Through Naval, I discovered the term "Curation Businesses" which describe things like Universities, Accelerators, and VC firms

These businesses (think top accelerators, universities, etc) attract the best people in the world to apply for them.

Their alumni then go onto be immensely successful, which improves the flywheel and further attracts the best people at an even bigger scale.
It’s unclear to what extent these institutions actually help the people become more successful beyond the credential that they bring.

Their brand serves as a credential for the people who join, which helps them convince other recruits/customers/investors to get involved.
Alumni are incentivized to promote the credential widely and speak highly of it, as to strengthen their own status accordingly.

Their near blind loyalty is rational: If they invested a lot to get that credential, and it becomes diluted, then they wasted their time and money.
Which is why once you get curation businesses off the ground, they are very difficult to disrupt, because everyone has incentive to keep the whole charade going.

Like money, a credentials is an illusion that everyone who has it or wants it is incentivized to keep perpetuating
To build curation businesses, you need some hack to get the best people to join. After you do, they’ll graduate and then be role models and the fly wheel will begin. Until then, It’s truly fake it til you make it

Hack = align w/ already incredible brands, or have a new approach,
If you’re building a curation business, the main (if not only) moat you have is brand.

Your biggest specific vulnerability is alumni NPS—

If it’s strong, the business is unbeatable. If it’s weak, the entire edifice is at risk.
There are a few ways to have high alumni NPS.

1/ Give someone their start or otherwise be an inflection point. Believe in them before others do and they'll be immensely grateful:

2/ Be legible (cadence, credibility, curriculum) so that people have similar experiences and can bond over them.

Legibility provides social context for other people across cohorts (even years apart) to build meaningful relationships.

3/ Be so curated that every person is legit or provide so much value that the best join

The tradeoff is "signal" vs "utility"

Signal itself has utility, but diminishing returns. You want to increase utility as much as possible without sacrificing signal.
The scalable curation businesses start with signal & then use signal to build utility

First YC cohort was super high signal (in retrospect at least!) & they used that to justify scaling 200x ("statistically, one of the companies can be the next Airbnb!")

One reason why this works is that startups is a power law game, and the most important thing is capturing the winner.

Also, given the best unicorn rate among VCs is 5%, it's unclear what signal means. Thus better to make more good bets than "sure" ones.

Why can’t 100K or 1M students a year attend Harvard?

It's partly true that credential quality is tied to its exclusivity or its size—

But it's also true that credential quality is tied to the magnitude of its biggest outcomes

Keeping same quality bar, Harvard should 10-100x.
Focus too much on utility (get too big), and you kill the signal.

Focus too much on signal itself without bolting on utility, then it becomes like Harvard — people know it has no purpose other than the signal and that itself weakens the signal.

It becomes a bubble.
Certain communities have similar dynamics as nightclubs: You get the VIPs in the door that'll bring everyone else, & everyone else brings the $ (or the data, or the hires) that make the community more valuable for the VIPs. If you do it right, you'll build strong network effects.
Curious to hear ideas on how to build curation businesses. We have very few disruptive new universities, accelerators, or Paypal Mafias, which means we understand very little about how to build curation businesses.
By this message I don't mean that they don't add value. It's just unclear whether signaling is 20% or 50% etc of the value. The ones that succeed will offer the most value separate from their signal.

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More from @eriktorenberg

15 Sep
Thrilled to announce the On Deck Podcast Fellowship to help people start or grow their podcasts.

Having a podcast over the last 5 yrs has changed my personal & professional life, and I want more people to benefit from starting one.

It's still super early innings for podcasting.
How has podcasting been transformational?

- Made friends via guests (e.g. Tyler Cowen) but also via listeners. It’s a way to find all the other people like you out there.

- Learned a lot. Each podcast is a forcing function to learn enough about a topic to not look dumb.
You should start a podcast if:

- you want to build a strong network and/or showcase your strong network
- you want to build expertise and/or showcase your expertise
- you want to promote a specific topic or way of thinking
- you’re insatiably curious

Read 9 tweets
15 Sep
Favorite startup frameworks I've discovered on the following topics:

- Recruiting
- Fundraising
- PM-fit
- Community
Recruiting: It's important to get the first 10 hires right b/c each employee will replicate themselves 10 times. Take ur time

Since you can't compete w/ Google, you want to find ppl Google isn't chasing after but have even more talent & grit

Like drafting Tom Brady in 6th round
Talent arbitrage opportunity:

Find people who are excellent at their craft but struggle at self-presentation or public speaking.

Others will write them off before seeing what they have to offer—and you get to harness them for their skill & either hide or improve that weakness.
Read 12 tweets
12 Sep
To be sure, egalitarianism has been eating the world ever since Jesus and, more broadly, the great inversion from glorifying the conquerer to glorifying the martyr.

But now egalitarianism is accelerating.

Invisible hand of egalitarianism: If there’s an opportunity for egalitarianism, someone will seize it.

Software will eventually win out there unless something is ACTIVELY preventing it.

Egalitarianism will eventually win out there unless something is ACTIVELY preventing it.
Read 8 tweets
8 Sep
Angel investing is high status b/c it implies wealth, special relationships, & judgement.

Plus the status to effort ratio is high.

People are willing to lose money for this status.

Of course, as more people do it, the less high status it becomes, & people search elsewhere...
ditto rolling funds, SPACs, whatever's next, etc
high status externally among outsiders or SV tourists I mean
Read 4 tweets
7 Sep
Reality is up for grabs right now.

We're seeing more and more groups bootstrapping their own reality.

People call this "community building" but sometimes it's literally people defecting the shared sense of mainstream reality that has existed for centuries and creating new ones
Faith in institutions are crumbling at the same time the platforms for people to exit their own realities & enter new ones are growing

In the most uncertain time of some ppl's lives (COVID), ppl are scrambling for leaders who can give them a sense of what reality is or should be
Due to information & complexity overload, some ppl are
seeking sources of complexity-containment as if they were being chased by a saber-tooth tiger.

This explains conspiracy theory hysteria etc. In an age of increasing fragmentation, ppl are desperate to adopt a shared reality
Read 18 tweets
25 Aug
What is Nietzsche's lasting influence on Nazi Germany?

Brief summary of Stephen Hicks' "Nietzsche and the Nazis"

amazon.com/dp/B003XVYHRU/…
It may be hard to believe that the Nazis thought of themselves as idealists.

Western liberal democracies—& the freedom, equality, & peace they provide—are seen as good.

But was it obvious in the 1930s?

Democratic experiments were tried in ancient Greece and Rome. Both failed.
At the time it wasn't obvious liberal democracies were superior.

The U.S. lasted only 90 years before it plunged into a brutal Civil War.

In the 1920s the U.S. is itself experiencing economic uncertainty and is shortly to plunge into its Great Depression.
Read 25 tweets

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