May 2012
2 posts
The New Era of the Fat Startup and Lessons from...
There’s been plenty of talk about another bubble lately and comparisons to the dot com bubble have been made. I’ve been reading the autobiography of Henry Ford, “My Life and Work,” and found some interesting observations about the automobile bubble at the beginning of the century when hundreds of auto startups were launched in Detroit and around the world.
Here are some...
The History of Record Breaking Companies to $100B...
The history of record breaking companies to $100B market cap shows that keeping up an impressive growth in valuation is hard to do.
Microsoft was the fastest to $100B in its day. It took them 25 years to reach the staggering figure. After being flat for years, their market cap has lingered around $260B. That is about a 6% gain in market cap per year over 16 years (although returns to...
April 2012
3 posts
Budget Constraints Improve Product Quality
Doing quarterly reviews of our companies tonight, one key lesson has emerged. Budget cuts and headcount reductions forced one of our companies to focus exclusively on the quality of the product as a means of attracting users rather than spending on unproven marketing channels. This has led to increases in activity and new user registrations to record levels - with zero marketing spend. How ironic....
The King of Spectacular Returns
One of the highlights of this year’s NVCA meeting was seeing Mike Markkula interview Arthur Rock.
Rock’s “most fun deal” was Scientific Data Systems, his first big exit. He didn’t get into details about this spectacular investment so I did a bit of research.
SDS was founded in 1961, the same year that Arthur Rock moved to California to start Davis & Rock. In...
They Need 34 More Instagrams
It was interesting to read Ben Horwitz’s blog post about Instagram.
http://bhorowitz.com/2012/04/22/instagram/
312x is certainly a spectacular return in 2 years. Now, compare that against $2.7B raised so far.
http://bhorowitz.com/2012/01/31/why-has-andreessen-horowitz-raised-2-7b-in-3-years/
Simple math says, after netting $78M on $250K, the funds of Andreesen Horowitz will need 34...
March 2012
1 post
“People are never alone now… We make them hate solitude, and we arrange...”
– Brave New World by Aldous Huxley, published in 1932 (72 years before the launch of Facebook!)
September 2011
1 post
“A great institution is the lengthening shadow of a man”
– Ralph Waldo Emerson
August 2011
1 post
“During a time when people are selling stocks in near panic mode due to economic...”
– Warren Buffett, Berkshire Hathaway 1994 Annual Report
July 2011
2 posts
“A contrarian approach is just as foolish as a follow-the-crowd strategy. What’s...”
– Warren Buffett, 1990 Berkshire Hathaway Annual Report
“Ben Franklin said that an ounce of prevention is worth a pound of cure. That...”
– Charlie Munger, Morning with Munger in Pasadena, California, July 2011
June 2011
3 posts
“The supreme irony of business management is that it is far easier for an...”
– Warren Buffett, Berkshire Hathaway Annual Report, 1988
The real heroes
So much of what’s talked about and what is hip in the tech industry these days is about starting companies. The hard part - and the most rewarding part - is in building companies. Entrepreneurs who build great companies are “entrepreneurs” for a very short span of their careers. It takes years, even decades, to build a great company. They are in it for the long haul through many...
“Our experience has been that the manager of an already high-cost operation...”
– Berkshire Hathaway Annual Report, 1978
January 2011
1 post
Warren Buffett on market psychology
Interesting that Buffett wrote this in 1958 (in letter to investors of his hedge fund before he took over Berkshire Hathaway). Buffett still going strong while others blew themselves up through just about every market cycle over the past 5+ decades.
During the past year; almost any reason has been seized upon to justify “Investing” in the market. There are undoubtedly more...
November 2010
1 post
First time using Tumblr. Sending in this post via email. Let’s see if it works. Nice to be able to say something in more than 140 characters. I’ve seen some tweets recently in which Warren Buffett is misquoted. The original quote is from one of his annual reports: “When management with a reputation for brilliance tackles a business with a reputation for poor fundamental...
