“Networks are more persistent than performance.” – Albert Azout
Albert Azout is the Co-Founder and Managing Partner of Level Ventures, a technology investment firm built on software and data science and invests in both entrepreneurs and venture capital managers, including the likes of Air Street Capital, Emergent Ventures and Work-Bench, just to name a few. Prior to Level, Albert has been a serial founder, starting analytics businesses and even a social media company before Facebook.
You can find Albert on his socials here:
LinkedIn: https://www.linkedin.com/in/albertazout/
Substack: http://albertazout.substack.com/
Listen to the episode on Apple Podcasts and Spotify. You can also watch the episode on YouTube here.
OUTLINE:
[00:00] Intro
[02:36] The origin of Albert’s blog
[04:45] How did Albert first start coding?
[07:43] Albert’s interest in networks
[13:10] Entrepreneurship around Albert
[16:27] What is collaborative filtering?
[22:18] How complexity economics affect the networks of VCs?
[27:14] Fear and greed regimes
[28:51] Telltale signs that inform the kind of regime you’re in
[30:31] Why it’s the wrong time to be investing in defense tech
[34:53] What are most LPs missing about GP networks?
[37:31] How is Level Ventures looking at networks differently?
[44:42] Archetypes of GPs that Albert likes
[46:43] The 3 advantages GPs need to have
[55:02] How does Albert balance over- vs under-diligencing?
[57:15] Albert’s view on luck
[57:47] Albert the “consciousness expert”
SELECT LINKS FROM THIS EPISODE:
- Level VC
- Air Street Capital
- Emergent Ventures
- Work-Bench
- Gradient Ascent – Albert Azout’s blog
- Apple Macintosh
- Java (programming language)
- Time series
- Napster
- Social Network Analysis: History, Theory, and Methodology by Christina Prell
- Christina Prell
- Graph Theory by Reinhard Diestel
- Investigating Google’s Search Engine: Ethics, Algorithms, and the Machines Built to Read Us by Rosie Graham
- Babson College
- Zumba
- Collaborative filtering
- Complexity economics
- Spotify
- Anduril
- Andreessen Horowitz (a16z)
- a16z’s American Dynamism
- Shield AI
- Workshop
- Palantir
- Xerox
- Lex Fridman
- Lehman Brothers
- World Trade Center
- Jake Kupperman
SELECT QUOTES FROM THIS EPISODE:
“You have to have an understanding of the regime you’re in for you to make good decisions as an investor.” – Albert Azout
“Price reflects the inefficiencies of the market.” – Albert Azout
“What really matters is what you’re hearing around you. When you hear overly coherent narratives, that’s a big thing for me. And it happens in subcycles as well. […] But when people are behaving and making decisions based on narratives that are overly coherent, that’s a big sign. That’s a very social problem.” – Albert Azout
“What you want to see in a venture company which you’re looking for huge outliers, is you want to see increasing returns to scale. You want to see demand-side feedback loops, where you have very low marginal costs of distribution. And that requires mostly winner-take-all, or winner-take-most kinds of markets.” – Albert Azout
“You want to be pre-narrative. You want to position your capital in an area where the supply of capital increases over time and where those assets will be traded at a premium.” – Albert Azout
“Networks are more persistent than performance.” – Albert Azout
“Venture is simple but hard.” – Albert Azout
“We look for GPs who have one, a network advantage and two, a knowledge advantage – both of which have to be not redundant and economically important. And the third thing is the fund strategy itself. There’s a lot of nuances but there are two things that are important. One is that it has to be an outlier. […] It has to have the right construction for us. […] My second point is more important. It involves game theory, which is the competitive dynamics in the market. ” – Albert Azout