📚 Long Form Read of the Week:

On Inflection Points, by Michael Dempsey

Three ideas from this essay: 1. Recessions do not necessarily = great times to build a business

Great companies were built during the last two recessions, but this was driven more by inflection points like the launch of AWS, the App Store, and 4G penetration

Short thread on something I wish I had understood much better 10 years ago:

If you are ambitious, there are basically two games you can play at a startup

Many people early in their careers (especially those from big tech, consulting, finance) play the wrong game, and lose both Game 1: Optimize for company outcome. Spend all of your time finding and fixing the highest leverage problems you can

Game 2: Optimize for career outcome. Seek external signals like title, scope, and team size. Make sure you're "learning the right things"

“Creative intensity” is the rate at which products or services go stale and new ones must be created. It is the key factor in predicting the future of marketplaces.

On the left, the marketplace model will ultimately go extinct. On the right, it will persist.

A thread 🧵👇 When Airbnb and Doordash went public, they became two more data points in a long trend toward marketplaces with higher commissions and that do more work to justify those commissions:

A and B are newsletters serving similar audiences.

They're both hosted on private domains, and convert visitors to email subscribers at the same rate.

A switches to Substack, increasing its conversion rate by 10%.

Which do you think will happen over time? 👇 (1) A’s advantage compounds, and it eventually wins the entire audience.

(2) The conversion rates of A and B eventually converge, and in the long term, the subscriber lists of A and B are the same size as they would have been if they'd both remained on their private domains.

Most strategy books are a waste of time, but 7 Powers by @hamiltonhelmer gave me a genuinely new mental model for thinking about how to build a moat.

Here is a brief summary of Helmer's concepts, and five common ways they are misunderstood by startups: Hamilton describes three stages of power development:

Origination - Pre product market fit

Takeoff - Explosive growth, typically >40% YOY

Stability - Continued growth, but not at "takeoff" levels

The same factors that make marketplaces hard to build often make them incredible businesses at scale.

Riffing with @onecaseman @lennysan and @eriktorenberg inspired me to dust off some of my favorite learnings on how to build a marketplace 🧵 Online marketplaces by @jeff_jordan

The #1 job of a marketplace is to create the conditions for what economists call perfect competition. Some of the ways to accomplish this: level playing field, trust and safety, transparency, and economic empowerment.

a16z.com/2015/01/22/onl…

Many companies are under-investing in monetization efforts, partly because it's so tough to get right

One concept that has helped unpack this topic as I've worked with @ElenaVerna @Patticus and @bbalfour on the new @reforge monetization track:

monetization as friction 👇 Monetization is not an output of growth. It's an overlay on the whole system that can either add or eliminate friction

The art of monetization is applying that friction in ways that aren't in tension with growth but enable it

So much of what is written about growth is noise. Here are ten of the concepts I find myself coming back to over and over again 👇 1/ The Hierarchy of Engagement by @sarahtavel

A framework for sustainable growth: (1) users completing the core action (2) accruing benefits and mounting losses to drive retention (3) virtuous loop by which user engagement fuels future growth. medium.com/@sarahtavel/th…

Incredibly interesting quote I heard recently from @tylercowen that’s going to require some processing: “I think if you've lived an optimal life, there is actually a lot of regret at the end of it. The best path for a life is not regret minimization... it's something else. (1/4) “People assume that your deathbed perspective has this unique or special vantage point but it's when your faculties are at their weakest, your memory of what actually happened is at its worst. You're not responsible for any of it anymore” (2/4)