Tag: coinbase

Posted on

#unfiltered #52 Is This Citizen Journalism?

For any content creator, like myself, it’s incredibly easy to bifurcate ourselves along two paths.

  1. Everything you create is going to change the world. I am important.
  2. Nothing you create has any impact on the world around you. I carry no value.

Some voices over time have profound power on society. They hold the capacity to elicit widespread mimetic behavior. And many an author have snowballed down this thesis – for better or worse. There’s a saying that goes: You’re never as good as they say you are; you’re also never as bad as they say you are. Or maybe that was just a paraphrase of Lou Holtz‘s line: “You’re never as good as everyone tells you when you win, and you’re never as bad as they say when you lose.”

So, the flip side, the rise of citizen journalism has led more and more people to share transient perspectives of themselves or of the world in the form of social content. With the occasional goal of turning such fleeting outlooks into enduring memorabilia. Be it through Medium or TikTok, Substack or Instagram, YouTube or Clubhouse. A blog like this or a podcast. Yet when zooming out, we see the incremental impact of each additional voice is often drowned in the noise that populates the 21st century internet.

The truth, really, is somewhere in the middle. Where exactly? I don’t know. And frankly, it’s different for each genre and speaker out there.

Yet that doesn’t mean we should stop. At least for me, in knowing that I have positively impacted just one person’s life in a meaningful way is enough of a reason to continue. And if there’s a ripple effect beyond myself, then I am steps closer to having a life worth beyond a single century.

Brian Armstrong of Coinbase recently wrote via a blogpost. “The tools for distribution have become democratized, and every company can become a source of truth.” In a similar way, each individual – a company of one, a solopreneur in her/his own right – can become a source of truth. Each individual is a platform for the story we ourselves want to tell that isn’t misinformed or misaligned with post-production and traditional media incentives. Of course, it’s still up to us to have a head above two shoulders. Every individual can become a source of truth. But that doesn’t mean every individual is a source of truth. It’s up to our own judgment to think critically and act accordingly.

But let’s be honest. What I write isn’t journalism. It’s just a formulation of opinions and anecdotal observations over the course of time. While I try to approach my content from as much of an unbiased and informed perspective as possible, reality is I’m still missing something. In many ways, each of you is learning how I learn as I learn. Or maybe you’re already two steps ahead.

Photo by Brad Neathery on Unsplash

#unfiltered is a series where I share my raw thoughts and unfiltered commentary about anything and everything. It’s not designed to go down smoothly like the best cup of cappuccino you’ve ever had (although here‘s where I found mine), more like the lonely coffee bean still struggling to find its identity (which also may one day find its way into a more thesis-driven blogpost). Who knows? The possibilities are endless.

Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

Posted on

Expert + Reasonable + Crazy Idea = Crazy Good

The amazing Paul “PG” Graham came out with an essay this month on crazy new ideas. And the thing I’ve learned over the years, being in Silicon Valley, is if PG writes, you read. In it, one section in particular stood out:

“Most implausible-sounding ideas are in fact bad and could be safely dismissed. But not when they’re proposed by reasonable domain experts. If the person proposing the idea is reasonable, then they know how implausible it sounds. And yet they’re proposing it anyway. That suggests they know something you don’t. And if they have deep domain expertise, that’s probably the source of it.

“Such ideas are not merely unsafe to dismiss, but disproportionately likely to be interesting.”

I’ve written a number of essays about crazy ideas. Here. Also here. The last of which you’ll need to Ctrl F “crazy”, if you don’t want to read through all of it. And also, most recently, here. But that’s besides the point. The common theme between all of these is that crazy ideas are not hard to come by. Crazy good ideas are. Good implies that you’re right when everyone else thinks you’re crazy. When you’re in the minority. And the smaller of the minority you are in, the greater the margin on the upside. Potential upside, to be fair.

As investors, we hear crazy pitches every so often. David Cowan at Bessemer even wrote a satire on it all. For the crazy pitches, go to episode five. The question is: How do we differentiate the crazy ideas from the crazy good ideas? But as PG says, if it’s coming from someone we know is a subject-matter expert (SME) and they’re usually grounded on logic and reasoning, then we spend time listening. Asking questions. And listening. ‘Cause they most likely know something we don’t.

That was true for Brian Armstrong, who recently brought his company, Coinbase, public. He worked on fraud detection for Airbnb in its early days prior. And he knew he was getting into the deep end with crypto back in 2012. But he realized how unscalable crypto transactions were and how frustrated he was. Garry Tan, then at YC and part-time at Initialized, saw exactly that in him. A reasonable SME with a crazy idea. Garry just released an amazing interview between him and Brian too, if you want to tune into the full story.

What if some of the variables in the equation are missing?

But most of the time the founders you’re talking to aren’t subject-matter experts with deep domain expertise. Or at least, they haven’t left an online breadcrumb trail of whether they’re a thought leader or if they’re reasonable human beings. So subsequently, in the little time I have with founders in a first or second meeting, I look for proxies.

For proxies on domain expertise, I go back to first principles. What are the underlying assumptions you are making? Why are they true? How did you arrive at them? What are the growing trends (i.e. market, economic, social, tech, etc.) that have primed your startup to succeed in the market? Does timing work out?

To see if they’re “reasonable” under PG’s definition, I seek creative conflict. How do you disagree with people? If I brought in a contrarian opinion you don’t agree with, how do you enlighten me? How do you disagree with your co-founders?

In closing

To be fair, we’re not always right. In fact, we’re rarely right. On average, in a hypothetical portfolio of 10 startups, five to six go to zero. One to two break even. Another one to two make a 2-3x on investment. That is to say, they return to the investor $2-3 for every $1 invested. And hopefully, one, just one, kills it, and becomes that fund returner. Fund returner – what we call an investment that returns the whole fund and maybe more. Of course, every time a VC invests, they’re aiming for the fences every time. As a VC once told me, “it’s not about the batting average but the magnitude of the home runs you hit.” And even in those 10 investments, it’s a stretch to say that all of them are “crazy” ideas.

But the hope is that even if we’re wrong on the idea, we’re right on the people.

Photo by Àlex Rodriguez on Unsplash

Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

Proudly powered by WordPress