Author: Collab Fund

Ideas That Changed My Life


This post is by Collab Fund from Collab Fund


You spend years trying to learn new stuff but then look back and realize that maybe like 10 big ideas truly changed how you think and drive most of what you believe.

Brent Beshore recently listed the biggest ideas that changed his life. A few of mine:

Everyone belongs to a tribe and underestimates how influential that tribe is on their thinking. There is little correlation between climate change denial and scientific literacy. But there is a strong correlation between climate change denial and political affiliation. That’s an extreme example, but everyone has views persuaded by identity over pure analysis. There’s four parts to this:

  • Tribes are everywhere: Countries, states, parties, companies, industries, departments, investment styles, economic philosophies, religions, families, schools, majors, credentials, Twitter communities.

  • People are drawn to tribes because there’s comfort in knowing others understand your background and goals.

  • Tribes reduce the ability to challenge ideas or diversify your views because no one wants to lose support of the tribe.

  • Tribes are as self-interested as people, encouraging ideas and narratives that promote their survival. But they’re exponentially more influential than any single person. So tribes are very effective at promoting views that aren’t analytical or rational, and people loyal to their tribes are very poor at realizing it.

Psychologist Geoffrey Cohen once showed Democratic voters supported Republican proposals when they were attributed to fellow Democrats more than they supported Democratic proposals attributed to Republicans (and the opposite for Republican voters). This kind of stuff happens everywhere, in every (Read more...)

Getting Wealthy vs. Staying Wealthy


This post is by Collab Fund from Collab Fund


Good investing is not necessarily about making good decisions. It’s about consistently not screwing up.

There are a million ways to get wealthy, and plenty of books on how to do so.

But there’s only one way to stay wealthy: some combination of frugality and paranoia.

And that’s a topic we don’t discuss enough.

Let’s begin with a quick story about two investors, neither of whom knew the other, but whose paths crossed in an interesting way almost a century ago.


Jesse Livermore was the greatest stock market trader of his day. Born in 1877, he became a professional trader before most people knew you could do such a thing. By age 30 he was worth the inflation-adjusted equivalent of $100 million.

By 1929 Jesse Livermore was already one of the most well-known investors in the world. The stock market crash that year that ushered in the Great Depression cemented his legacy in history.

More than a third of the stock market’s value was wiped out in an October 1929 week whose days were later named Black Monday, Black Tuesday, and Black Thursday.

Livermore’s wife Dorothy feared the worst when her husband returned home on October 29th. Reports of Wall Street speculators committing suicide were spreading across New York. She and her children greeted Jesse at the door in tears, while her mother was so distraught she hid in another room, screaming.

Jesse, according to biographer Tom Rubython, stood confused for a few moments before realizing what was happening.

He (Read more...)

Getting Wealthy vs. Staying Wealthy


This post is by Collab Fund from Collab Fund


Good investing is not necessarily about making good decisions. It’s about consistently not screwing up.

There are a million ways to get wealthy, and plenty of books on how to do so.

But there’s only one way to stay wealthy: some combination of frugality and paranoia.

And that’s a topic we don’t discuss enough.

Let’s begin with a quick story about two investors, neither of whom knew the other, but whose paths crossed in an interesting way almost a century ago.


Jesse Livermore was the greatest stock market trader of his day. Born in 1877, he became a professional trader before most people knew you could do such a thing. By age 30 he was worth the inflation-adjusted equivalent of $100 million.

By 1929 Jesse Livermore was already one of the most well-known investors in the world. The stock market crash that year that ushered in the Great Depression cemented his legacy in history.

More than a third of the stock market’s value was wiped out in an October 1929 week whose days were later named Black Monday, Black Tuesday, and Black Thursday.

Livermore’s wife Dorothy feared the worst when her husband returned home on October 29th. Reports of Wall Street speculators committing suicide were spreading across New York. She and her children greeted Jesse at the door in tears, while her mother was so distraught she hid in another room, screaming.

Jesse, according to biographer Tom Rubython, stood confused for a few moments before realizing what was happening.

He (Read more...)

The End of Blitzscaling


This post is by Collab Fund from Collab Fund


A few weeks ago, Morgan recommended a documentary titled An American Experience: New York, which is a seven-part series exploring the city’s history as the “premier laboratory of modern life.”

The conclusion is simple. Over the past century-and-a-half New York became the world’s most dynamic city. Yet, like the financial markets that are inextricably linked to its fate, the Big Apples’s ascent has been anything but smooth or predictable. Instead, it has been full of booms and busts, catalyzed by equally volatile levels of confidence.

In the seventh and final part of the series, an architecture critic named Paul Goldberger characterized the city during one of the more severe periods of misplaced confidence – the mid-1960s.

“America has always believed in bigness. We particularly believed this in the 1960s when the World Trade Center was conceived. Americans wanted bigger American things — They believed bigger doses of American power were going to solve anything. It was the age when all cars were gargantuan and had fins, the age when we were sending troops to Vietnam, the age of going to the moon. The Twin Towers were the architectural equivalent of this notion of bigness.”

During this period, the original plan for rejuvenating Lower Manhattan was centered around the construction of a 60-story office building. However, in a pursuit of “bigness”, these plans morphed into the construction of not one, but two 100-story buildings* *that would end up oversupplying the city’s office market for years to come.

So, how did (Read more...)

The End of Blitzscaling


This post is by Collab Fund from Collab Fund


A few weeks ago, Morgan recommended a documentary titled An American Experience: New York, which is a seven-part series exploring the city’s history as the “premier laboratory of modern life.”

The conclusion is simple. Over the past century-and-a-half New York became the world’s most dynamic city. Yet, like the financial markets that are inextricably linked to its fate, the Big Apples’s ascent has been anything but smooth or predictable. Instead, it has been full of booms and busts, catalyzed by equally volatile levels of confidence.

In the seventh and final part of the series, an architecture critic named Paul Goldberger characterized the city during one of the more severe periods of misplaced confidence – the mid-1960s.

“America has always believed in bigness. We particularly believed this in the 1960s when the World Trade Center was conceived. Americans wanted bigger American things — They believed bigger doses of American power were going to solve anything. It was the age when all cars were gargantuan and had fins, the age when we were sending troops to Vietnam, the age of going to the moon. The Twin Towers were the architectural equivalent of this notion of bigness.”

During this period, the original plan for rejuvenating Lower Manhattan was centered around the construction of a 60-story office building. However, in a pursuit of “bigness”, these plans morphed into the construction of not one, but two 100-story buildings* *that would end up oversupplying the city’s office market for years to come.

So, how did (Read more...)

Some Thoughts on Investing, an Ongoing List. (Borrowed and not)


This post is by Collab Fund from Collab Fund


Dont “invest in the present”; imagine the situation and narrative as it will likely exist 12+ months from now.

Most forecasts are over-reliant on current realities.


Market efficiency is not a fixed property of a market, it is the end point of a process. When identifying a security that is expected to generate super-normal returns, always ask, why? The market is a reasonably efficient machine, if you can not identify why potential super-normal returns exist in this investment….perhaps they don’t


Equity markets are bad at correctly pricing 40%+ revenue growth and negative revenue growth. Outside of substantial changes to profitability, they usually more efficiently price 2-10% revenue growth.


Confidence in a forecast may increase with the amount of incremental information put into it, but the accuracy may stay the same. As analysts, we are prone to gather more and more facts to build conviction around a particular investment. While incremental information is often important, it can also convince us that our accuracy is higher than reality. This can be just as dangerous as ignorance itself.


Growth investors can be a lazy breed, and thus are prone to investing based on stories and narratives. Simultaneously, underlying realities of businesses and industries may not be apparent for years. It is often as important to understand what current narrative rules a specific business or industry. Often that narrative differs substantially from the underlying business reality. Periods during which narratives change can create substantial opportunity and risk.


When modeling the future of dynamic growth (Read more...)

Some Thoughts on Investing, an Ongoing List. (Borrowed and not)


This post is by Collab Fund from Collab Fund


Don’t “invest in the present”; imagine the situation and narrative as it will likely exist 12+ months from now.

Most forecasts are over-reliant on current realities.


Market efficiency is not a fixed property of a market, it is the end point of a process. When identifying a security that is expected to generate super-normal returns, always ask, why? The market is a reasonably efficient machine, if you can not identify why potential super-normal returns exist in this investment….perhaps they don’t


Equity markets are bad at correctly pricing 40%+ revenue growth and negative revenue growth. Outside of substantial changes to profitability, they usually more efficiently price 2-10% revenue growth.


Confidence in a forecast may increase with the amount of incremental information put into it, but the accuracy may stay the same. As analysts, we are prone to gather more and more facts to build conviction around a particular investment. While incremental information is often important, it can also convince us that our accuracy is higher than reality. This can be just as dangerous as ignorance itself.


Growth investors can be a lazy breed, and thus are prone to investing based on stories and narratives. Simultaneously, underlying realities of businesses and industries may not be apparent for years. It is often as important to understand what current narrative rules a specific business or industry. Often that narrative differs substantially from the underlying business reality. Periods during which narratives change can create substantial opportunity and risk.


When modeling the future of dynamic growth (Read more...)

Team Building


This post is by Collab Fund from Collab Fund


Last week we gathered as a team in Venice Beach California. We do this at least twice a year — fly to a city, clear our calendars, and spend time together. No phones, no meetings, no rules. It’s an opportunity to go a level deeper with the people who are working on this project, better known as Collab Fund.

It was one of my favorite gatherings since starting the firm 12 years ago. Maybe the pandemic has left me craving more meaningful interactions or the fresh, ocean air – I am not sure. But it was highly productive.

We discussed all the usual things you might expect. How are we evolving as a firm? Is our thesis fresh/current? How can we better support portfolio companies? What do we want to be when we grow up?

If forced to summarize one key take-away from these discussions, it would be to continue to chart our own path. Study and learn from other great investors and firms, but do things our way.

Some of the highlights:

A wonderful session with Mark Suster. Mark is someone I’ve looked up to for a long time. A principled, hard-working, generous person. He leads by example and lets his performance speak for itself. His willingness to open up and speak candidly with our entire team about a wide range of topics was such a gift. He’s got an absolute treasure chest of knowledge.

IMG_3993.jpeg

Next up was a donut break! We couldn’t help but meet up with (Read more...)

Team Building


This post is by Collab Fund from Collab Fund


Last week we gathered as a team in Venice Beach California. We do this at least twice a year — fly to a city, clear our calendars, and spend time together. No phones, no meetings, no rules. It’s an opportunity to go a level deeper with the people who are working on this project, better known as Collab Fund.

It was one of my favorite gatherings since starting the firm 12 years ago. Maybe the pandemic has left me craving more meaningful interactions or the fresh, ocean air – I am not sure. But it was highly productive.

We discussed all the usual things you might expect. How are we evolving as a firm? Is our thesis fresh/current? How can we better support portfolio companies? What do we want to be when we grow up?

If forced to summarize one key take-away from these discussions, it would be to continue to chart our own path. Study and learn from other great investors and firms, but do things our way.

Some of the highlights:

A wonderful session with Mark Suster. Mark is someone I’ve looked up to for a long time. A principled, hard-working, generous person. He leads by example and lets his performance speak for itself. His willingness to open up and speak candidly with our entire team about a wide range of topics was such a gift. He’s got an absolute treasure chest of knowledge.

IMG_3993.jpeg

Next up was a donut break! We couldn’t help but meet up with (Read more...)

WeaveGrid


This post is by Collab Fund from Collab Fund


When it comes to electrifying transportation, the future has arrived ahead of schedule. And we believe we’ve found a winner in WeaveGrid, which we recently invested in.

Auto manufacturers long derided electric vehicles as impractical – today, they are investing billions to catch up with the inexorable.

The rate at which consumers are buying EVs has consistently beat projections. Electrification is spreading across all categories of vehicles: two-wheelers in Israel, three-wheelers in India, passenger cars in Europe, and even airport buses in the US.

Electrifying millions of vehicles is one of the most exciting opportunities in climate tech. But this mobility revolution is also an enormous challenge: how do we charge millions of EVs without compromising the electrical grid?

Because as EV adoption accelerates, so too will the demand for electrons to charge them.

There are already ~2.5 million EVs on the road; by 2030, ~44 million will be sold each year. Charging a single EV from home increases a house’s energy consumption by 2-3x. So when thousands of vehicles charge at the same time, they can push the grid to its limit. And we’ve seen how when the grid is already at capacity, as was the case in California this summer, grid operators struggle to get EV owners to delay charging.

In short, our ‘dumb’ grid wasn’t designed to transport so many electrons.

pecan street image.png Source: Pecan Street via Canary Media

Today, utilities’ only solution is to spend money on costly infrastructure upgrades. BCG estimates (Read more...)