13 Reads to Help You Become a Better 'Tech' VC
The reason for this article?
Human bias and behavior patterns do not evolve as quickly as technology does.
Venture Capitalists. Books on venture capital teach a dominant business model, a mix of product, sales, marketing, supply chain, and competition. Technology is used to move people to purchase some product by marketing, ads, social media, and “influencers.” Even better, they like it when they can sign people up for a subscription to obtain steadily recurring business income.
Also, Venture Capitalists often bash universities and colleges. Yet they often do not know calculus, physics, or advanced technical subject areas. How can a group like this even recognize a technically advanced idea, and ponder its potential, scientifically? Their primary computing tool is the spreadsheet.
Our Built-In DNA Programming . Almost every traditional enterprise vision is some variant of club and fang. Some believe that we must have winners, and we must have losers. Some believe that we must have competition instead of collaboration.
Science. Science applications make it possible to foster choices. Elon Musk builds infrastructure, not “products.” The big picture is first, then the math to implement it. The product manufacturing is incidental, relative to the original big picture vision. Altruistic thinking. Goals. Intention.
History. Adam Smith showed that mutual self-interest gives rise to The Invisible Hand. Despite the DNA robot program in our brains, science and collaboration increase the likelihood for a better future in the long run.
The following books on venture capital and more will shape your thinking on “tech” investing. (Hopefully in a good way.)
Thirteen Books List (Ordered By Publication Date)
Only Yesterday (Frederick Lewis Allen ~1932)
This book is a real-time visual of human behaviors in a trending environment. The rise of the apartment (affordable housing); the motor car; popularity of Mah Jong; the rise of the stock market (and consumer credit). Learn about trends and fads, and how they shape beliefs and perceptions.
400 Million Customers (Carl Crow, 1937)
Read vignettes about differing business belief systems in various regions of the world. Learn how people “see.” In China, in USA, and in other places.
Business Cycles (Joseph Schumpeter, 1939)
Schumpeter portrays the entrepreneur and innovation as the prime causes of economic development. You will find the examples of resourcefulness in financing schemes remarkable. (Note, the abridged version of the original book omits the talk about business cycles.)
Capitalism, Socialism, and Democracy (Joseph Schumpeter, 1941)
This reading serves as the background framework for entrepreneurial “creative destruction.”
Hitler's Table Talk (Adolph Hitler, 1941-1944)
Direct quotes from the man himself on how to put forth ideas and implement them. How to put others to work, and how to yoke them. For example, you will see why Jack Welch’s tactics in GE created extensive damage. A second example is when Welch tried to grab Honeywell, but Honeywell pulled out.
The Affluent Society (John Kenneth Galbraith, 1958)
Here, Galbraith asserts that corporations create demand for their products through relentless advertising. Compare this to the traditional view where corporations are serving the consumers’ choice (ostensibly through supply and demand.)
The Structure of Scientific Revolutions (Thomas Kuhn, 1962)
Before a new paradigm emerges, it is incredibly difficult (in the present belief system) to evaluate the evidence right in front of our faces. Learn why.
The New Industrial State (John Kenneth Galbraith, 1967)
Read Galbraith’s take. Corporations control the market, and even “make” the market.
Motel of the Mysteries (David Macaulay, 1979)
What we “see” is shaped by our present circumstances and world view. People tend to think they can rise above that. In this book you learn than more often than not, they cannot.
Newton's Clock (Ivars Peterson, 1993)
The theme is how to predict in chaotic systems. Sometimes, to understand something clearly, a custom computer architecture is the only way to obtain reasonably accurate predictions. The book shows many examples. Separate from the book itself, here are three custom prediction examples from real life:
Zero to One (Peter Thiel, Blake Masters, 2014)
This is perhaps the most important book to read for a startup founder. Read a detailed outline of the “Wealth Creation Process.” Instead of business, sales, marketing, and etc., Thiel and Masters suggest a different route. See the important role of first principles and the seven elements for business and wealth creation. This is an important read for a venture capitalist as well.
Capitalism: Competition, Conflict, Crises (Anwar Shaikh, 2016)
Shaikh reveals that competitive practices and business practices can severely disrupt the economy. He applies classical political economic theory. Nothing radical here.
"Paris in the Twentieth Century" (Jules Verne, 1863. Published 1994)
Predictions of the future (1960), made in 1863, by Jules Verne. Prediction of the future is difficult, but Verne assessed some long-term impacts fairly well. Before reading, you can review the summary of the “Predictions for 1960.”