Here are a few good articles the Collaborative Fund team came across this week.
The burden of experience
This is so important:
Stanley Druckenmiller was promoted to director of equity research in just his second year on the job, leap-frogging eight people who had far more years under their belt. It wasn’t apparent at the time that he would go on to become one of the most successful money managers to ever live. Instead, the reason he was given that position was because he didn’t yet carry the burden of experience. When he asked why he was promoted above the others around him, his boss said, “For the same reason they send 18-year-olds to war. You’re too dumb, too young, and too inexperienced not to know to charge. We around here have been in a bear market since 1968.’ This was 1978. ‘I think a big secular bull market’s coming. We’ve all got scars. We’re not going to be able to pull the trigger. So I need a young, inexperienced guy to go in there and lead the charge.”
When culture cracks as headcount grows:
When a team is somewhere around 10 people, things feel pretty perfect. It’s the ideal of startup culture. Everyone knows everything, everyone is contributing ideas, everyone is friendly. The whole team is close to the founders and everyone has clear(ish) roles that are crucial to success. Each role is unique and everyone has an obvious purpose. … At some point over 20 employees, everything changes. Even though the company’s future may seem more certain,the future for each employee becomes increasingly uncertain. And inevitably this creates problems.
Charlie Munger’s thoughts from this year’s Berkshire meeting:
“If all [a business owner] cares about is getting highest price, we are not a good call. We can offer happiness to a person who sells us the business. He will have lots of money and be doing what he loves doing while leaving family and employees in the best possible position. This is not the equation of many people who buy businesses borrowing everything they can and resell after dressing up the accounting.” “Don’t call leveraged buyouts private equity – that’s like a janitor calling himself chief of engineering.” “We do well, because people don’t want to sell to those guys.” “There is an army of people in finance and shadow banking who are leveraging these deals with liberal leverage and of course they pay very high prices and they get part of the upside and they don’t take any of the downside and they get fees off the top. So it is fee driven buying and it is very extreme. Of course, it makes it hard for us to buy companies.
How Louis C.K. created Horace and Pete:
He thought about it, refined it and turned it around. He told Charlie Rose, “before I write it I walk around, driving myself crazy thinking about it. I carve — I do all the carving up here. And I know what’s going to happen. I think about what it means in each interaction and what direction it’s going to go. And I think about all of that for a long time. It’s like being pregnant and finally I regurgitate it on to the page.”
A very good look at the future of oil in a self-driving car world:
Technology is about to undo a century of political and economic dominance by oil. Big Oil will be cut down in the next decade by a combination of smartphone apps, long-life batteries, and simpler gearing. And as is always the case with new technology, the undoing will occur far faster than anyone thought possible.
An excellent piece on how to pitch, leveraging off Elon Musk’s battery presentation:
Never start a pitch by talking about yourself, your team, your product, or your total addressable market. Instead,*start by naming the thing that’s getting in the way of your customer’s happiness.*Do that by painting an emotionally resonant picture of how your customer is struggling, who/what is to blame, and why. When Musk shows this image of burning fossil fuels, you can practically hear Darth Vader’s ominous breath.
Have a good weekend.