What We’re Reading

Here are a few good articles the Collaborative Fund team came across this week.

Odds of success

Bill Gurley talks about his decision to pass on Google when it was a startup:

I go back, and the learning is that if you have remarkably asymmetric returns you have to ask yourself, ‘how high could up be and what could go right?’ because it’s not a 50/50 thing. If you thought there was a 20% chance you should still do it because the upside is so high.


Paul Graham uses a great analogy to define an edge:

Suppose you are a little, nimble guy being chased by a big, fat, bully. You open a door and find yourself in a staircase. Do you go up or down? I say up. The bully can probably run downstairs as fast as you can. Going upstairs his bulk will be more of a disadvantage. Running upstairs is hard for you but even harder for him. What this meant in practice was that we deliberately sought hard problems. If there were two features we could add to our software, both equally valuable in proportion to their difficulty, we’d always take the harder one. Not just because it was more valuable, but because it was harder. We delighted in forcing bigger, slower competitors to follow us over difficult ground. Like guerillas, startups prefer the difficult terrain of the mountains, where the troops of the central government can’t follow. I can remember times when we were just exhausted after wrestling all day with some horrible technical problem. And I’d be delighted, because something that was hard for us would be impossible for our competitors.

Backed up

London has taken huge steps to reduce traffic by pricing out commuting cars with steep tolls. How has it done?

In 2003, the first year of the charge, vehicles moved at an average of 10.9mph in the zone, up from 8.8mph the previous year, according to figures from traffic analysis company Inrix. In 2015, the average speed was 8.3mph. … “London is close to proving that you can take away all the private cars and still have chronic congestion,” says Tony Travers, professor of local government at the London School of Economics.


Here’s a great profile of Sam Altman:

Graham has written that the two founders he most often invoked when advising startups were Steve Jobs and Altman: “On questions of design, I ask ‘What would Steve do?’ but on questions of strategy or ambition I ask ‘What would Sam do?’ ” Founders in a crisis call Altman first, relying on his knack for high-speed trading in the Valley’s favor bank—“I called Brian and got it sorted out,” he’ll say, referring to Brian Chesky—and his ability to see people as chess pieces and work out their lines of play. One YC founder told me, “Since Sam can see the future, we want him to tell us what’s coming.”

Building stuff

This is one of the most important points about manufacturing in America:

From an economic perspective, however, there can be no revival of American manufacturing, because there has been no collapse. Because of automation, there are far fewer jobs in factories. But the value of stuff made in America reached a record high in the first quarter of 2016, even after adjusting for inflation. The present moment, in other words, is the most productive in the nation’s history.


Wisdom from Ben Carlson:

One of the most dangerous places to be as an investor is when you’re the smartest person in the room. Smarts, when not combined with a heavy dose of humility, can get you into trouble because it can lead to overconfidence. Overconfidence can lead to overthinking which can be a deadly combination when managing money.

Have a great weekend.