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Jul 31 2019

Externalities: Calculating the Hidden Costs of Products

Externalities let you account for the true cost of products by including hidden costs
What’s a mispriced externality? You mentioned it on a previous episode. An externality is where there’s an additional cost imposed by whatever product is being produced or consumed, that’s not accounted for in the price of the product. This can happen for many reasons. Sometimes you can fix it by putting the cost back into the price. More

Jul 29 2019

Net Present Value: What Future Income Is Worth Today

See what future income is worth today by applying a discount to its future value
Let’s talk about net present value (NPV). Net present value is when you say, “That stream of payments I’m going to get in the future—what’s it worth today?” Here’s a common example: You’re joining a startup and getting stock options, and the founder says, “This company is going to be worth $1 billion, and I’m giving you 0.1% of the company; therefore, you’re getting $1 million worth of stock.” More

Apr 5 2019

The Foundations Are Math and Logic

Mathematics and logic are the basis for understanding everything else
Foundational things are principles, they’re algorithms, they’re deep seated logical understanding where you can defend it or attack it from any angle. And that’s why microeconomics is important because macroeconomics is a lot of memorization, a lot of macro bullshit. As Nassim Taleb says, it is easier to macro bullshit than it is the micro bullshit. More

Jan 15 2016

American Spring

A one party system ran the United States, and the United States ran the world. The US had checks and balances – governing required consensus, and the people were freed from kings. To protect speech, the framers left out a rule against conspiracies to monopolize the vote. Political parties formed to monopolize the vote. More
Jan 15 2016

Dec 1 2010

Funding Markets Develop in Reverse

I co-founded AngelList because I was tired of saying no to entrepreneurs. I wanted to say instead, “yes, we can help you get funded.” So, it’s especially disappointing when we get promising startups pitching on AngelList from remote locations. Some we’ve managed to get funded – including ones in Canada and Europe. More
Dec 1 2010

Apr 22 2010

Why (Private) Investors are Herd Animals

It’s a common complaint – venture investors are driven by what other investors think, and therefore lack imagination and spine. There’s some truth to it – it is human nature, after all, to look for social proof and authority when making decisions. However, that’s not the whole story. In public markets, Investors make their decisions to invest in parallel, and in theory, most of the relevant information about a company is publicly disclosed, by law. More
Apr 22 2010

Mar 6 2008

Charlie Munger on Getting Ahead

We get these questions a lot from the enterprising young. It’s a very intelligent question: You look at some old guy who’s rich and you ask, “How can I become like you, except faster?”; Spend each day trying to be a little wiser than you were when you woke up. Discharge your duties faithfully and well. More
Mar 6 2008

Apr 2 2007

Introducing: Venture Hacks

I know I haven’t posted recently, but I have been busy! Nivi and I are launching a new site called Venture Hacks, an entrepreneur’s guide to hacking Venture Capital. It’s a “tell all” site that helps entrepreneurs get on an even footing with their better-informed counterparts when negotiating an investment. More
Apr 2 2007

Jul 12 2006

Why We May Think

When I was young, I thought the point of the body was to protect the brain. Now I realize it’s the other way around. The brain exists to protect the body. There are two kinds of animals – those who move and those who don’t. Animals who don’t move count on a stable and predictable environment and replicate like crazy to compete for scarce resources, and to outlast environmental changes. More
Jul 12 2006
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