01: The Latest Spirit Animal of Venture Capital; Legendary Analytics & The First Movie That Made Me Cry
feat. my favourite podcast, twice!
Welcome to the first issue of my weekly Newsletter!
Every week, I deliver 2 thoughts in 5 minutes or less. Onwards!
1. The Latest Spirit Animal of Venture Capital
(2 minutes, 400+words)
I am in a love-hate relationship with early stage venture capital. Who doesn’t like an underdog story? And the bragging rights to go with it if you make the right bets on behalf of sophisticated investors?
Lately I even came across a moral imperative to engage in angel investing, a subset of early stage venture capital, should you possess the financial and technical means to do so in light of the recent economic downturn:
When you invest in a startup, the money directly goes to the economy to build up a business, to create jobs, and to actually contribute to the trickle-down economy. On the contrary, investing in the public market is simply buying stocks from other investors. The money doesn’t directly go into the economy.
Yet we are are only beginning to see the tip of the iceberg regarding the moral misgivings surrounding the industry. Tech behemoths thrive on business models that create perverse incentives. Female, immigrant, or diverse founders have been more sidelined from startup funding than ever before.
And don’t forget the countless startups too busy gearing up for a hyper-growth trajectory or addressing existential threats, than to ponder adverse second order effects.
Small wonder then, when a venture capitalist makes a controversial statement about the sorry state of venture capital:
Well intentioned. Somewhat misguided. Somewhat low integrity… in certain places. Misaligned.
It’s not all doom and gloom, though. The Darwinian drive for differentiation cuts both ways. Come to think of it, the zoo of early stage VC parlance is actually pretty representative of the changing taste of investors along the boom and bust cycle.
First came the unicorns, referring to companies worth more than a billion dollars. Then came the cockroaches, downturn resistant companies characterized by fiscal discipline. Joining the fray are also zebras, whose black and white stripes signify the pursuit of profits and purpose in lockstep.
Now we have camels, companies with enough optionality built in for founders to, among other benefits, choose when and how fast to grow and, most importantly, on their own terms.
Hopefully there comes a day when I can allocate and return meaningful dollars along the lines of the following hypothesis:
‘Economies of scale will always stamp out cockroaches, antitrust headwinds will eventually break up unicorns, but zebras and camels will have the last laugh.’
Any hot takes for the next trending startup mascot? Feel free to subscribe and hit reply to this email to let me know!
2. Legendary Analytics & The First Movie That Made Me Cry
(2 minutes, 400+words)
I recently listened to Thomas Tull, a venture-capitalist-turned-film-producer, sharing one of the more nuanced explorations of the business logic behind manufacturing one cinematic hit after another.
In case you never heard of Tull before, he founded Legendary Entertainment and worked with Christopher Nolan to produce Batman Begins. It turns out his process is quite similar to startup incubation:
First of all, stand as close as you can to absolute talent, right? […] Then you’ve got to make sure that you’re spending an appropriate amount of money […] and think about how you’re going to get people’s attention, how are you going to market the film. […] Each film is like a startup company and has its own fingerprints.
The use of analytics to measure and refine business outcomes in the film industry is also prevalent, at least among top firms:
One of the things that I got fascinated with when we had Legendary Analytics, which we can talk about a little bit, is I asked our team to build a measurement. Instead of just what does tracking say we’re going to open to for the weekend, or what are the ratings of our television division, our shows and so forth, I also wanted to understand a meter against your addressable waking hours for media.
Movie studios understand they are competing against the likes of YouTube, Twitter, Masterclass, and other algorithmic mobile feeds at the audiences’ fingertips.
The problem is that if you’re trying to keep up with your Netflix queue and you’re watching college or professional sports […] you saw the trailer for the movie and you thought that’s a really good trailer. […]
Well, how many times do you actually go to the movie[s] versus just saying, I’ll see it at some other day? Everybody’s doing their job. Movie’s good, the trailer’s good, the marketing department did a good job, but it just boils down to time and attention.
Good movies will always hold a special place in my heart. It’s a form factor that’s long enough to register subconsciously with staying power (unlike most user-generated content on social media) but brief enough not to be a time sink (unlike TV Shows or Anime).
I am especially a sucker for good movie soundtracks, like soaring orchestral sections celebrating the simultaneous self-immolation and victory flight of the protagonists… OK that got oddly specific. It was actually the first time I wept like a baby while watching a film, but it seemed to do relatively poorly in box office results.
Any guesses which movie I’m referring to? Feel free to subscribe and hit reply to this email to let me know!
Thank you for reading!
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