Stealing Signs - Issue 11
Clayton Christensen, Faker, Underutilized Fixed Assets, Uncertainty, Kobe, & Haus
Worth Reading
How Will You Measure Your Life
Clayton Christensen, Professor at Harvard Business School
“I have a pretty clear idea of how my ideas have generated enormous revenue for companies that have used my research; I know I’ve had a substantial impact. But as I’ve confronted this disease (cancer), it’s been interesting to see how unimportant that impact is to me now. I’ve concluded that the metric by which God will assess my life isn’t dollars but the individual people whose lives I’ve touched.”
An incredibly sad week with the passing of two icons, Clayton Christensen and Kobe Bryant. This is one of Christensen’s very best pieces and it feels more appropriate now than ever.
Underutilized Fixed Assets
Kevin Kwok
“Unlike businesses, most people with underutilized fixed assets baseline their value at zero. Any money these assets turn out to be worth is money they found lying on the floor that they’re happy to receive.
This lets a marketplace bring on supply at a much lower cost of acquisition than expected. And these savings can be passed along to consumers as well.”
A great insight here from Kevin — fixed assets are the foundation of most successful marketplace businesses: Uber <> car, Airbnb <> bedroom, and Ebay <> random stuff laying around. I love marketplaces and think about this business model very often. I took a long pause after reading this piece and recalled the most recent marketplace ideas I’d come up with — most are built on variable assets. These include consulting service marketplaces, matching brands with hard-to-discover talent for sponsorships, and matching demand to a regulated talent supply. Although Kevin mentions labor can sometimes be a fixed asset, I think I’ll reassess.
Or… maybe we’re running out of underutilized fixed assets to monetize? Not yet, it seems! A great example of a marketplace built on a fixed asset is Andreessen Horowitz’s recent investment, Neighbor, the “Airbnb of personal storage.” Jeff Jordan, Managing Partner at Andreessen Horowitz, outlines why Neighbor will be successful in this investment memo — I like it.
The Unkillable Demon King
Mina Kimes, ESPN
“…Faker became a household name. He starred in a commercial for SK Telecom (his team), striding toward to camera in slow motion. The internet birthed a hashtag, #thingsfakerdoes. Some League [of Legends] fans nicknamed him the Unkillable Demon King; others simply referred to him as God. ‘I think of him on the same level as Michael Jordan and Tiger Woods…’ says Jeon Yong Jun, a veteran announcer”
An awesome profile on the “first true global star of gaming”, Lee Sang-hyeok, or Faker (his gamer tag). Mina includes a ton of fascinating details about Faker’s rise to stardom, the history of esports in Korea, and the rapidly changing nature of esports games like League of Legends. Two of my favorite details:
Starcraft, released in 1998, was the first massively popular game in Korea and by the mid 2000s had spawned a professional Starcraft league, a national esports regulatory agency, and two cable networks dedicated to gaming. Cable networks dedicated to gaming!? In the mid-2000s!? Wow. I also had no idea about the professional league — I'm excited to dig deeper into this and compare to current league set ups.
Riot Games regularly updates their top game, League of Legends, which means character abilities, game rules, and game maps change every few weeks. Mina compares these changes to the NFL changing the point value of touchdowns from 6 to 5 next season, or the MLB suddenly changing the strike zone for certain types of players. That is utterly insane. And massively impacts career longevity.
As mentioned in previous Stealing Signs issues, I’m very excited about the esports industry. I’m currently fleshing out my thoughts on opportunity areas in this space to inform eventual esports-specific investment theses for Founder Equity. I’d love to chat with anyone building an esports company or working in the industry for further research. Shoot me a note at jackson.bubala[@]founderequity.fund. Looking forward to it!
Revelation and Discovery
Vaughn Tan
“We tell ourselves stories about ourselves to make sense of what we are doing and why we are doing it. My story at Google was probably something like ‘I’m working on a lot of forward-thinking projects which will add more value to the organization than bean-counting work with clear but trivial outcomes.’”
It’s funny to hear a story like this from inside a big tech company because if Vaughn left out the word “Google,” I’d have been certain he was describing his experience as a venture capitalist. VC’s spend a ton of time organizing gatherings and networking events, attending conferences, at coffee sessions with founders and other investors, and creating content. As Vaughn calls out, all of these things are time consuming yet none of them contribute directly or meaningfully to the firm’s bottom line or key objectives (this is more debatable than the bottom line impact at VCs than it is at Google).
I think I fall into the ‘voluntary internal uncertainty’ category of Vaughn’s personal uncertainty framework: actively seeking self-knowledge. What am I good at? Why am I here? Am I valuable? How do I become valuable? Generalist investors likely ask themselves these questions often and young, generalist investors almost certainly do. We’re operating in conditions of uncertainty and are often uncertain about ourselves.
Conditions of uncertainty can make it difficult to see the forest through the trees. For example, I meet with tons of founders but am not evaluated by the number of founder meetings I take nor the percentage of meetings that convert to investment. Further, unless we end up investing, these meeting are usually more beneficial for me and the founder than they are for the fund. However, over time, these personal learnings build up and, in aggregate, become beneficial for the fund because I make better decisions and expand my set of capabilities. It is very, very different than writing code or selling a product. In the moment, it’s not clear what value I’m creating, how it benefits the fund, or how I’m getting better at my job. But it will pay off. It’s just not clear when or how. Uncertainty, man.
Experian’s Networked Culture Drives Innovation
Greg Satell, Author & Entrepreneur
“[Justin] Hastings (Chief HR Officer) figured that he could accelerate the formation of boundary spanners throughout Experian by giving employees the opportunity to organize around things they care about. Experian clubs, like the biking group, are focused on interests, while Employee Resource Groups focus on identity, like Latino heritage, gay pride or military service.”
A great view into Experian’s company culture and the deliberate initiatives to connect people and enable collaboration. Greg has a great insight about how change is, or should be, driven in a company — it’s neither driven top-down nor bottom-up. Instead, “true transformation” tends to move side-to-side via horizontal connections between peers. From another of Greg’s articles,
“Most often, change efforts fail because they seek to overpower rather than attract… The problem is that fantasies about overpowering your foes are much more romantic than doing the hard work of building traction in small groups and then painstakingly linking them together through forging a sense of shared purpose. Yet if you want to truly change the world, or even just your little corner of it, that’s what you need to do.”
Tons of other great links in both of these articles — my favorite is the Strength of Weak Ties principle. It’s fascinating.
<stuff> Weekly!
LOL Weekly - As if it couldn’t get any worse for the Knicks…
lollllll I mean come. on.
Funding Weekly - Haus
“It all started with alcohol, an industry that hasn’t evolved since prohibition. It’s still ruled by huge liquor companies who spend big to get their products on store shelves and in bars — and you’re stuck with their choices. Sketchy ingredients. Too much alcohol. Too many hangovers. We wanted something better, so we made our own apéritif.”
Haus, a spirits brand focused on low-alcohol content drinks, raised $4.5M from over 100 investors (!!!). Some of the top funds and founders participated in this round, including Haystack Ventures, Homebrew, Shrug Capital, Casey Neistat, Jen Rubio (Away founder ), Rahul Vora (Superhuman founder), and Russell Simmons (Yelp founder).
I haven’t tried any brand low-alcohol spirit yet and it does not seem to have made its way to any of my social circles yet. Maybe I’ll be the one to introduce it! I’m more of a tequila-soda guy, though. Anyway, I'm not yet convinced these spirits will catch on. Maybe it survives as a niche product — I’m not sure. Regardless, can’t knock it till I try it.
Baseball Weekly - Mic’d Up!
Pedro Gomez, ESPN
Interesting move by MLB. It’s cool and all, but I can’t wait to hear the recordings of manager arguments — it’s what the fans want! Unfortunately, MLB will probably withhold these from the public. Praying for a leak. Here’s sneak preview of what we may get… ***WARNING: VERY, VERY NSFW*** (but hysterical). Link to video.
Video Weekly - Dear Basketball
Kobe Bryant
“You asked for my hustle. I gave you my heart.”
Kobe’s OSCAR and EMMY Award-winning animated short film.
Art Weekly - Awards Room at the Johnson Publishing Company HQ
David Hartt
I saw this photograph in the Tate Modern last summer and was immediately drawn to it — the iconic 60/70s design, the rounded edges of the window, and the soft pink color of the walls. It’s a very large photograph and stunningly crisp in person. It almost feels as if it’s staged or part of a set, but was truly the interior of Chicago-based Johnson Publishing Company.
