01
Jun 18

Cheat Version of @Naval’s epic thread on Twitter…

Naval Ratikant, the founder of angel list, is exceptional at condensing and dispersing what he has learned in life.

Yesterday, Naval published a reasonably epic thread on Twitter. As I wanted to share this with a friend who doesn’t use twitter, here is the full text at a glance:

How to Get Rich (without getting lucky)

Seek wealth, not money or status. Wealth is having assets that earn while you sleep. Money is how we transfer time and wealth. Status is your place in the social hierarchy.

Understand that ethical wealth creation is possible. If you secretly despise wealth, it will elude you.

Ignore people playing status games. They gain status by attacking people playing wealth creation games.

You’re not going to get rich renting out your time. You must own equity – a piece of a business – to gain your financial freedom.

You will get rich by giving society what it wants but does not yet know how to get. At scale.

Pick an industry where you can play long term games with long term people.

The Internet has massively broadened the possible space of careers. Most people haven’t figured this out yet.

Play iterated games. All the returns in life, whether in wealth, relationships, or knowledge, come from compound interest.

Pick business partners with high intelligence, energy, and, above all, integrity.

Don’t partner with cynics and pessimists. Their beliefs are self-fulfilling.

Learn to sell. Learn to build. If you can do both, you will be unstoppable.

Arm yourself with specific knowledge, accountability, and leverage.

Specific knowledge is knowledge that you cannot be trained for. If society can train you, it can train someone else, and replace you.

Specific knowledge is found by pursuing your genuine curiosity and passion rather than whatever is hot right now.

Building specific knowledge will feel like play to you but will look like work to others.

When specific knowledge is taught, it’s through apprenticeships, not schools.

Specific knowledge is often highly technical or creative. It cannot be outsourced or automated.

Embrace accountability, and take business risks under your own name. Society will reward you with responsibility, equity, and leverage.

The most accountable people have singular, public, and risky brands: Oprah, Trump, Kanye, Elon.

“Give me a lever long enough, and a place to stand, and I will move the earth.” – Archimedes

Fortunes require leverage. Business leverage comes from capital, people, and products with no marginal cost of replication (code and media).

Capital means money. To raise money, apply your specific knowledge, with accountability, and show resulting good judgment.

Labor means people working for you. It’s the oldest and most fought-over form of leverage. Labor leverage will impress your parents, but don’t waste your life chasing it.

Code and media are permissionless leverage. They’re the leverage behind the newly rich. You can create software and media that works for you while you sleep.

An army of robots is freely available – it’s just packed in data centers for heat and space efficiency. Use it.

If you can’t code, write books and blogs, record videos and podcasts.

Leverage is a force multiplier for your judgement.

Judgement requires experience, but can be built faster by learning foundational skills.

There is no skill called “business.” Avoid business magazines and business classes.

Study microeconomics, game theory, psychology, persuasion, ethics, mathematics, and computers.

Reading is faster than listening. Doing is faster than watching.

You should be too busy to “do coffee,” while still keeping an uncluttered calendar.

Set and enforce an aspirational personal hourly rate. If fixing a problem will save less than your hourly rate, ignore it. If outsourcing a task will cost less than your hourly rate, outsource it.

Work as hard as you can. Even though who you work with and what you work on are more important than how hard you work.

Become the best in the world at what you do. Keep redefining what you do until this is true.

There are no get rich quick schemes. That’s just someone else getting rich off you.

Apply specific knowledge, with leverage, and eventually you will get what you deserve.

When you’re finally wealthy, you’ll realize that it wasn’t what you were seeking in the first place. But that’s for another day.

 

For further reading, you may enjoy this:
https://www.fs.blog/naval-ravikant/


16
May 18

The fast track to become a startup founder…

The hype curve for startups shows no signs of slowing down.
Every corporate giant like Daimler claims to behave like a startup these days.
Corporate ‘venturing’, ‘acceleration’, etc seem to be at an all-time high.

As always, there is an abundance of consultants, observers, bloggers talking about startups. But sadly, it seems to me that there are not more people who actually have any startup experience.

If you want to become a startup founder:  Stop reading about startups. Stop going to conferences. Stop working with an accelerator.
Work in a startup instead.

For this reason, I don’t offer any positions within our venture company Density Ventures, but we always have one or two Entrepreneurs in Residence positions at our operating companies.

Here is our permanent job posting for Entrepreneurs in Residence in FLIO’s Hamburg office.

 


06
May 18

Reflecting this year’s Q&A with Warren Buffett in Omaha

As Warren Buffett has become mainstream, it is now easy to confuse the forest and the trees of the headlines. I made my first trip to the annual meeting of Berkshire Hathaway in 2008 and have been to the event seven times in total. Going back to Omaha is not so much about learning something new, but to be reminded of the important bits that I forget in between.

Highlights from the livestream.

One of the  payoffs of going to Omaha and observing how Warren and Charlie make it through six hours of live Q&A: You get an understanding that the power of your brain does not diminish as long as you exercise it.

The meetings are now being streamed live: Yahoo Finance. The full coverage is seven hours. Few people will make it through, here are a couple of highlights.

16:00 mins: the Prerecorded interview with Warren, talking about bitcoin, and wanting to be remembered as a teacher. More than his track record, his desire to teach makes listening to Warren much more valuable than listening to the many self-proclaimed value investors and often imitators.

50:00 min: Warren gives one of his great lectures on investing. Worth watching the newspaper clippings and then how he explains what would have become out of 10,000 $ invested in the S&P in 1942, when bad news was at its peak, as opposed to buying gold.

Key takeaways from this year

In content, I did not get as much out of it as in some previous ones after the financial crises. This time, I noted some long-term optimism about China as a system. Also notable: a surprising absence of any political agenda, even when pushed by questions from the audience. Buffett insisted on separating his personal views from the business.

It is worth to invert: What did not happen at this meeting nor at any other: Warren Buffett does not talk about succession plans. More generally, as I started digging deeper into this in recent and earlier interviews and speeches, I noted the many references how much he enjoys painting his own painting. But also references to people who never stop working like the CEO of flight safety, who ran the company at age 85, or his anecdotes about Rose Blumkin, who died at age 104, after stopping to work for Nebraska Furniture Mart at 103. You can also see the reference in the “Berkshire System” as laid out in Charlie’s letter to Berkshire shareholders here: There is no age limit for managers.

As now there is way too much about Buffett and Munger (any news outlet do their own ill reflected click baits, there are more than 100 books about Munger), let me list some of my top references:

The best Interviews and speeches:

The essence of Charlie Munger and Warren Buffett  in writing:

Many of the books about Buffett and Munger obscure more than they reveal: As both are very good communicators, it is always a good idea to read the source:

  • The essence of Berkshire Hathaway:
    Special Letters to the Shareholders, the present, the past and the future As they’ve written both their versions, you get two very different approaches.
  • The essence of Charlie Munger. Charlie has been quoted and quoted again, and I think his unique approach to critical thinking is the consistent theme. This is best visible in his 1995 speech The psychology of human misjudgement, which is also the centrepiece of his own book “Poor Charlie’s Almanack”.
  • The essence of Warren Buffett is more difficult to pin down into one core piece. But in his original writing: The Superinvestors of Graham and Doddsville from 1984. Buffett essentially proves that value investing works. This was before value investing became super hyped. Since then Buffett has evolved many times over.

Some of the blogs that I enjoy most:

  • Farnam Street Shane Parrish fs.blog
  • 25iq by Tren Griffin: 25iq.com

15
Apr 18

Investing in deep tech in Toronto

For two years now, I have been involved in the startup scene in Toronto, centred around but not limited to Creative Destruction Lab (CDL). Toronto, together with Waterloo is an amazing technology hub, which is super successful in AI but also other deep tech endeavours, ranging material science to biotechnology.

My experience as a mentor at CDL is so far amazing, and I remain humbled to be in such an impressive group of advisors. CDL is unique in its approach: Minimizing the time it takes up from founders and maximizing value add by bringing them together with a broad range of experienced entrepreneurs, scientist and investors. CDL gives startups regular exposure to the most prominent VCs from Silicon Valley including Data Collective, Highland Capital, Khosla Ventures and Google Ventures.

After two years now, I am surprised that I have invested in approximately 12 early stage tech startups in the AI and deep tech space. This contrasts strongly with the number of investments in Europe: Where I invested, it was purely because I believed in exceptional founders.The founders I work in Canada with are absolutely stellar. Being sector agnostic helps: My sectors include now health, industrial, infrastructure. Being able to share my experience in hyper-competitive markets, working with venture capital, scaling sales, growing internationally, while at the same time learning from a group of amazing entrepreneurs is very rewarding. What is more, I believe that the returns of these investments will be very good. Early stage investing is always risky, but at least half of my very young early-stage companies already have received follow-on investments from much larger funds, a very good indicator for me.

(above: view from Toronto’s Billy Bishop Airport, returning from a day trip to Montréal.)

 


09
Jan 18

“Businessman & Investor” – Buffett.

“I am a better investor because I am a businessman, and I am a better businessman because I am an investor” – Warren Buffett

I don’t aspire to compare myself to the man. But his view does match my personal experience. As a founder, I’ve sometimes been criticized by VCs that I regard my time in startups too much as an investment. I am proud of this. And I am happy with the fact that I can support founders with my operational experience.  Both have worked so well for me. I am an entrepreneur and an investor. Interacting with new founders has been amazingly productive also for my own “flagship” business, now FLIO.

The difficulty lies in one word: focus.

2015: Active involvement in 3 companies I have founded.

In 2015, I was a happy shareholder in 9flats, which I had founded, in avocadostore, which I had co-founded, and FLIO, experts in digital airport experience, which I founded in 2015.  Fortunately, the 2 companies that I did not run myself were in very capable hands. This was a key component in a happy life back then (Thank you Mimi & Roman).

2017: Focus on FLIO, and “other bets”

At the end of 2016, I had divested of my shares in 9flats when we had acquired Wimdu which we later sold to Wyndham hotels. Early 2017, more much more reluctantly, I sold my shares in the growing eco market-place avocadostore. This enabled me to focus much more on FLIO.

FLIO is a very big bet, which can yield phenomenal results for all stakeholders if it pays off: Passengers value guidance through airports, and if we work directly with many airports, we will be able to give them a better passenger experience.  In October 2017 we announced that we have agreed to funding from Avi Alliance, an investor in airports. (Update April 2018, FLIO was accepted to Plug and Play Silicon Valley).

In early 2017, I started to invest more broadly in early stage deep tech through my vehicle Density Ventures. While I had only invested in 3 startups in the past 10 years, I have invested in 6 companies in 2017 alone. Why I started to do this and how it evolves, I hope to detail here in my next post. For now, focusing on one major bet, while adding several small bets seems to work better for me than spreading myself across three major shareholdings.