Business & Money

I was recently listening to Steve Jurvetson’s interview on Tim Ferris’ podcast (sorry Android friends) when Steve said something interesting. He said that he NEVER sells shares in a company that he invests in. At first, it sounded ludicrous. How can you make money if you never get liquid?

Of course, there’s one big caveat. That is when Steve and his previous firm DFJ don’t have control of the decision to sell (e.g. an acquisition).

If a company IPOs, most of the shares are distributed to the LPs, with the VC firm keeping some small amount of those as carry. Regarding these, Steve never sells.

He doesn’t sell shares in secondary offerings, he doesn’t sell shares on the public markets. He just doesn’t sell. Instead, he claims to bet on his companies “in perpetuity.”

There are a few reasons I love this.

First, it’s an incredibly liberating approach. Once you place a bet, it removes all of the cognitive dissonance that might arise when sell opportunities present themselves. There are no internal mental battles about the long-term viability of the business. It removes any short-termism and completely aligns you with the founders and the mission of the company.

Second, investing has power law dynamics. The big winners will erase all of the mistakes along the way. One big winner accounts for every loser combined. When I look at my portfolio, Amazon, Facebook, and Tencent are the big winners. The returns there trump everything else. If I had held on to Netflix and Nvidia, they would also be in that camp. And to make up for those boneheaded sell decisions, I’ll have to hope I get lucky with another big winner. Better to hold the winners in perpetuity and avoid all of the psychological biases associated with being human.

(For Steve it is, of course, much easier to adhere to this philosophy after you’ve already made a boatload of money)

Human Progress

There are moments in today’s world when it becomes hard to be optimistic.

Anthony Bourdain. Kate Spade. Tim Bergling (Avicii). Verne Troyer (Mini-me). Many of the people closest to us. Suicide and depression are ravaging our generation.

The opioid epidemic is salient and severe.

Foreign policy. Trade wars. Xenophobia. Populism.

At times, we all need warm and uplifting reminders of why we must keep working; why we must never stop pushing forward.

One such example comes from Valeria Kaur, a Sikh woman, lawyer, and civil rights activist. Shortly after Trump’s 2016 victory, she gave the following six-minute address at the Metropolitan AME Church in Washington.

In case you’re too busy to watch, here’s my favorite section:

What if this darkness is not the darkness of the tomb, but the darkness of the womb?

What if our America is not dead but a country still waiting to be born? What if the story of America is one long labor?

What if all the mothers who came before us, who survived genocide and occupation, slavery and Jim Crow, racism and xenophobia and Islamophobia, political oppression and sexual assault, are standing behind us now, whispering in our ear: “You are brave?” What if this is our great contraction before we birth a new future?

Remember the wisdom of the midwife: “Breathe,” she says. Then: “Push.”

Now it is time to breathe. But soon it will be time to push; soon it will be time to fight — for those we love — Muslim father, Sikh son, trans daughter, indigenous brother, immigrant sister, white worker, the poor and forgotten, and the ones who cast their vote out of resentment and fear.

Despite what you might hear from the media, now is not the time to despair.

Philosophy

A couple weeks ago I was hanging out on my rooftop. There was a dad playing softball with his daughter. He was tossing her pitches from maybe 10 feet away and she was whiffing left and right. Of 20 or 30 pitches, she might have hit the ball maybe 2 or 3 times. The interesting thing, though, was that her dad kept saying “great swing” every time. And I’m no baseball expert, but her swing really was pretty good. It was fundamentally sound and her form looked like she knew what she was doing.

There’s an important point there. Irrespective of outcome, I think it’s always important to pay attention to process. You might say analyzing process might help you discover potential. You often hear people talk about this in relation to Tiger Woods as a golfer when he was only 4 or 5 years old. He wasn’t hitting the ball very far, but his form was perfect and his shots were perfectly straight.

What’s more, if you have a really hard problem to solve, you likely want your best people working on it. But because of the nature of the problem, the probability of success is low. So for a long time, you don’t have any good outcomes or output by which to measure success. But if you can effectively analyze the process, you don’t have to focus all of the attention on the outcome.

In other words, if the best people are working on the hardest problems, they might look like that little girl whiffing at the ball over and over. But when they make contact that 2 or 3 times, the results are unprecedented.

My Latest Discovery

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Happy travels!