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💸 What’s Missing in the Investment World

Invest Like The Best

Photo by Randy Fath / Unsplash

Table of Contents

Host: Patrick O'Shaughnessy
Guest: Garry Tan | Founder & Managing Partner | Initialized Capital
Category: 💸 Venture Capital

Podcast’s Essential Bites:

[3:04] “Yuri Milner of Digital Sky […] [was once] saying, one of the reasons why he invested in Facebook […] relatively early […] was that he came to a realization that something like 10% of the world's energy goes to data centers, which is also about the ratio that the brain consumes in the human body. And I don't know if that's true or not, but I thought that was very interesting. And all the world's people and all of the world's resources are coming together, being organized around a nervous system that is basically the internet and software.”

[3:50] “Ever since I heard that, I've been seeing that absolutely everywhere. And I think now, if you look at every business that we like to fund or every business that's growing very quickly and reforming the way resources are delivered, or all transactions are being sold, you can extend it all the way to crypto, what's happening is that it's that story, not just at the global brain level, […] [but] now what we can do, and what you and I can do is think about it at the local level. […] No matter what organization and how old that organization is, every one of those organizations is reorganizing into a local brain.

[12:42] “[The investing world] is really about attention. I want to go back to this idea of the wrapping paper versus the gift. And having been at YC and then now running a multi billion dollar fund, the craziest thing to me is seeing that we don't need to necessarily do many hour pitches per se. YC was able to make something very valuable just in the 10 minute interview. Obviously, a lot of people realize that whether a pitch will work or not, is basically not the sum total of the 60 minutes, it tends to be the first 5 or 10 minutes. […] One of the things that I learned from Paul Graham the most […] is the hard part about playing chess is being smart, it's not learning how the pieces move. So you need to look at companies at a much more fundamental level. That is not the gift wrapping. You need to look at the gift itself.

[17:56] “The system's level thing is that we actually have to be very fast about getting back to people. So being able to schedule an […] partner in 48 hours or less is actually really important. And being able to make an investment decision with a group process without short circuiting due diligence within 48 to 72 hours. Just speed is important, because speed kills deals. […] As Initialized has grown in prominence, it's very easy to rest on your laurels and say, well, they should totally take our money because we're so and so and it actually requires constant gardening there. […] And the second we think that someone's going to wait for us, that's us depriving ourselves of making the best possible product. That's a fast path to being not relevant at all, in a matter of years, really.”

[24:38] “In a world where there's infinite capital, the real scarcity is actually trust.

[35:37] “I saw a tweet yesterday in the crypto world that said, we don't need more DAO tools, we need more DAOs. So everyone in their mother is trying to make new tools to help people make decentralized autonomous organizations. But we actually really need more of the organizations first. We don't need more picks and shovels. That's not the hard part. People don't even know how to do it yet. That's always the funniest thing, people over-index on what is hot is the tricky thing.

Rating: 🚀🚀🚀🚀

🎙️ Full Episode: Apple | Spotify | Google (Original Title: "Garry Tan - Unwrapping the Gift")
🕰️ 1 hr | 🗓️ 03/08/2022
✅ Time saved: 58 min