Overall

Parts of the books are timeless while others feel outdated before the end of the year the book was published in. Parts of the book were inspirational, while others felt very “echo chambery” if you spent some time in the Bay-Area. Parts of the book felt like an action movie, while others felt like a monotone teacher giving a history lesson. Overall, if you’re interested in the history, with some specific anecdotes, of how Venture Capital came to be, I’d recommend this book. If your goal is to understand what’s happening in the world today, podcasts similar to “All-In” do a much better job.

The notes below were raw & unedited.

Key Concepts

Coopetition - By far, my favorite concept from the book was the idea of coopeition: competition & cooperation. The whole concept where “an engineer could ask a colleague from another startup for advice on a problem; no culture of secrecy inhibited cooperation” is exactly why Silicon Valley lost its luster, and why I believe the crypto industry will prosper. The fact that “a small number of tight relationships makes for less idea sharing and innovation than a large number of loose relationships” is exactly the transparent, digital world we live in and why I’m so excited to be working from home, while having the privilege of traveling to conferences in this day and age.

Metcalfe’s law - Metcalfe’s is often used to value social networks (e.g. Facebook, Bitcoin) by stating that it hard to lose value once it exceeds a certain threshold. What I didn’t know is that the person who coined it also invented the Ethernet!

What it means to be a VC? - To many, a VC is just someone who gives money, and there is definitely a time and a place for it. However, for those who really want to make being a VC part of their career, it’s all about taking that midnight call when the founder needs your advice, and flying out the next morning to get shit done.

Company & People Profiles

Fairchild Semiconductors - This company, founded in 1957, was basically the birth of Silicon Valley. The original founders, fairchildren, were literally writing the book that is so evident to startups today. Realizing that building a business is more than just about building, but about management. Knowing that raising money is even an option, wasn’t obvious back then. It’s crazy how these individuals were literally trying to figure things out on the fly when no playbook existed. The investment history and the number of hands it waved through was too many for me to remember.

Ycombinator - Paul Graham never set out to build YCombinator but it kind of happened by accident and he went with the flow. In its early days, him and the other partners worked with the founders very closely, but recently it’s just become a pipeline of companies and lost its charm (in my opinion).

John Doerr - This is a name that I believe most people vaguely recognize, but the young generation (young Millennials or Gen Z’s) like myself, won’t necessarily know what to attribute his work. Kleiner Perkins, chaired by John, which is just a name I’ve heard of but know nothing about was once the Sequoia of today, having been early investors in Netscape, Cisco, Amazon, Google and several others. It was the gold standard but eventually fell behind. John Doerr supposedly bought 13% of Amazon for $8MM!!! He was also the one who introduced Eric Schmidt to Sergei and Larry. John has also been investing in Climate startups for over 15 years, but it’s fair to say he was at least a decade too early. He’s had his run, and is still around advising, so it was cool to learn about him. One other thing John and I also have in common is that “The number of different things about which John Doerr has said, this is the greatest thing ever, is a big number,” a rival investor noted about him and my friends say about me.

Jaycal & Uber - If you’ve ever listened to a podcast with Jason Calacanis, there’s a “small chance” he may have mentioned his super early investment in Uber. I knew he was an early investor, but I had never known how involved he was in the day-to-day operations, and all the drama that went until Dara took over. I think it gave me more respect for his work there other than having just been a source of money bags.

The PayPal Mafia - The history and politics behind how this came to be is fascinating. It wasn’t just a group of friends starting a big company and then splitting to do their own thing. Between Musk almost being ousted by the company, the negotiations between Musk & Thiel, Thiel convincing Max Levchin to apply his cryptographic work to payments, Nosek being an old friend of Max, it wasn’t just smooth sailing. Lots of pain, lots of negotiation, lots of headwinds, but it worked out!

Sequoia - Though this is a well known house name today, it was founded in 1972 and literally took decades to figure out its playbook before its hockey stick investments started succeeding.

Google - I learnt that Google innovated the VC industry in a few different ways. Firstly, prior to Google, investors got to own a VERY large part of the company (e.g. sometimes a majority). Google was one of the first companies where Series A only sold about 10% of the company to investors. Furthermore, it was the first company to give the founders “super shares” so they can maintain their decision making powers. Even though I believe this was done in good faith by Sergei and Larry because they had a ton of awesome ideas (electric cars, space elevator, smart fabric, etcā€¦

Cisco - The founders of Cisco were Stanford students who pioneered the idea of LAN and then took it a step further with Cisco. However, these were not professional serial entrepreneurs. They were very eccentric personalities, without ambitions, but just following what they were interested in at the time, and didn’t hold control of the company for long. It’s fascinating how no one heard of what the founders have been up to or what they’re doing today. Lots of controversy here that I won’t get into.

Yahoo - TIL that Yahoo is actually an acronym and not just a fun thing to say. It stands for “Yet Another Hierarchical Officious Oracle”, which makes me feel like there’s a place for it in the crypto space ‘:). I also learnt that it was a simple site maintained by grad students before they really decided to take it seriously.

Softbank - I never knew how important of a role Masayoshi Son played outside of just investing billions in WeWork, I say only half-jokingly :). Apparently he’s been around for a while, and his approach to giving TOO much money has always been the case. He practically forced Yahoo to take his money by saying that he would offer it someone else if they don’t. When something like this happens, you don’t really have an option.

Alibaba - Apparently Alibaba was a very unsexy investment & opportunity in its early days, and the person (whose name escapes me) who worked for Goldman and convinced them to invested, managed to get half of Alibaba for $5MM! However, the investment was so risky and unusual for the company, they sold out very early on.

Yuri Milner - Yuri Milner is one of my favorite investors, and part of it is probably because he’s Russian, so I do have a bias here. However, he’s an extremely successful investor, that does innovate in various ways, and manages to keep a very low profile relative to other billionaires. From this book, I learnt that he managed to increase his position in Facebook by buying out employees (before the IPO) at a lower price than the investment, which led him to a higher return, and helped Mark Zuckerberg concentrate his power.

UUNet - Apparently this was the first ISP provider in the US that no one knows about.

Tips & Lessons

Tips & Tricks - If you’re a technical founder not trusted by an investor, let them invest the money and bring in the manager they want (assuming you trust the investor). This way you do less work, less management, make it an easier sell and make the investors happy.