However the two finance podcasts I follow really closely are "Odd Lots" from Bloomberg [1] and "The Compound and Friends" from Josh Brown and Michael Batnick. Both take a more broader look at the economy than just venture capital, and are super smart folks. Also honestly, they're fun to listen to which makes it easier.
- Companies that have physical assets often have a focus on operations work (e.g., where do I economically source asphalt near Berlin?). Intellectual Property businesses often have a focus on product work (e.g., what new software feature does EMEA sales need to make their quarter?). One is quite literally, building the value mile by mile at a relatively high cost. The other is more "unlocking" value that was so unbalanced something with minimal physical footprint can access it.
- Since outcomes in IP are so binary, it winds up that having all the ingredients geographically focused produces the best outcomes. This is definitely true for talent, but also the money, risk appetite, specialized services, government, etc, all contribute to the ecosystem. This is why SV (tech) and LA (media and entertainment) exist. By comparison, NYC is still large, but is a deep secondary (1/10th the size) for both industries.
- Asset classes aren't just about returns, they also have other dimensions like volatility ("beta") and liquidity. Being able to sell something easily is valuable, and not being subject to crazy swings is also valuable. Unfortunately those two often are at odds. These features make for different investment mixes, and also affect how you can get leverage (loans) with them as collateral. Specifically, real estate is super easy to get a loan on since it's not very volatile. Pre-IPO startup shares are very hard to get a loan on, because they are both volatile and illiquid.
- For non-public investments, a lot of the value is from either shaping the deal yourself or getting access to the right people. It's easy for me to invest $1000 in GE. I can't just walk up to Pixar and ask to invest $1000 in their next film. Same is true for startups. You either need to seed the deal (be the lead investor), or have the access to contribute. Building these relationships is a lifetime of work. This is why people specialize.
- Adding to above, VCs themselves are even more specialized. VC's typically stratify by company stage (seed, A, B, C, mezzanine, etc), industry, geography, thesis, etc. These are often driven by the philosophies of the partners, fund size, or by the LPs with specific expectations. To give a very direct example, GV with exactly one LP and invests in A-stage or later, has very different goals than YC, which has very different goals than the venture arm of a big-12 pharma company like Roche (Pharma is also intellectual property based). It's specialization all the way down.
A big takeaway for me from reading that book was that the companies that become extremely profitable are basically monopolies with no or few competitors that focus on scaling up rapidly. That was counterintuitive for me because I would have thought you'd ideally want to be profitable at all times. I'd also assumed that competing against incumbents that have little or no competition was the best way to get a profitable business running. That's actually a bad idea unless you're at least 10x better than the incumbent which you probably won't be.
