Narrative Is the Interface

I’ve been thinking about the necessity and discipline of only working on/backing important stories. Embedded in that are two concepts:

1. You need really compelling stories (and storytelling) to win

2. Plenty of things can be good businesses but very few can be important companies

As markets and the information environment becomes more reflexive (the winners win because they’re winners), you need early proof that what you’re doing matters to attract capital, then team, then customers beyond the earliest believers that each accords. That requires narrative as an interface with which to interact and through which to understand a company and idea.

Narrative precedes you into every conversation, stands in for you when you can’t be in the room, and is what you leave behind.

The most vital component of that narrative is an answer to the question “why does this matter? Why is this important?”

After all, the most painful way to fail is to win a race with no prize. If you’re doing unimportant work, you can “win” and still lose.

And it’s not even clear that important work is harder or less likely to succeed. Maybe from a standing start important work requires more effort (moving a mountain vs a bowling ball). But when you’re working on something important you can muster more resources to build real momentum that accumulates and sustains you through adversity. Remember: P=MV aka momentum requires mass, not just velocity.

Building companies that matter/working on important stories and ideas attracts catalytic materials (namely talent and capital) necessary to succeed, at least once you can articulate the narrative such that it presages your victory as weighty and inevitable. The alternative is low odds which drive lower for want of resources to win a meager prize.

Even allowing that important things are 2x as hard (not sure I accept that), the rewards are much greater than 2x as big. There is no expected value in unimportant endeavors - not on a relative basis.

But what does important look like? Is there a falsifiable test? At this point I have a working framework and a few ideas (some of which are tautological with the above) for how to identify importance:

1. Narrative potential energy - big ideas that can be expressed clearly enough that they can take on a life of their own.

2. Start at the end - articulate a vision for why winning matters and what a maximally successful version of your idea looks like. Assume you’ve already won - how has the world changed/how have you changed it? Has power shifted or the earth moved?

3. Surface area - To be important is to have reach and the potential to compound. Companies don’t compound by doing more of the same but by doing/enabling something new, time and time again.

4. Losers and villains - Losers or villains are necessary tension to express importance. A company that rewires markets has to catalyze a power shift: either by taking power from or empowering someone else, ideally both. It’s why “historically low software penetration but now we can do AI” is such a snoozy, unimportant framing for a company.

5. My feelings don’t care about your facts - As soon as you start using TAM math (X percentage of Y market at Z rate) to explain why something matters, you’ve already lost the argument. The math should be self-evident and come at the end.

I’m willing to accept that my 5 part working rubric is wrong but the premise behind it is not.

momentum requires mass and mass derives from doing work that matters, made legible through narrative.

Any undertaking that isn’t important and can’t articulate a narrative for itself will be constrained by a lower bound of inputs, momentum, and expected value. Backing or working on unimportant stories might “work” but it systematically removes you from compounding upside.

Play important games, win important prizes.

If the 2010s were the decade of virtue signaling culminating in 2020’s culture war bonanza, then the last 5 years have marked a dark turn toward “vice signaling.” Now being bad is good and so much of contemporary culture feels like a competition to more brashly signal cruelty, vice, and contempt. The return to calling people “gay” and “retards” is the clearest sign of this culture shift but it is one of many.

For all the ways virtue signaling is/was inauthentic and annoying, even pretending that you care about the world is clearly better than dismissively cackling that of course you don’t. Being bad feels fun and dangerous but actually doing bad is, of course, bad!

The spirit of vice signaling has infused our politics, business, art, and markets. It is the dominant note growing louder over the last few years as backlash to the prior decade of virtue signaling.

We’re reaching the apex of vice signaling and at the start of a vibe shift back toward virtue. People are being confronted with the fruits of nihilism, cynicism, and cruelty and the worm is starting to turn.

The signs are signing and I expect sincerity, virtue, morality will be cool again by 2027.

Get ready to lib out with me.

I’ve been running this hiring survey for venture funds looking to hire investors and a talent survey for the other side. If you’re interested in potentially getting matched with/intro’d to opportunities, please fill it out. It’s all double opt in and I have a pretty good slate of opportunities right now.

Note: I’m not going to share the whole list for the sake of trust and anonymity.

A SF VC in NYC

Like de Tocqueville capturing the unique spirit of America as an outsider in 1835, Nikhil nails the New York startup spirit from his seat in SF:

I do believe that San Francisco and Silicon Valley continue to have the highest concentration of the most ambitious founders, and likely always will. But NYC has plenty of founders with world class ambition, and most let their businesses speak for themselves, which feels different from a lot of what we see in SF.

Perhaps one of the keys is that NYC has many people, not just startup founders with world class ambition — arguably the highest concentration of any city anywhere. You may be a great founder, but you’re around great artists, bankers, chefs, lawyers, and more. When everyone around you is reaching for the top, it can’t help but raise the collective ceiling. Everyone honing their craft, finding their footwork in every field, in the city that never sleeps.

The Monks in the Casino

It’s very clear by now that legalizing online sports betting was a colossal mistake. It’s one of the shot calls I’ve gotten most wrong. I couldn’t have foreseen how it would be so quickly normalized and omnipresent.

If everything is becoming television, and everything on television is trying to become gambling, then the end point is not hard to see: On every screen, a casino.

This shift has moral as well as economic consequences. When a society pushes its citizens to take only financial risks, it hollows out the virtues that once made collective life possible: trust, curiosity, generosity, forgiveness.

Peter Thiel: Capitalism Isn’t Working for Young People

Thiel with some of the most cogent writing about NY’s Mayoral race. I don’t agree with all (many? most? any of?) his conclusions but I definitely think he’s right about diagnosing the mood in America.

But to Mamdani’s credit, he at least talked about these problems. So my cop-out answer is always to say: The first step is to talk about the problems, even if you don’t know what to do about them. There’s been a failure of, let’s say, the center left-center right establishment to even talk about them.

I don’t know if I would say that young people are pro-socialist. I would say they are less pro-capitalist than they used to be. If capitalism is seen as an unfair racket of one sort or another, you’ll be much less pro capitalism. So in some relative sense, they’re more socialist, even though I think it’s more just: Capitalism doesn’t work for me. Or, this thing called capitalism is just an excuse for people ripping you off. [...]

Maybe we should look for solutions outside the Overton Window. And that includes some very left-wing economics, socialist-type stuff. I don’t think those ideas will ultimately work, but they’re more than whatever was on offer. Cuomo did not have a plan for housing. He didn’t even think it was an issue. And of course, he’s been in politics and government for many, many years, so it’s hard not to ask: Why is he going to do something now, if he hasn’t done anything before? So, I’m not optimistic about Mamdani, but if you score it relatively, this is the kind of thing that’s going to happen if you look outside the Overton Window for solutions.

The Sierra Club Embraced Social Justice. Then It Tore Itself Apart.

The problems at the Sierra club are a pretty good encapsulation of so much of what has plagued organizations on the left. Very much parallel to the mistakes the ACLU made over the last few years. Focused organizations are effective organizations and you need big tents on single issues vs the omnicause. Let the main thing be the main thing.

It drove away longtime volunteers who loved the club’s single-minded defense of the environment, by asking them to fully embrace its pivot to the left. Some even felt they were investigated by the club for failing to go along. Many hard-core supporters felt the Sierra Club was casting aside the key to its success: It was an eclectic group of activists who had one, and sometimes only one, cause in common.