#142 - Partnership Announcement
I am excited to announce that I am partnering with Victor Corrigan to build out the Circle of Competence newsletter and podcast!
He's super sharp, has similar beliefs about life & business, is already writing in public, is in a similar stage in his career, and has a bias towards action.
We want to build a content repository that is first and foremost useful in our journey in buying, building, and operating businesses and hopefully useful to others as well.
Tangibly, this looks like:
- an evergreen latticework of frameworks and mental models applicable to entrepreneurship and investing that we have dubbed "The Personal MBA"
- a weekly newsletter + podcast covering nuggets we're learning in entrepreneurship, investing, and from great guests from all industries + backgrounds
Make sure to subscribe to the podcast and newsletter for an upcoming introduction episode between Victor and myself where we will discuss our goals for the podcast, newsletter, and site overall.
We will be sharing a few nuggets per week in the form of 'frameworks' that are useful heuristics and mental models that are broadly applicable to business and investing.
This week’s Frameworks are from The Personal MBA by Josh Kaufman. To see all of our book notes and business frameworks to date, click here.
1. Commander’s Intent
Commander’s Intent is an excellent method for delegating tasks: whenever you assign a task to someone, tell them what you want to accomplish and why it must be done. The more your agent understands the purpose behind your actions, the better they’ll be able to respond appropriately when the situation changes. By using Commander’s Intent, you align on a strategy while empowering your team to achieve your directives in their own creative ways.
2. Turtles Over Tigers
Planning for resilience as well as performance is the hallmark of good management. Resilience is not sexy, because the benefits are a drag on performance when times are good. It can, however, save your hide when times get tough. Think less like a tiger and more like a turtle and your business will be able to withstand pretty much anything.
Examples of how you can build resilience into your business:
- Low, preferably zero debt
- Low overhead, fixed costs, and operating expenses
- Substantial cash reserves for unexpected contingencies
- Multiple independent products/industries/lines of business
- Flexible workers/employees who handle many responsibilities well
- No single points of operational failure
- Fail-safes/backup systems for all core processes
- Standardized operating procedures for the inevitable employee turnover
Is your business resilient?
On the nature of long term holds (A.J. Wasserstein, Yale School of Management)
+ The greatest case made yet for the benefits of compounding wealth tax-free by holding great businesses rather than selling and repeating.
Expectations entering due diligence (Permanent Equity)
+ "For a deal to die, generally one or more of the following has happened: material misrepresentation or suppression of information, demands for deal structure changes, an unwillingness or inability to communicate, and/or a lack of trust that inhibits transparency and progress. In practical terms, if you don’t want the business to continue to grow and succeed post-transaction, there’s a good chance the process may break."
The relentless Jeff Bezos (Stratechery)
+ "In the spring of 94 web usage was growing at 2300% a year. You have to keep in mind human beings aren’t good at understanding exponential growth; it’s just not something we see in our everyday life. But things don’t grow this fast outside of Petri dishes. It just doesn’t happen. When I saw this, I said, okay, what’s a business plan that might make sense in the context of that growth. I made a list of 20 different products that you might be able to sell online. I was looking for the first best product, and I chose books for lots of different reasons, but one primary reason. And that is that there are more items in the book space than there are items in any other category by far. There are over 3 million different books worldwide in all languages." - Jeff Bezos in 1994
Superstar cities are in trouble (Derek Thompson)
+ "The best argument against the remote-work experiment having a durable impact on our lives beyond the pandemic is an appeal to human inertia: For decades, the internet was a thing and remote work wasn’t, and after the pandemic, it’ll just feel like 2019 again. But the impediment to widespread remote work in 2019 and before wasn’t technological. It was social. According to the economist David Autor, remote work suffered from a “telephone problem.” Seven decades after the first telephone was patented in the 1860s, fewer than half of Americans owned one. Behavior dragged behind technology, because most families had no use for a telecom machine as long as none of their friends also owned one. In network theory, this is known as Metcalfe’s Law: The value of a communications network rises exponentially with the number of its users."
The best compendium of investment checklists EVER (Link)
+ Quite possibly the most useful list of investment checklists ever.