Welcome to the 33rd edition of my irregular newsletter. Since the last newsletter, published early April, we saw 300+ new subscribers sign up for the newsletter. Welcome aboard my new subscribers, and enjoy your first newsletter.

Quick housekeeping announcements for the new subscribers. The newsletter has two permanent sections: Writings – where I usually write and / or refer to one or more original pieces that I published in the previous months, typically about venture or the startup ecosystem, and Readings – about what I read and learnt about. My reading diet is tilted rather heavily in favour of books and podcast transcripts, and against articles / newsletters. This will naturally reflect in the reading list.

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

The Four Ways to Starting Up

I wrote a new post after a while. This looks at the four different routes a founder can take to arrive at the startup idea. These are
– Prospecting (brainstorming different spaces)
– Personal Pain (solving your problem; you are the customer)
– Personal Experience (you arrive at it, basis your work / life journey)
and finally being
– Opportunistic.

In the post I also looked at the 100+ Indian unicorns created thus far to see what the most popular route is. Here is how the four routes stack up for India’s unicorns!

I have also included links to the supportings on how I arrived at the above estimate in my post.

Link to the piece. Do let me know what you thought of it.

This is in fact part of a longer piece I am working on around ‘the pick’, or the problem space that the founder choses to explore. The commonly used term is startup idea, but ‘the pick’ or problem space, is to my mind is what the founder should work towards.

Readings

Podcasts

Patio11 on the Complex Systems Podcast

Link to podcast episode.

Patrick McKenzie or Patio11 as he is known on twitter runs the Complex Systems podcast. This time he is interviewed. There is a fun passage in this on how he met and impressed his wife Ruriko by singing Beyonce’s ‘Single Ladies’ in front of 200 Japanese folks:)

This passage stood out in particular. Patio11:

“One word is we have the concept of ‘alpha’ in finance, and alpha – one Greek letter smuggles in a huge amount of understanding about how the world works. I would love to be able to describe someone’s alpha above the LLM baseline in discussing a topic. Because there are a lot of human writers in the world who have no alpha above the LLM baseline.”

Good mental model (if I can call it that) for how to think about evaluating a person in the AI age. What is their alpha above the LLM baseline? What do they bring to their work a reasonably powerful AIgent can’t deliver?

Dwarkesh Patel AMA on the Dwarkesh Podcast

Link to podcast episode. Link to excerpts from Dwarkesh’s AMA I found interesting.

Dwarkesh Patel’s AMA episode (similar format to the Patio11 podcast episode above where the host is now the interviewee) is an enjoyable listen, covering AI (naturally), his fave history books (Robert Caro’s LBJ biographies), as well as how he selects podcast guests (would be enjoy the 1-2 weeks of research before he interviews them?)

Dwarkesh: “The main thing I took away from those (Robert Caro’s LBJ biographies) books is LBJ had this quote that he would tell his debate [students]. In his early 20s, he taught debate to these poor Mexican students in Texas. And he used to tell them, “If you do everything, you’ll win.” I think it’s an underrated quote. So that’s the main thing I took away. And you see it through his entire career, where there’s a reasonable amount of effort which goes by 20/80. You do the 20 to get the 80% of the effect. And then if you go beyond that to get, “Oh, no. I’m not just gonna do 20%, I’m gonna just do the whole thing.” And there’s a level even beyond that, which is an unreasonable use of time. This is going to have no ultimate impact, and still try doing that.”

“If you do everything, you’ll win.” That line gives me goosebumps every time I read it. It is advice for writing or creating, and for life itself.

David Senra on Robert Kierlin, Fastenal on Founders Podcast

Link to podcast episode. Link to excerpts from Senra’s podcast episode I found interesting.

Like most of David Senra’s podcast episodes, this one too is chock full of insight and wisdom. I hadn’t heard of Robert Kierlin or Fastenal before this episode. Senra looks at Fastenal through Kerlin’s biography ‘The Power of Fastenal People’. Fascinating episode. The key concept is around keeping a common goal, and organising your company around it – removing everything that distracts from the common goal, and setting incentives and culture to enable everyone to work towards that goal. As with all Senra episodes, he uses the themes in the biography he is covering as a springboard to jump to learnings across several other biographies as well, such as Mike Bloomberg’s biography, from where he comes with the terrific “Do not make the mistake of confusing your product for the device that delivers it.”

Senra: “The one he repeats most throughout the entire book, that your company should be organized and oriented around a commitment to a common goal, and this is their common goal, growth through customer service.

And so what is the uncommon pursuit of the common goal? Organizations succeed to the extent that all of their members pursue a common goal. This is one of those simple ideas that are so difficult to practice. The greatest danger to the success of the organization is that it starts developing unnecessary subgroups, and these subgroups start pursuing their own goals rather than the common goal of the organization. That is bureaucracies what he’s describing

This is from Les Schwab’s autobiography. “We have had over the years some people in the office that sometimes think that they are more important than the stores.” “The office serves only one purpose, and that is to serve the stores.

Sam Walton said it very similar, he says, “If you’re not supporting the customers or supporting the people that support the customers, then we don’t have a need for you in Walmart,” kept it very, very simple.”

Mark Daniel, Digital.xyz, on Infinite Loops w Jim O’Shaughnessy

Link to podcast episode. Link to excerpts from Mark Daniel’s podcast I found interesting.

I had never heard of Mark Daniel, founder of investment firm Digital, before this Infinite Loops podcast with Jim O’Shaugnessy. Some great quotes here. My biggest takeaway was around how people want complex and easy (the best pushup variant, the best translation of a foreign book) instead of simple and hard (just keep doing the simple variant regularly, just get started on the book with any translation) etc.

Mark Daniel: “Like marriage, health, building a business, building a great portfolio. All of those things are quite simple and quite hard. Whenever I find myself trying to over complicate something, it’s usually because I know what the answer is. I don’t want to accept what the answer is, because it’s going to require me to sweat. It is always the guy who’s out of shape who’s asking about push-up variations in the gym. It’s always the guy who can’t do one push up, he’s like, “But do I put my hands here? And then do I do a jumping push-up? Or do I do underhand?” It’s like, “No. Just keep going until you can’t anymore” and I think that that tends to be correct in every stream of your life that’s worth developing. You just have to do the simple, hard thing 90% of the days each year and then do it for 10 years and then look up and see where you’re at, and that tends to work out pretty well. That’s really, honestly, the only thing that I’ve seen work out well. That’s not luck driven. “

Kelly Granat, Lone Pine, on Invest Like The Best w Patrick O’Shaugnessy

Link to podcast episode. Link to excerpts from Kelly Granat’s podcast I found interesting.

Kelly Granat, co-CIO of Tiger cub Lone Pine, comes on the Colossus | Invest Like The Best podcast with Patrick O’Shaughnessy to give us a behind the scenes glimpse into how an elite public market investor works. Loved how she detailed

• the difference between how public market investing has changed from when her career began (use of credit card data and expert networks in analysis, the rising importance of third party data in impact on stock prices, the importance of macro etc.).

• how Lone Pine works – surprising amount of candour in detailing the processes. Found the 3-member data team particularly interesting – especially how they join investment meetings and even call out interesting trends and anomalies from the data they are crunching.

Kelly: “When I zoom out and think about starting as a summer intern in the summer of 2001 during business school and then returning full-time to the public markets in 2002, the industry was really different. One, there were a lot more fundamentally oriented, directional, duration-oriented investors who were doing deep research with three, four, five-year time horizons. There were many fewer leveraged pods, and certainly passive wasn’t a thing yet.

In addition, when I think about organizational structure and how we did our jobs, most fundamental firms were pretty siloed. You could cover industrials, consumer, or financials, and you were doing that with a peer set of people outside your firm with whom you developed a network over time by sharing meetings and attending conferences. The level of conversation among peers was not as informed because people were operating in sector silos in terms of knowledge, coverage, expertise, and network. In addition, the tools we used to do our jobs were pretty different. You would meet with companies, read filings, attend conferences, and try to conduct proprietary research, but things like credit card data and expert networks—all of the tools we now use to supplement our fundamental research—didn’t exist.

At the portfolio level, when I look back—and although I wasn’t managing a portfolio at that point—I observed that the tools to consider portfolio construction and risk analytics really did not exist. As a fundamental investor, you were going bottom-up, building a single-stock portfolio and considering how stocks acted in concert through correlations and similar factors. The new behavior feels more like what we call setup dynamics—a function largely of the dissemination of a lot of third-party data. This creates setup dynamics around events, quarters, conferences, investor days, and how those events are previewed based on what third-party data suggests or on the cues provided by sales traders at banks regarding whisper numbers.”

Gili Raanan, Cyberstarts, on Invest Like The Best, w Patrick O’Shaugnessy

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

Cyberstarts is one of the most successful venture capital firms in the world. They do only cybersecurity software investments, and are based in Israel. Their first fund resulted in a 40x return(!) thanks to stakes in firms such as Wiz, Island Security, Fireblocks etc., and across five funds and $700m invested, the portfolio value is $45b, half of the valuations of private cybersecurity companies!

In the episode, Gili talks about the Cyberstarts fund philosophy, and the Sunrise program they use to figure out what problems the founders should go after. The Cyberstarts methodology works differently from traditional venture. Instead of backing teams with existing tech / product going after large markets (the typical way), they identify founders (typically from Israel’s elite cyberwarfare-focused Unit 8200) who spend time talking to CISOs (Chief Information Security Officers) to figure out problems they have and which they can solve for, and only then do they start building. This is the famed Sunrise program.

There has been some controversy about the Sunrise program given that many of the CISOs they interview get carry in Cyberstarts, and the carry can increase if you also purchase the products of Cyberstarts’ portfolio companies. Hmmm. News is that this payments program is now suspended. If we ignore the payments part, then the methodology of understand what the market wants before building is a useful one to keep in mind (compare with Jen Abel’s perspectives on market-first startups hitting PMF faster than product-first startups, though the latter have a far bigger upside).

The other interesting perspective was Gili’s framework of the four personas – the one with the pain, the one with the budget to pay for a solution for the pain, the one with the authority to approve it, and finally the one who will use the product. The more these four converge into one persona, the faster the chances of PMF and success for the startup. Really insightful.

Gili: “And then I learned a very important lesson about the four customer profiles. When you sell a product, you’re going to face four personas. The person that has the pain point, the person who has the budget to pay for a solution to solve that, the person that has the authority to decide on the product or solution, and the fourth person is the one who would actually use the product. Now, as a startup, if those four personas map into a single person in real life, that’s a mega hit.

And that was the case of Wiz. If those four personas are mapped into four real people, there’s one real person that has the problem, one real person that has the budget, one real person that has the authority, and a fourth person that actually uses the product. Don’t do that. Go and pivot.

And if you map into two people, that would be a very nice company. If you’re mapped into three people, that’s borderline. You may or may not want to pursue that. So for Wiz, it was a single person. It was the CISO. The CISO, the Chief Information Security Officer, had the problem and the authority to decide on a cloud security solution. They obviously had the budget and, most importantly, they had the AWS credentials that enabled them to deploy the product. So Wiz was able to do something very unique just because all those four Personas mapped into one real-life person.”

Nabeel Hyatt, Spark Capital, on 20VC w Harry Stebbings

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

Serious venture nerds will find bits and pieces of this episode featuring Nabeel Hyatt, GP at Spark Capital (Twitter, Antropic, Discord etc.) interesting, but on the whole, there is nothing exceptional here. Still what stood out:

• Nabeel’s framework about the three types or lenses of AI startups (adaptation, evolution, revolution)

• his observation about venture moving from the puzzles phase to the mystery phase (inspired by US intelligence operative Gregory Treverton’s maxim)

• Nabeel’s point about misalignment of incentives at the Principal / Junior GP level, where they are driven to deploy fast and get markups.

• A quote that stood out: ”It is hard to optimise for performance when your competitor is optimising for deployment.”

Nabeel: “Greg Treverton uses this phrase of puzzles versus mysteries, which is just like, puzzles are this thing that you can like, use that raw horsepower to solve, and mysteries are, you have to go on the journey. In many ways, like the B2B SaaS blow up of that era was all about like the industrialization of venture capital. It was all about figuring out all of the puzzles needed to hire 100 associates to do all of the work, to figure out exactly the right SaaS metrics, and then grind it all out. And no one has any idea what a model is even going to do in a week. So I don’t know how that isn’t a mystery. And so I think you have to build a firm with that set of talent.”

I would say the early stages of venture capital, the like real early stages of venture capital, if we’re thinking about the beginning of Sequoia and so on, like that was all mysteries, man. Like that wasn’t puzzles. And so I think the truth is it may sound incredibly old school, but it’s going back to the way things were really done before. It is an artisanal business. There’s a reason it’s an artisanal business.”

Jen Abel, Jjellyfish, on the Lenny Rachitsky Podcast

Link to podcast. Excerpts from the podcast episode I found interesting here.

I thought this podcast episode where Jen Abel of GTM consulting firm Jjellyfish covers the nuances of founder-led sales was really good. Very very relevant for early stage B2B founders. One point that stood out for me was her pov on how going market-first (understanding the pain points of a market first and then building the product) can take you to PMF (product-market fit) faster vs going product-first, where your leverage the state of the art in tech to build a cool product, and search for a market large enough. That said going product-first offers a more unbounded upside (and downside). Very interesting, and the reason why the Sunrise programme (see the podcast episode on Gili Raanan of Cyberstarts referred to above) succeeds becomes apparent now.

“Jen Abel: Remember that amazing chart you drew where it talked about the length of time it took for product market fit. If you look at the top section where the time to product market fit is consolidated, and you go all the way down to the airtables and the figmas, which a long time to get to product market fit. If you think about the earlier ones, which were, it was like GitHub that had product market fit pretty quickly, then Vanta.

There’s this thing in my head and I haven’t fully validated it but I’m going to share it with you, which is did they start with the market problem first and then build the product? Because they knew who their market was right off the bat. Versus an airtable and a figma that I think started with a technical insight and then were trying to find their market.

Lenny: I think that’s absolutely right. Vanta, the way they approached it, Christina, she was searching for a pain. She was obsessed with talking to everybody about a pain that they needed solved, and then she just built it in spreadsheets. So she started with the market very much so.

Jen: And I think product market fit when you start with the market first, it’s accelerated. But I will say this, I think that it’s also capped on the upside. Because you’re starting with the market versus the airtable and the figma, which started with the technical insight and has uncapped upside. But one is certainly riskier than the other.

Starting with a product is a hell of a lot riskier. And this is where I come back to so many people will say, how did you get funding and not know who your market is? And it’s like, because if they do find it, that’s a really, really, really big win. Versus I think if you start with the market first, you could potentially get a good win but is it more capped?”

Brandon Sanderson, on the Tim Ferris Podcast

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

I haven’t read Brandon Sanderson, and very unlikely to but this was a fascinating chat all the same. What stayed with me

• the two types of (fantasy) fiction writers – gardeners who don’t have every plot element defined prior to writing, and architects, who do (originally suggested by George R R Martin)

• his view of plot as progress (mysteries are where plot progresses in terms of revealing of information); aspiring fiction writers should check out his course lectures

• pros / experienced writers throw out chapters a lot, while amateurs tend not to

• a fascinating passage / discussion on the value of his time, and how an hour spent signing copies makes him $250k and how he has had to set boundaries on things that take him away from writing, like talks.

Tim Ferriss: — because you end up placing so high a per hour value on your time, that every squandered minute is like having a pound of flesh taken and you can drive yourself insane.

Brandon Sanderson: Yeah. I wind in that because if I sign my name, that’s $250 because of the leatherbound. But I don’t want to spend my life signing my name, I want to write the books. But the most money I can earn per hour, I can sign 1,000 of those in an hour and that’s 250 each, which is just an unreal — if you think about that, that’s like — yeah. That’s —

Tim Ferriss: That’s bananas.

Brandon Sanderson: That is bananas. My normal writing time, I can put a different dollar amount. It depends on what I’m writing —

Tim Ferriss: Did you ever get pulled — because it happened to me with speaking engagements, different thing. But did you get pulled away from the creative work or the actual wordsmithing at any point or were you able to hold the line?

Brandon Sanderson: So I was able to hold the line, but barely. At one point, I started to get popular enough that people wanted me on a speaking tour, right? And so, I put a dollar amount on it. I’m like, “Well, at that point, a day of writing,” and it’d take me two days, “a day of writing is 25 grand.” So two days, 50 grand. And we put it up there. Instantly, like 10 inquiries. And I’m like, “I don’t want to do that.”

David Senra on 400 pages of Warren Buffett, Charlie Munger in their own words, in Founders Podcast

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

There were three ideas or concepts that stood out for me from this episode. The first was on designing an organization or career or an investing strategy that plays to your particular strengths and how you like to spend your time. He gives the examples of Michael Dell, and Warren Buffett. Figure out your strengths and stay around that. The next is on incentive design, and how not to reward short-term / profitability metrics – good illustration of how profitability incentives encourage managers to cut brand spends (the long-term important but not today’s essential) and how that impacts the long-term sustainability of the brand. Finally, there is a wonderful passage on how there are only one-two or perhaps one metric that matters – in the case of Coca-Cola all that mattered was whether daily servings would grow globally. If you believed it did, you knew you could continue holding or topping up your investment.

Senra: “In business we often find that the winning system goes almost ridiculously far in maximizing and or minimizing one or few variables.” Sam Zell says the same thing. What they say about Sam is what Sam said about Jay Pritzker.

Jay Pritzker was his mentor when Sam was a very young man. I think he was still in his 20s when he met Pritzker. He said that Pritzker was the greatest financial mind of anybody he ever met. Sam would bring him a deal or they would talk about buying a business, and he’d say, “Okay, here’s a list of eight things or seven things that we need to worry about.” And Pritzker would respond, “Bullshit. That’s the one thing. There’s only one variable. And if you solve for that variable, the deal will work out.”

They’re talking about how if you went back in 1919, you could have bought a share of Coca-Cola for 40 bucks. And in between that time, it dropped by 50% multiple times. There was World War II, there were pandemics, there was the invention of the atomic bomb. And really the only important thing was how many servings of Coca-Cola were going to be served every day many years into the future. So you think about what is the most important factor. That’s what Jay Pritzker taught Sam Zell. That’s what Sam Zell taught other people.

And that’s what they’re saying here. Wars be damned. Economic or financial crisis be damned. If I’m buying the stock for the long term—and I forgot how long they may have been holding this, perhaps three decades—are they going to be serving more Coke on a daily basis in the future? All that mattered was by 1998 they were selling 1 billion servings a day. And Buffett makes the point here: “The person that can make people a little happier a billion times a day around the globe ought to make a few bucks doing it.”

“If you developed a view on any other subject in any other way that forestalled you on acting on that which is most important, the specific narrow view about the future of the company, you would have missed a great ride.”

Neil Mehta on Invest Like The Best w Patrick O’Shaugnessy

Link to podcast. Excerpts from the podcast I found interesting here.

This is the companion podcast episode for the article on Neil Mehta reviewed below. This is the better of the two, though much cover similar ground. Notable for Neil Mehta / Greenoaks’ focus on identifying the 10-15 best founders that matter, building products offering ‘jaw-dropping customer experiences’, and overpreparing for their meetings, and getting answers to the question: “Are your best days ahead of you or behind you?”.

This below quote on Korean ecom co Coupang’s founder Bom Kim’s ability to focus on the single most important at the startup at the time, was very interesting to read. I like to use the term Herbie for the single most important thing (SMIT) or chokepoint at a time in the startup’s or project’s life. I encountered the concept in a Mike Maples podcast, who got it via The Goal. In the book, The Goal by Eli Goldratt, Herbie was the fat kid setting the speed of the group trek. It was only by speeding Herbie that you could increase the speed of the group. Herbie is the rate limiting factor at that point in the startups’ life. Herbies change from time to time in a startup’s life – sometimes it is top of funnel, sometimes it is fundraising, sometimes it is retention. Getting to PMF and eventual success is nothing but the founder sequentially removing these SMITs / Herbies along the startup’s journey.

“Neil: It starts with focus. Bom (Kim of Coupang) had this unique ability early on to identify what was the most important thing in the company and focus all his time on that, at the exclusion of everything else. It wouldn’t be unusual if you looked at Bom’s calendar on a Sunday night, everything the next week, Monday, Tuesday, Wednesday, Thursday, Friday, it would just be blocked out with one single thing he was trying to accomplish.

If it was negotiating cost of goods sold in the diapers division in mid-2014, there’d just be two weeks locked out to just do that for six hours a day, five days a week. And he would just assemble a team and go deep on that and let everything else burn if needed.

That kind of focus is just extremely unusual. People like to say they’re focused. They don’t really understand what focus means. Focus means saying no to everything else, everything else, at the cost of doing what the single most important thing is. There’s two parts to that. It’s the ability to prioritize what is most important. You have to practice it to be able to intuitively grok what is most valuable and most important.

And then the ability to maniacally do that at the cost of everything else is an intestinal fortitude that just not a lot of people have. “

Rahul Vohra, Superhuman, on the Lenny Rachitsky Podcast

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

Lots here to chew on in this podcast episode, though the highlight was Rahul’s algorithmic or iterative approach to work towards PMF or Product Market Fit. That said, strictly speaking, in my PMF framework, it is actually PPF or Product to Problem Fit he is iterating towards. The other interesting points were his framework on market widening vs solution deepening, and how startups move from one to the other at different times, how manual onboarding helped Superhuman, and how to set pricing for software (or any other product). Really good.

Rahul: “But to focus on the segment of the somewhat disappointed people, they kind of love your product, but something, and I would wager something small, is holding them back. So you then divide them into two camps, the camp for whom the main benefit of your product resonates and the camp for whom it doesn’t. And what do I mean by that?

Well, you go back to the people who really love your product and you basically ask them why. What is it about my products that you really love? In the early days of Superhuman, it would have been speed and keyboard shortcuts and the overall design aesthetic as well as the time that we were saving you.

You then go back to the somewhat disappointed users. And in the superhuman example, I would simply ask, wait, do you like superhuman because of its speed or for something else? And if it’s something else, well, and this is hard to do, but politely disregard those people and their feedback.

Because even if you built everything that they asked for, they’re still pulling you in a different direction. And the thing that they like the most from your product isn’t actually what the people who en masse love it the most for is. So you have then articulated the sub-segment of the sub-segment that it makes sense to pay attention to. “

Articles

‘Letters to a Young Investor #2’, by Kirsten Green, in The Generalist

Link to article.

The last of Kirsten Green’s ‘Letters to a Young Investor’ series in The Generalist. This one covers fund management and org building. The previous letter was reviewed in an previous piece of mine. That was on her investing frameworks.

I found it interesting that they have a head of research as well as a head of data.

Kirsten Green: “This approach has led us to thoughtfully add specialized roles in research, data, portfolio support, and operations. Our Head of Research, Jason, exemplifies the strategic value of dedicated expertise. Given the depth of our proactive efforts to uncover promising tailwinds and business evolutions, we determined it was worthwhile to have a dedicated function that interplays with the investing team’s passions and deal flow. The research team ensures we consistently show up with a prepared mind, systematically covering the landscape to build conviction in our ultimate point of view or investment decisions.

This research function acts as both a complementary force and a counterbalance to the natural enthusiasms of investors. When an investor develops a thesis, research helps pressure-test assumptions, identify blind spots, and contextualize the opportunity within broader market shifts. This deliberate tension between passionate advocacy and rigorous scrutiny creates a more complete understanding that strengthens our decision-making. It also means we’re rarely starting from scratch when evaluating opportunities – we’ve often been tracking emerging spaces well before specific deals materialize.

Similarly, our Head of Data, Luke – everyone at Forerunner needs basic data literacy, but Luke brings exponentially greater capabilities that create leverage across everything we do. He can analyze at a depth and context that transforms our decision-making, both in evaluating new investments and supporting portfolio companies through critical inflection points.”

I was reminded of Kelly Granat’s podcast (scroll above) where she describes how Lone Pine has a 3-member data team that supports the investment team, and validates their assumptions, and highlighting interesting patterns from the data they are seeing.

It is not a bad idea, and surprising that more investment teams in venture don’t have this, especially given the data that is beginning to become available via third party data sets, expert calls etc. In fact I am beginning to see expert calls being used in Series A investment evaluations in venture in India now.

‘The Visions of Neil Mehta’ by Jeremy Stern, in Colossus Review

Link to article.

Long read on Greenoaks’s Neil Mehta, who has been a fairly astute picker of high growth (some may call generational) startups such as Coupang, Wiz, Figma etc. Venture nerds will enjoy the colour and back story. That said, I found it a tad hagiographic though. Still a useful read.

Some quotes I particularly enjoyed.

Neil Mehta: “We’re only focused on two things in life: great business models and great founders. When you find them in the same situation at the same time, we go all in.”

Neil: “Each year, Greenoaks identifies about 10–15 people who might be like this, and to whom the firm could be a uniquely close partner. Before any meetings, they set about preparing. “I don’t mean go on the website and use the product a little bit,” Mehta said. “We’ll talk to their customers, examine exactly what competitors are doing, understand the product in a granular way, study the underlying technology and how it’s evolving. There’s a series of things we’re testing for, depending on the company. We can understand from the outside-in better than almost anybody else on Earth. There’s no need to explain the 101 or go through remedial background. For a founder, that makes a first meeting with us feel like a fourth or fifth.”

‘Paradigm Shifts’ by Dom Cooke, in Colossus Review

Link to article.

I loved this passage from the Colossus Review profile of Matt Huang and his crypto venture Paradigm. It captures the typical mindset of the elite VC, obsessed with missing out on the next big venture investment even as s/he quietly notes / celebrates the last success, for you are only as good as your next unicorn.

“At Sequoia, Huang found what he calls “the highest-standards place I’ve ever experienced.” When Facebook acquired WhatsApp for $19 billion on his second day, partners gathered briefly in the lobby. Champagne was poured but left untouched. Within five minutes, everyone had returned to work. Eleven-figure exits faded into the shadows of the firm’s legendary portfolio that includes trillion-dollar businesses like Apple, Google, and Nvidia. The culture demanded excellence in ways that elevated his already considerable ambition.”

‘CEO Explains How He Faked Results in $300 Million Meltdown’ by David Ramli et al, Bloomberg

Link to article (may be paywalled).

Riveting story of how the Indonesia aquaculture startup eFishery’s founder & CEO Gibran Huzaifa inflated his company’s revenues over a six year period, raising $300m+ but finally getting caught out. Its investors thought the revenues were $857m in the first nine months of 2024, but it was actually $172m. Huzaifa cooked the books successfully over a long period of time, but finally it became hard to maintain. That said, he doesn’t come across as a villainous figure as much as someone caught up in events that went out of control. All of us VCs have nightmares about scenarios like this. There is, truthfully, no way of knowing what happens inside a company, short of doing surprise audits, which corrodes the trust battery you have with founders. The best you can do is to avoid putting intense pressure on the founder to keep growing, and to let the founder know that it is not the end of the world if things don’t work out. While that isn’t what led to Huzaifa’s actions here, a key reason (though not the only one) for these frauds are spurred by the founder trying to keep the show going, lest they fall out of favour with investors.

Bye!

It is time to wrap this! It is really really long, and perhaps the longest newsletter I have written. [One of my goals for the next few months, is to try and experiment with formats that lead to shorter and more frequent newsletters!] 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!

That is all for now folks. Feedback, or your own ruminations, in the comments or at sp@sajithpai.com (Please don’t send pitches or CVs or anything work-related at my personal id; I won’t respond to them at this id; instead please use sp@blume.vc for pitches and any official comms please).