Larry Cheng

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Larry Cheng

Larry Cheng

@larryvc

Co-Founder/Managing Partner, Volition Capital. Journaling general business thoughts so I don't forget them. Christian. Harvard. Several private/public boards.

Boston, MA Katılım Mart 2009
1K Takip Edilen69.2K Takipçiler
Larry Cheng
Larry Cheng@larryvc·
A major competitive advantage for those with this DNA: "Thiel said the number one predictor of which of his students went on to build something important was not intelligence. It was tolerance for being publicly wrong-sounding for years before being right."
Sukh Sroay@sukh_saroy

Peter thiel asked a room of stanford students one question that made most of them quietly stop typing. He asked them what important truth do very few people agree with you on. Then he said the reason most of them could not answer it was the same reason their careers would be average. His name is Peter Thiel, and he has funded more zero to one companies than almost anyone alive. Here is what he said, and why it changes how you should be thinking about your work right now. He said the most valuable thing a person can own in the next decade is not a skill, not a network, and not capital. It is a real contrarian belief that turns out to be true. For most of history, being right about things everyone else was also right about was enough to build a good career. In the world that is arriving, consensus knowledge is free. Anyone can ask a model and get the answer the smart people would have given. The only thing that compounds is being correctly early on something the room thinks is wrong. His framework for testing your contrarian belief is brutally simple. He calls it the three layer test. The first layer is whether your belief is actually contrarian. Most people fail here instantly. They think they have a contrarian view, but when they say it out loud, half the room nods. If your belief is one a smart person at a dinner party would agree with after thinking for ten seconds, it is not contrarian. It is just slightly under the surface consensus. The second layer is whether your belief is specific enough to act on. Saying education is broken is not contrarian, it is a t-shirt. Saying a specific category of credential will collapse in a specific industry within a specific window is something you can build a company around. Most people stop at the t-shirt and wonder why they never compound. The third layer is the one almost everyone skips. Are you actually willing to look stupid for it. Thiel said the number one predictor of which of his students went on to build something important was not intelligence. It was tolerance for being publicly wrong-sounding for years before being right. He said the students who held their contrarian belief privately, waiting for it to be socially safe to say, almost always watched someone else build the thing they had quietly believed in for a decade. The people who are actually winning right now are not the ones with the most knowledge. They are the ones who picked one uncomfortable truth, said it out loud before it was safe, and stayed there long enough for the world to catch up.

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Larry Cheng
Larry Cheng@larryvc·
Re-posting, this time with the actual matrix.
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Larry Cheng
Larry Cheng@larryvc·
Finishing up the annual Volition Leadership Summit at Fenway Park which was awesome. We had 100+ portfolio company execs come together over a couple of days. Going to be posting some Summit reflections on various topics we covered over the next few days.
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Larry Cheng
Larry Cheng@larryvc·
True…. Working with founders in private companies, there’s a tremendous sense of ownership. That sense often disappears in larger companies that can easily turn into expansive bureaucracies that only know how to add but not subtract.
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Larry Cheng
Larry Cheng@larryvc·
Stock options only have intrinsic value when the stock price exceeds the exercise price on a per-share basis. If the stock price is below the exercise price, the option has no intrinsic value. The more the stock price rises above the exercise price, the greater the option value.
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Larry Cheng
Larry Cheng@larryvc·
A simple query to plug into your favorite LLM when evaluating a public company: In the last [3] years, how many open-market purchases—both in number and dollar amount—has the [company name] board of directors made?
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Larry Cheng
Larry Cheng@larryvc·
My durable strategy test: you can tell a competitive world what you plan to do, why you plan to do it, and why it will be so impactful - and they can't replicate it. If you can do that, then you have a moat. In the investment business, the most common reason a strategy is hard to copy is that it requires a specific psychological make-up that most don't have. As much as we like to think that our investment decisions are driven by our business acumen, that's not nearly the entire picture. Our business acumen lives within and is constrained by the confines of our psychological comfort. Our business acumen doesn't see beyond that hardened invisible barrier. Therefore, if a strategy exists outside of the psychological comfort of 99.9% of people, then that is a significant barrier to entry even if the strategy is open for the world to see. This is for the simple reason that for the 99.9%, their business acumen won't take them to that strategy because their psychology will prevent it. Whether we like to admit it or not, psychology almost always beats business acumen head-to-head. It happens so frequently that it's common to actually conflate the two - which is the ultimate sign that psychology has won the day.
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Larry Cheng
Larry Cheng@larryvc·
Finally, a beautiful spring day today in Boston.
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Larry Cheng
Larry Cheng@larryvc·
Uncommon to see a marimekko in the wild.
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MaeStonks (Jesus is Lord)
MaeStonks (Jesus is Lord)@StonksMae·
@larryvc Tbh I just like Jesus Larry. I'm poor and not valuable monetarily or to any workforce but if Jesus likes me I'm cool
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Larry Cheng
Larry Cheng@larryvc·
Am interview question I often ask: What do you measure in your life? It comes from my observation that top performers disproportionately like measurement, and others tend to prefer opacity. Measurement is the basis for performance assessment, tracking improvement, showing relative performance, defining winning… I’m inclined to think that top performers in the workplace are therefore more likely to measure in all aspects of life, hence the question.
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