Remember how this company Birchbox was everywhere 3 years ago? And how today it’s…not?
Turns out after raising $90 million at a peak valuation of $500 million, and after a few years of struggle, in 2018 Birchbox sold a majority stake to a hedge fund for only $15 million. This means after a journey of 8 years, its investors were totally wiped out. Employees who had exercised stock options came out with nothing.
Admittedly, I wasn’t a target customer, and this might have been obvious to their user base for years. But that this wasn’t bigger news (at least in the sources I read) reflects an ever-present survivorship bias in entrepreneurship. The companies that survive soak up the attention; the failed companies fade away with a whimper. We forget how much hype they built up years ago, and we turn our attention to the next hot thing.
But failed companies are where some of the best lessons can be learned. Warren Buffett says, “it’s good to learn from your mistakes. It’s better to learn from other people’s mistakes.”
Studying failed companies helps you better differentiate strategies that work from ones that don’t. Studying failed businesses helps you look past platitudes like “culture is everything” to understand the fundamentals of why many businesses fail and some succeed. Studying failed startups helps you discount today’s breathless press hype, and better try to predict the future.
I’ve done a deep dive into 59+ failed startups. Each has a meaningful story to learn from.
Most of these were venture funded by big names: Andreessen Horowitz, Sequoia, Kleiner Perkins.
They raised on average 8 figures of funding, some with $100 million+ – these were serious contenders, once strongly believed in by professional investors.
Many of them have postmortems written by a founder, complemented by third-party analysis of why they failed.
I hope they’re as useful to you as they were to me.
This book is hailed by famed venture capitalist Marc Andreessen as “the single best book to understanding how this [software] industry works.” Tech investor Fred Wilson (behind Twitter, Etsy, Coinbase) based much of his firm’s investment thesis on the concepts in this book.
Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages, by Carlota Perez, lays a framework for understanding the boom and bust cycles of disruptive technologies. The model is built on the history of the last five technological revolutions, from the industrial revolution to today’s information age.
Written in 2002 after the dotcom crash, Technological Revolutions was remarkably prescient in predicting how the tech economy would evolve in the following two decades. If you understand this book, you’ll have a better grasp of the 2000 tech bubble, where growth will occur in the next decade, and why explosive industries like cryptocurrency behave the way they do.
Charlie Munger is Warren Buffett’s long-time partner at Berkshire Hathaway. Bill Gates says that Charlie “is truly the broadest thinker I have ever encountered.”
Poor Charlie’s Almanack is a collection of Charlie Munger’s best advice given over 30 years, in the form of 11 speeches given as commencement addresses and roundtable talks. In all his talks, he shows wit, rationality, and incredible clarity of thought.
In this summary of Poor Charlie’s Almanack, I’ve extracted the most important points and organized them by topic. You’ll learn why Charlie considers multidisciplinary learning vital to success, his checklist when making investments, and how to build a trillion dollar company from scratch.
You might know Ashton Kutcher from his acting in “Two and a Half Men” and “That 70’s Show.” But he’s also a tech investor with an impressive hit rate – investing in Skype, Foursquare, Airbnb, and Uber. He co-founded A Grade Investments and Sound Ventures, whose first fund size is $130 million.
Here’s what I’ve learned from Ashton on the tech side.