, you know, we have a list of 40 of these things so that we can kind of like use the common vernacular and be able to be able to kind of get in front of them so that we can have a conversation before we make that mistake. Like, Hey, do you have separation of church and state here? What separation of church and state? Well, letting the thrill of the chase bleed over into your clinical decision-making. Yeah. Right. The thrill of the chase is a very passionate, emotional thing where you’re falling in love with the founder, but then you have to come back and put your emotions aside and clinically assess all the merits and risks and make a good decision. And so it’s pretty natural to co-mingle those two things, but that can lead you down the wrong path.

*

We realized a long time ago that the most important decision is actually not the final decision that happens on a Monday. The most important decision is the mid-funnel decision that determines what gets to a Monday. By the time it gets to a Monday, we’re pretty good at making the decision. Our biggest misses are the things that don’t even make it to a Monday. Because you looked, but you didn’t spend real time on something that deserved it. And so having better hygiene around those mid-funnel decisions, we used to just go back to back, meeting to meeting to meeting to meeting to meeting. Now, you can’t have a meeting if you don’t save time afterwards for a debrief so that we can have a concrete conversation about what did everybody think about this meeting? What are the pros and cons? What’s the thesis? Where do we go from here?

Other podcasts I enjoyed

Ikea – Acquired podcast

Link to episode. Self-recommending as Tyler Cowen puts it..

Founders podcast: Andre Agassi’s autobiography ‘Open’

Link to episode. As I tweeted about the episode: “Really powerful. One of the hardest episodes of Founders. Goes hard hard hard. About overcoming the ghosts in your mind. Interesting analogy between founders (esp solo founders) and tennis players around loneliness. Haven’t read the book, and makes me badly want to read it.”

Articles

1/ The Book on Publishing – Keith Gesson, Vanity Fair

Link to the piece.

A tweet by Christina Cacioppo, the founder of Vanta, led me to a page on her website where she lists her favourite books on Venture Capital (she worked at USV once). One of the books there was How a Book is Born. Strictly speaking, the book is about publishing. Christina argues that book publishing is analogous to the venture industry. Just as VCs hunt for the next hot startup, book publishers are hunting for the next big bestseller. Intrigued, I dug further to find that the book was a more elaborate version of a Vanity Fair article by the same author.

I downloaded the article, and it turns out to be about the pursuit by publishers of a book called The Art of Fielding, which became a big hit when it was released. The article is an enjoyable short read giving a glimpse of the process that goes into publishing a book, especially how a hot buzzy book is competed for by publishers. Here, I found the role of (book) agents in publishing particularly interesting. There is no perfect equivalent for them in our world; I suppose there are bankers in our industry, but they are actually looked down upon. Perhaps the right equivalent could be angel investors. So, angel investors in venture / startupland perhaps equal agents in publishing. I found it fascinating as to how agents actually have a particular editor in mind; they know that within a particular publishing house, there is this editor who will like this novel which is about baseball, similar to how an angel thinks this VC at this fund house will like this startup + founder. Overall a great read offering a fascinating glimpse into the publishing industry and its dynamics set around the bidding for a hot book, a la how a deal in startupland can be fought over.

2/ Robert Gottlieb, The Art of Editing No. 1 – interviewed by Larissa MacFarquhar, The Paris Review

Link to the piece. Link to excerpts from the piece I found interesting.

Another tweet, this I think by Eugene Wei (though I can’t locate it), led me to this piece. Robert Gottlieb and the authors he edits are interviewed for the Paris Review. Gottlieb, of course, is the well known editor of Robert Caro and many others; most famously captured in the documentary Turn Every Page, which portrays his relationship with Caro. This article covers how Gottlieb looks at editing, as well as how the authors he edits discuss his role. There are some similarities here between how the editor is akin to the VC and the writer to the founder (sorry if you think I am finding similarities where none are, amongst the book publishing industry and venture).

Lots of interesting stuff in this piece, such as how the title and the structure of the book can increase readability or suspense (see below), how he and Robert Caro fought over colons and semicolons, how much authors look up to the editor for approval, and so on. Most interesting to me was that the editor (or at least Gottlieb) really reads the book only after the writer completes it fully; this feels like a design flaw. If startups were to relook at the industry, they would perhaps move to more periodic reviews, maybe reviews every few months or after a quarter of the book is done. Maybe this is being done in some cases, I do not know. But this is one improvement I thought they could make: read it after maybe three chapters, or once 25% of the book is done, instead of waiting till the author finishes the whole book and then reading it.

Gottlieb: “…A lot of things one doesn’t usually think about can affect the reading experience. The way you structure the book, for example—whether you divide it into chapters or let it run uninterrupted, whether you give the chapters titles . . . Years ago I edited a wonderful novel that later became a successful movie, Lilith, by J. R. Salamanca. It was a powerful and affecting book, and the character who dominated it, who sparked it, was the character named Lilith, but she didn’t turn up at all in the first sixty or eighty pages. I don’t remember what the original title was, but I suggested to Jack that he change it to Lilith, because that way through all the opening pages of the book when Lilith hadn’t yet appeared, the reader would be expecting her. So just by changing the title one created a tension that wouldn’t have been there otherwise.”

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3/ Learnings from Consumer AI × Fashion: Why Alle Didn’t Work – Prateek Agarwal

Link to the piece.

Really enjoyed this piece by Prateek Agarwal, the founder of fashion startup Alle reflecting over why his startup didn’t work. I wish more founders would write postmortems like this. There are lots of learnings here, especially for young founders and for those exploring similar business models.

That said, I have one small quibble with an otherwise very well-written piece, and it’s about Prateek’s definition of PMF. He believes he achieved PMF, and my view is that I don’t think Alle quite had PMF. Of course, PMF doesn’t have one single definition, and different folks define it differently. I’ve written about PMF extensively as many of you know, and here is Chapter I of my to be published book on PMF where I define that PMF is really about two fits: product–problem fit, and motion-to-market fit.

At the end of these two fits, the startup should have a scalable GTM motion enabling predictable, repeatable, unit-positive acquisition of customers with high retention (phew!) – essentially a repeatable playbook for acquiring paying customers, and on a profitable basis. It is a purist harder definition, but I like it for the fact that it brings both the product and the market aspects together.

I think Alle clearly had the first fit per my definition, but not the second. There was no repeatable, sustainable, profitable playbook for customer acquisition. In fact, the strong, almost flatline retention that Prateek talks about is actually a classic sign of product–problem fit, as I mention in my essay above.

Still, I don’t want to protest too much, because PMF has no one definition, and it is used often as a shorthand for product love. It does feel like Alle had product love and definitely a 10x / Delta4 product, but the fact that this was an infrequent-use product, didn’t lend itself to a compelling business model. One way to look at it is that this was a Vitamin product in a Blue Ocean market. And when you’re a vitamin product in a blue ocean, you need what I call an early lovable product. Something that is immensely loved. Of course that love needs to translate itself into a compelling biz model to monetize those users. And there, I think, lie the fundamental challenges, especially given the infrequent use case and the business model issues shared here..

4/ Joy Covey: The Deep Keel – Kevin Gee

Link to the piece.

Outstanding piece by investor and investment historian Kevin Gee; an evocative and touching portrait of Joy Covey, Amazon’s first CFO. Also a good look at the early days of Amazon.

5/ 10 years and counting…. – Deepak Jayaraman

Link to the piece.

Enjoyed this piece by my friend Deepak Jayaraman reflecting on 10 learnings over the past 10 years of going solo. DJ as he is called, was a management consultant turned headhunter, who quit to start his individual practice as an executive coach and advisor. Since then he has birthed a popular and long-running podcast in this space, as well as written a book; both titled Play to Potential covering the arena of leadership, coaching, careers.

From his piece, learnings #2 #4 and #6 stood out.

#2: What they discovered was that the depreciation curve of irrelevance was steeper than they anticipated. He expounded that when you belong to a platform like a McKinsey or EgonZehnder, the platform does the hard work of staying relevant and replenishing itself. Somebody in EgonZehnder London is probably working on the latest interview methodology that somebody in EgonZehnder Mumbai could use. Somebody in McKinsey New York is perhaps working on a Strategy framework that the consultants in India could use.

He went on to say that if I just focused on the “Operations” of my business without adequate attention to replenishing myself, I could be going down the curve [of] irrelevance faster than I could imagine. This impetus got me to start the “Play to Potential” podcast which, over time, has developed into the legs on which my platform stands (as things stand today).

#4: We have all heard the term – Leadership is lonely. There are no peers and everyone interacting with you has their own agenda to pursue. However, I have found that XYZ, the person is lonelier than XYZ, the CEO. The CEO, when he or she is looking for advice, can lean on a range of Advisors (Board Members, Strategy Consultants, Marketing Agencies, Lawyers et al) to have sparring partners for various facets of their business.

However, I find that these leaders are juggling various identities and have questions across these that they are often navigating themselves. Questions such as:

  • I have had a successful run in the current role over the last few years? How should I think about my journey for the next 5 years?

  • Should I be on this treadmill or slow down and spend more time with my children?

  • I just made Partner and had a baby soon after. How should I prioritize across the various elements?

  • I am the MD of a PE listed business. I have just signed up for a full Marathon. It keeps me healthy but am I overdoing it?

They often do not have some one who understands the full context of their lives across their various dimensions! That is the space where I have had an opportunity to engage with a few of them and it has been fulfilling to be of value as a trusted sounding board helping them play to potential across the various facets of their life!

#6: I have also come to realize that being content does not mean that one is not ambitious. It might just mean that one is patient about what is yet to come. I have discovered that people often applaud visible short term ambition that is restless but do not often notice and appreciate the version of ambition that is patient about the outcomes.

Over the last few years, I feel bringing in contentment has helped me sleep better at night and show up in a more meaningful way to the various people around me.

(Pair #6 above with potential energy mentioned in the 10 years of Acquired podcast!)

Other articles I enjoyed

Loving the annual letters trend that Dan Wang popularized. 2025 saw annual letters from Dan Wang (back after a year’s break during which he wrote Breakneck), Jason Crawford, Zhendong Wang, Samuel Albanie etc. Who did I miss?

I enjoyed this piece by Dharmesh Ba on the changing Indian consumer.

Ever since X / Twitter rejigged the algo to popularise X articles, been seeing a few go viral. This one ‘The Prison of Financial Mediocrity’ on the rise of punting / gambling (prediction markets, crypto, sports betting, stocks) was astute. Pair it with this piece by Alex Danco of A16Z and this by John Luttig of Founders Fund

Of course how can I leave out ‘Something Big is Happening’ and ‘The 2028 Global Intelligence Crisis’!

Bye!

It is time to wrap this! As I shared earlier, you should think of this substack as akin to a monthly magazine – you don’t have to read it all in one sitting, and you don’t have to read all of it! Feedback, or your own ruminations are welcome. Please use the comments to engage.

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