This is my one-hundred-seventy-fourth weekly reflection. Here are my takeaways from this week:

• Sounding boards – It’s helpful to have smart, credible people to get candid feedback from and share ideas with. Sometimes they can accelerate good thought processes or highlight flawed thinking.
• Knowledge costs – Knowledge is never free. There’s always a cost. Everyone pays tuition (time, energy, or money). If you want knowledge, get comfortable with the idea of paying tuition and identify the form of payment that suits you.

Week one hundred seventy-four was a week of learning. Looking forward to next week!

Over the past few months, I’ve listened to a few early-stage founders pitch marketplace start-ups. Their pitch begins with a focus on connecting buyers and sellers. During the pitch they also say they have tools to help sellers, who are small businesses, manage their operations. They’re building marketplaces with workflow management embedded in V1 of their solutions.

This approach gives me pause because I struggle to understand the core problem they’re solving. Are they solving the inability of buyers and sellers to connect? Or are they helping small sellers manage their business operations?

Many of these founders point to large marketplaces (Airbnb, Etsy, etc.) as having inspired them. These mature marketplaces offer workflow management tools to sellers, so the early-stage founders believe they should build these features too. But mature marketplaces didn’t offer workflow management to sellers from the get-go. They solved their core problem (connecting buyers and sellers) first. After they achieved product–market fit and looked at scaling the platform, they added workflow management features. If they had done both at the same time, I’m not sure they would have had the same level of success.

Building a marketplace and achieving product–market fit is really hard. Getting the supply and demand dynamics to work is no small task. Early-stage founders should be crystal clear on the core problem they’re solving and allocate resources to build the best possible solution to solve that problem before building additional features that don’t solve the core problem.

One of my personal goals is to acquire knowledge daily. I focus on knowledge related to concepts I want to better understand so I can attempt to develop unique insights about them.

One of my favorite tools for consuming knowledge is YouTube. I subscribe to the premium membership to avoid ads and to access extra features. I start by deciding what concept I want to understand better. Then I identify people who have a deep understanding of it and search for videos of them sharing their knowledge. I add those videos to my watch list. During my daily treadmill walk, I watch these videos (usually at 1.5X speed to challenge myself). I’ve found that consuming videos while walking is the best fit for me. It feels productive, as I’m exercising and learning at the same time.

I’m a fan of the YouTube platform. It’s been a helpful tool in my quest to learn daily.

I’m a pretty even-keeled person. A friend recently asked how I’m able to stay so calm in most situations. Part of it is my personality and upbringing. But also, I’ve learned to quickly filter out things others may choose to worry about—specifically, things outside my control.

When I encounter something that could be worrisome, I ask myself, “Is this within my control?” If the answer is no, I simply don’t worry about it. It doesn’t make sense to waste my mental real estate or time on something I have zero control over. I can’t influence the outcome, so I shouldn’t worry about it. That doesn’t mean that I’m not aware of it or that I ignore it. I take note of the situation, but I don’t go further than that.

Not worrying about things I can’t control is a helpful mental trick that’s allowed me to allocate more mental bandwidth to what matters most: things I can control.

I caught up with a friend who’s working for an investment firm in New York City. In a wide-ranging conversation, we compared housing and transportation costs in New York and surrounding cities with those in Atlanta. New York is one of the top real estate markets in the world, which factored into my expectations, but what my friend shared today surprised me (especially regarding transportation). The cost of housing in the areas he frequents is still rising significantly, as is the cost of commuting into, around, and out of the city.

It’s one conversation with one friend—anecdotal for sure. But it reminded me how attractive Atlanta is from the perspectives of affordability and quality of life. And this is after the city has experienced some of the worst inflation in the nation.

I’m studying investor entrepreneurs—investors who have an entrepreneurial spirit and found their own investment firms rather than work for someone else. I’m specifically interested in those who’ve had outsize success—meaning they’ve been able to compound their capital at an annual rate that exceeds benchmarks like the S&P 500—for a decade or more.

I’ve noticed that many of these investors are opportunistic—that is, the types of investments they make depend on market conditions. The degree of opportunism varies by investor, but the great ones don’t stick with only one thing.

More importantly, I’ve picked up on a simple framework mentioned by multiple seasoned investors. It’s used to gauge what they should or shouldn’t consider investing in. They look at investments through the lens of supply and demand. If investor demand for an investment is high, its price is often higher and its potential return lower. If demand is low, its price is often lower and its potential return higher. These investors have had outsize success with opportunities for which investor demand was low, resulting in their being materially mispriced.

I like the approach of beginning the investment evaluation process by thinking in terms of supply and demand. It’s simple and can put the investment into perspective quickly.

Fred Wilson is a well-known VC and general partner at Union Square Ventures, which he cofounded in 2003. Earlier this year, he shared his predictions for 2023, which I recapped in this post. This week, he shared his updated thoughts on the venture capital sector.

Here are a few takeaways:

• Venture capital has been in a downturn for roughly eighteen months.
• The NASDAQ peaked at ~16,000 in November 2021.
• The NASDAQ was down ~33% by June 2022 and ended 2022 at ~10,500.
• As of July 14, the NASDAQ was at 14,113—up ~36%.
• Interest rates and inflation are driving the NASDAQ.
• The Fed raised rates aggressively in 2022 because of post-pandemic inflation, causing asset prices to decline.
• Inflation is down now, which means rates may have peaked.
• Expectations drive markets, and inflation and interest expectations have settled down.
• Venture capital lags public markets by a few quarters.
• Venture capital will likely respond to the NASDAQ’s strong 2023 quarters.
• Venture capital may be through its downturn.

Taking a company public has historically been a popular way for investors, founders, and employees of venture-backed companies to get liquidity for their company shares. It makes sense that public markets heavily influence venture capital.

I can’t predict the future, but as Fred said, in the next few quarters we’ll have a better idea of where things are headed.

This is my one-hundred-seventy-third weekly reflection. Here are my takeaways from this week:

• Bubbles – This week was a reminder that I enjoy being around people with experiences and perspectives different from mine. Living in a bubble isn’t for me.
• Growth mindset – There’s a common theme among investors and entrepreneurs who achieve extraordinary success: they focus on effort, not outcomes, and apply consistent effort toward learning. They all have a growth mindset.

Week one hundred seventy-three was a relaxed week. Looking forward to next week!

I always like to support hometown Atlanta founders. I recently listened to an interview of Ben Chestnut, founder of Mailchimp. In 2021, Mailchimp was acquired for $12 billion. I was curious to hear what Ben had to say post acquisition.

Ben shared lots of great information about his childhood and various other topics. He explained what made him go from “we’re never selling” to being acquired. He also said something about the origin of Mailchimp that caught my attention.

Ben was running a web design agency that was struggling to grow. One day, his wife was watching the Opera Winfrey Show; Rich Dad Poor Dad author Robert Kiyosaki was the guest. Kiyosaki talked about passive income and recurring revenue. Ben heard some of this and was inspired. He began searching for a recurring-revenue business, only to realize that he already had one—Mailchimp. Keep in mind that this was three or four years after the Mailchimp product had launched, but it was more of a side project that had received little attention from Ben or his cofounder, Dan.

They looked deep into the revenue of the Mailchimp product versus the revenue of the web design agency and realized that Mailchimp was growing despite being ignored. They decided to focus on Mailchimp. The rest is history.

I had the chance to listen to Andrew Huberman recently. His video on applying a growth mindset caught my attention. It’s lengthy, but I found it to be a great listen on a long drive.

Huberman defines mindset as “mental frame or lens that selectively organizes and encodes information.”

He defines a growth mindset as “attaching your identity and your effort and sense of motivation to effort itself and the process of enjoying learning and getting better at learning anything.”

He goes into much more detail in his video about this topic. But I especially like how he framed a growth mindset as embracing challenge in a way that allows you to optimize performance by focusing on effort and learning. This is great because it focuses on what you can control (effort and learning), not what you can’t control (outcome).