TFTLR: How to start a startup, 2) How to find non-obvious markets, 3) Berkshire's investment memo, and 4) Reading better
Thoughts for the Long Run, 8/5/22
Welcome back to TFTLR! Sharing from 30,000 feet - what a time to be alive!
Mental Model 1 - How to Start a Startup (Y Combinator): Another treasure trove of information from Y Combinator's archives, with an interview with Marc Andreessen, Ron Conway, and Parker Conrad. Highlights include 1) Great founders are leaders, product obsession, and outlier strengths, 2) Bootstrap for as long as possible, 3) Startups are a list of risks that get de-risked as they grow. There
Mental Model 2 - How to Spot and Build in Nonobvious Markets (First Round): Elad Gil's four principles to uncovering nonobvious markets include 1) Use first principles thinking (revisit fundamental assumptions and check the timestamp), 2) Anchor to real-world problems (especially those you have yourself), 3) Crack tough markets by being product-centric vs. customer-centric (listen to customer's problems and show them solutions, iterate on the product), and 4) Play on the fringe (find the fringe users doing things that may one day become mainstream)
Mental Model 3 - 2008 Investment Memo of Aerospace Manufacturer (Berkshire Partners): Fascinating investment memo from 2008 by Berkshire Partners in the acquisition of Warburg Pincus' stake in a pubic aerospace component manufacturer. The memo lays out the fundamental drivers of the business: 1) Aftermarket is the majority of the business so revenue is driven by Revenue Passenger Miles, 2) Pricing and Productivity drive margin, and 3) Inorganic growth.
Personal Development - Reading Better (Farnam Street): Retaining more information from reading involves 1) Quitting books that aren't good, 2) Planning what level of reading you want, 3) Ski first then dive deep, 4) Choosing great books (generally, older books pass the test of time), and 5) Taking notes. I personally speed read, highlight, and summarize, but the overall principle of creating a system of identifying great books and distilling key insights resonates!
Have a great weekend!
Aimun