- The two things that matter most in the best-of-the-best companies post product-market fit are: (a) Cost efficient growth mechanisms (eg: virality, customer success driven growth) (b) Product-driven structural defensibility (eg: network effects).
- The common thread across the greatest of investors has been their focus on moat/defensibility. Warren Buffett used to make the analog of the ‘unregulated toll bridge’; Peter Thiel talks about monopolies; Fred Wilson/USV talks about ‘Large networks of engaged users, differentiated through user experience, and defensible through network effects’.
- The desire to be great vs. good is very important.
- As an investor, it’s easy to fall into the trap of pattern matching. Yes, pattern matching matters. But more important to retain the open mindedness to be able to identify a founder who’s going to rewrite the rules in an industry. That’s where alpha gets created.
- Founder’s domain expertise/experience can provide a first-mover advantage that dates prior to the founding of the startup.