What We’re Reading
Here are a few good articles the Collaborative Fund team came across this week.
Shelter
Big shifts in the housing market:
In a shift, new households are overwhelmingly choosing to buy rather than rent. Some 854,000 new-owner households were formed during the first three months of the year, more than double the 365,000 new-renter households formed during the period, according to Census Bureau data. It was the first time in a decade there were more new buyers than renters, according to an analysis by home-tracker Trulia.
Evaluation
Schools are getting rid of grades:
Think grade inflation has made grades less meaningful?
A consortium of 100 elite prep schools agrees. But rather than impose stricter grading curves, these schools plan to eliminate grades altogether.
“People are nonstandard,” says D. Scott Looney, head of Cleveland’s Hawken School and founder and board chair of the new Mastery Transcript Consortium. “They grow and evolve in the world in nonstandard ways. Distilling that down to a simple common number like a GPA shaves off a lot of humanity in that journey.”
Distribution
Stocks are hard:
Professor Bessembinder found that a mere 4 percent of the stocks in the entire market — headed by Exxon Mobil and followed by Apple, General Electric, Microsoft and IBM — accounted for all of the net market returns from 1926 through 2015. By contrast, the most common single result for an individual stock over that period was a return of nearly negative 100 percent — almost a total loss.
Learning
Lessons from a first year in VC:
One of the most important things I’ve learned over the past year is that it’s okay to not know everything. It might seem obvious, but out of the fear of seeming “dumb,” most tend to ignore this advice.
I can’t begin to tell you how many times, I’ve told founders: “I’m not quite sure I understand, do you mind explaining it a bit further?” Every single time, founders comment how thankful they are that I asked. Most VCs don’t ask for clarity and use their lack of understanding as an excuse to pass.
Standing apart
The importance of brand:
It’s logical that cash conscious startups should limit their investment to measurable marketing tactics. But as startups scale and as technologies commodify faster and faster, branding building investments should become a key part of the marketing efforts of the business.
Ultimately, the brand may become half the value of the company and the true differentiator in the market place. That’s nothing to sneeze at.
Trust
Josh Brown has a monster piece on American Gods:
These are not brand new companies, and in many cases they are not selling a brand new product. Rather, they are institutions that have earned the trust and devotion of millions of customers, shareholders, employees and managers. We believe in their products and services, we have faith in their durability, their competitive advantages, their vision of what the future looks like and how they’ll fit into it.
En masse, we have decided that, come what may in Washington, these are the entities that will find a way to thrive. They will not merely survive the future, they will be responsible for shaping it.
Have a good weekend.