One Quote:

“Courage is resistance to fear, mastery of fear—not absence of fear.” - Mark Twain

What we fear the most is often what we most need to do.

Get closer to your fears. Master them.

One Framework:

Disruptive Innovation

The late Clayton Christensen was one of the most influential management thinkers of our time. His theory of disruptive innovation is widely considered one of the most important business ideas of the 2000s (though it was originally developed in the mid-1990s).

The process of disruptive innovation—according to Christensen—involves a smaller company challenging an established incumbent by entering at the bottom of the market and methodically moving up-market.

The generalized process plays out over a few steps:

1. Incumbents develop a product or service for the most profitable customers, ignoring all other customers.
2. Upstarts target the ignored market segments—customers who are typically being over or under-served by the incumbent’s offering. These upstarts win by delivering exactly what is needed at a lower cost compared to the incumbent.
3. Incumbents don’t respond—choosing to continue their focus on the most profitable customers.
4. Upstarts methodically move upmarket from the initial entry.
5. Upstarts eventually attract the incumbent’s profitable customers, completing the cycle of disruptive innovation.

There are plenty of real examples of this playing out right now. Banking is a big one that I’ve seen—traditional banks are being disrupted by upstarts targeting a specific customer segment that has been under-served by the incumbents. Mercury is targeting startups—providing the best banking experience for that specific customer archetype.

This framework is powerful. It can be used:

• To ideate on new business ideas—identify the incumbent, identify the customers that are being over or under-served by the incumbent, create the best product for that specific customer segment.
• To evaluate the shifting landscape as technology disrupts traditional industries. This is useful as an investor for predicting large, long-term changes.

Disruptive innovation is definitely one of my most frequently used frameworks for business and startup problem-solving.

One Tweet:

This was the most tactical thread on cold emails that I’ve ever read.

It lays out a play-by-play for how to raise money via cold emails, which the author has done successfully on many occasions.

I’ve seen a lot of threads on cold emails, but the illustrative example this walks through was what brought it to life for me. You can basically duplicate this format and structure for your own cold email endeavors—just adjust to your situation and context.

Definitely worth your time.

One Article:

Default Alive or Default Dead

This is a great Paul Graham memo from 2015 that is hyper-relevant for founders, investors, and operators as we enter a period of uncertainty and market choppiness.

The basic idea is that there are two states of a company:

• Default Alive: At the current level of expenses and revenue growth, the company will be able to achieve profitability before it runs out of cash.
• Default Dead: At the current level of expenses and revenue growth, the company will not be able to achieve profitability before it runs out of cash.

The takeaway: Companies who are Default Alive will always operate from a position of strength—able to make thoughtful, creative decisions about how to execute and grow. Companies that are Default Dead need to focus on getting to Default Alive status before thinking about anything else. Ruthless honesty about where you sit is the important part.

I apply this concept more broadly than just for startups and investing—I think this applies to our own personal finances. Make sure that you are always Default Alive. The peace of mind will allow you to take thoughtful risks and expose yourself to asymmetric opportunities.

One Podcast:

Planet Money—Buy Now, Pay Dearly?

Buy Now, Pay Later (or “BNPL”) has taken the commerce world by storm over the last five years. There are very few large purchases that don’t have the option of doing an installment payment through one of the major BNPL providers (like Affirm). Heck, my protein powder even offers the option to split the $75 payment for a 2 pound jug into 4 payments!

I’ve often wondered whether this was a relic of the bull market and likely to end.

This Planet Money was an awesome, short investigation of this question and dives into the industry and whether it poses any major risks to consumers and the economy.

Listen to it on Apple Podcasts or Spotify.

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