Venture Stories: Tim O’Reilly and Parker Thompson on Company Building, Venture Capital, and Inequality.

Full podcast here

  • They talked about Blitzscaling as the surest way to create as much value as possible. I asked what do you mean by value? What it really means is the financial value of your exit. But I don’t think that the same as creating value in a business. [3:16]

  • The essence of Blitzscaling is buying market share with negative unit economics. [6:20]

  • Young entrepreneurs have become conditioned to think that the act of starting a business begins with raising money. [8:05]

  • The founders of RXBar were sitting around talking about raising money. Their dad said, “You guys need to shut the fuck up and go sell 1,000 bars.” They sold the company a few years later for $600 million. [8:31] 

  • If your business is less valuable as a real business than it is as a financial instrument you have a problem. I think we will look back at a lot of companies started this time as fraud. Like the CDO’s of mortgages in 2008. [13:34]

  • I’ve seen a lot of businesses that blew up [due to VC pressure to scale/grow] that had the potential to become a good, steady business. They could have had businesses like mine: hundreds of millions in revenue, profitable, lots of money in the bank. It took 40 years. [21:24] 

  • A lot of people forget that Jeff Bezos raised debt. Amazon didn’t lose billions against venture capital. He borrowed against the cash flows of the company. This is one of the reasons he owns more of the company. [29:41]

  • My advice to budding entrepreneurs: look for a real business with customers who give you money so you can get to positive cash flow. There are a lot of niches available because everyone is chasing quick, high growth opportunities. [35:27]

  • Self-knowledge as an entrepreneur is one of your greatest weapons. It is really easy getting caught up chasing somebody else’s tail wags. [50:10]

  • Your job is to see something that nobody else is doing. Not to be me too. [50:40]