Book Review: The Power Law
The Power Law: Venture Capital and the Making of the New Future by Sebastian Mallaby. Here on Amazon.
TL/DR: Excellent book that details the founding of the Venture Capital industry and key developments over the last 30 years, drawing out the differences in approach and universal lessons.
The Power Law is the rule that governs the traditional venture capital industry - it’s the notion that most attempts at discovery fail but a few succeed at such a scale that they make up for everything else and generate incredible returns.
Quotes from the book:
"Reasonable people -- well-adjusted people, people without hubris or naivete -- routinely fail in life's important missions by not attempting them."
“Venture Capitalists look for radical departures from the past. Tail events are all they care about.”
“The future cannot be predicted, in can only be discovered."
"The key principle in the venture business is ‘back the right people’."
“Having witnessed the effect of employee share ownership on the early culture of Fairchild, he believed in awarding managers, scientists, and salesmen with stock and stock options.”
“They provided the follow-on financings for each other’s companies. They thought in the same terms. They had developed a professional code that made trust and coordination possible.”
“Precisely because venture capital does so much to shape society, it must become more diverse, both in terms of the investors it hires and the startups it finances.”
"As in Silicon Valley, China’s innovation engine had become a social cluster."
"Relative to Silicon Valley, China’s fast-developing business culture was flexible, fluid, and somewhat less of a boys’ club."
**Bonus** I watched Lapsis on a flight, and I recommend it. It's clever, not too dark. Those qualities in combination are almost impossible to find these days.