Venture Landscape

  • Thoughtful analysis of the venture landscape given the current state of public markets from Redpoint ventures.
  • The background is – public high performing SaaS firm valuations have fallen below their 10 year average now (see chart).
  • Past public market corrections led to 10 quarters of decline in venture dollars invested of varying severity. The great recession, for example, saw a 30% fall.
  • Currently many companies in private markets (particularly at late stage) are in “price discover” mode in fundraises with everyone trying to figure out market price – rounds are taking longer to get done and “willingness to pay” spreads are wide

Recession Watching

  • New home sales is a great variable to watch for recessions.
  • When the YoY change in New Home Sales falls about 20%, usually a recession will follow.
  • Any Fed tightening cycles that cause recessions show up here first.
  • There are exceptions to this rule – usually due to strong spending on defence or non-residential investment holding the economy up. The pandemic also distorted the series.  
  • Currently this indicator isn’t flashing red.

The Technology Bribe

  • Nearly 50 years ago, long before smartphones and social media, the social critic Lewis Mumford put a name to the way that complex technological systems offer a share in their benefits in exchange for compliance.
  • This “bribe” makes it clear that “this is not an offer of a gift but of a deal
  • “the bargain we are being asked to ratify takes the form of a magnificent bribe.”
  • A fascinating theory and tool to understand the current world.
  • The danger, however, was that “once one opts for the system no further choice remains.”

Terry Smith

  • Long profile of Terry Smith of FundSmith.
  • The fund is having a tough start to 2022, but as he says himself.
  • The analogy I use is that of the Tour de France, no cyclist has won every stage and they never will. You can’t be a sprinter and win the time trial, they require different physiques. Several times the overall race has been won by someone who didn’t win any of the individual stages. You need to be the best overall, and that’s what we are trying to achieve.

Are you Smart enough to work at Google?

  • 10, 9, 60, 90, 70, 66 … what is the next number in this series?
  • Give it a try.
  • This is a question asked during an interview at Google.
  • So is this one “You are shrunk to the height of a penny and thrown into a blender. Your mass is reduced so that your density is the same as usual. The blades start moving in sixty seconds. What do you do?”
  • Both of these interview questions are taken from this brilliant book which is about difficult interview questions at top companies.
  • Once you tried those questions – hit this preview link for the answers.

Another 52 Things List

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