The Power Law: Venture Capital and the Making of the New Future

Silicon Valley wasn’t created in the 1950s by government intervention — which favored neither California nor Massachusetts at the time. It wasn’t just northern California’s counterculture or Stanford. Its ability commercialize basic products was the interweaving of egalitarian openness and capitalistic competitiveness that venture capital created.

So argues The Power Law: Venture Capital and the Making of the New Future, a 2022 book by economics journalist Sebastian Mallaby. What early Silicon Valley culture did have was a true ecosystem of people gossiping and swapping ideas and sharing. It reminds me of why free speech emerged in Europe.

The book is a history of venture capital, though it adds nuance to another book I read that is a pure history. This book gets its title from the the power law concept, in which you lose only 1x your money but if you miss a deal you could lose out on 10x or 100x your money. That fuels big bets.

Mallaby’s book is exhaustive. I appreciated its deep history, others might not. The book does feel full of survivorship bias, of war stories from successful people (mostly men) describing why they were successful. Quirks of the writing come up — he uses the subjunctive a lot like “in 1986, he had offered,” and sprays the term “Presently” all over the place — but I mightily appreciated the book. Give it a try.

I share my notes below for future reference.

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VC: An American History

The American venture capital model is rooted in this country’s early business climate, and has been exported around the world.

For example, New England whalers came to dominate their 19th-century industry through their innovation of pooling capital and syndicating their risk across many expeditions. This established the concept of long-tail, led to the basic funding model that later developed in modern venture capital and other small innovations.

That’s a central theme of the 2019 book by Tom Nicholas called VC: An American History. The book is a thorough review of the journey that led to the venture capital and private equity of today. I enjoyed it enough to recommend it to anyone interested in business, economics and the history of financial systems.

Below I share my notes from the book for future review.

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The Value of Everything

The way we count how big our economy is gets determined by a set of changeable decisions. Those decisions have changed over time, and they can change in the future.

That is a major theme from the 2017 book The Value of Everything by economist Mariana Mazzucato.

Below I share my notes from reading the book, which are for my own purposes for review later.

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Notes from ‘The Hard Thing About Hard Things’ by Ben Horowitz

Prominent investor Ben Horowitz’s 2014 book ‘The Hard Thing about Hard Things’ is among the seminal business philosophy books from this era of Silicon Valley entrepreneurship.

Horowitz is half of the founding team of Andresson-Horowitz, an iconic Sand Hill Road software-focused venture capital firm. His work and perspective has influenced today’s funding and startup climate, and so I finally dug into the book.

I enjoyed it and took away several insights. As per my habit, find some of my notes below.

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Don’t try to be Silicon Valley: a SXSW panel

I moderated a panel on the topic of cities branding their entrepreneurship ecosystems.

In case you haven’t heard my ranting before: I think it’s silly for cities to talk about being the Silicon Valley of anything. Find my rants here and here and here. Funny enough, I was leading that panel at SXSW, another important vibrant national tradition I don’t want cities to try to copy.

Below are some questions I asked and a wrap video from the Amplify Philly house, where I did the panel.

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Here are a few things I told a Young Professionals Council

Last month, I was the featured speaker in a regular CEO series hosted by the Young Professionals Council of the Chamber of Commerce of Greater Philadelphia.

More than 40 people kindly came out to hear me be interviewed. We talked about Technically Media, tech and impact trends and journalism. (Yes, there was an Amazon HQ2 question: I said I was betting on the D.C. market but thought Philadelphia had a strong enough offering that I refuse to be surprised if chosen).

Below I share a few other thoughts I shared, mostly prompted by audience Q&A.

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