Lessons from my favourite books

Hey everyone,

I thought I would share the lessons I have read from some of my favourite books.

Originals by Adam Grant

As someone with a strong bias to action and a tendency to start several projects at once, this book helped me temper my bias. Adam Grant outlines a study where he looked at university student grades and revealed that those who take time to finish their assignments, start early but finish last minute obtain the best grades

He calls this approach moderate procrastination and it's one I have been employing to provide structure to my decision making. When I get a new idea, I am excited and biased to launch right away. Instead, I wait, letting the idea simmer in my subconscious. I launch if the idea still sounds good after a few weeks. Its brought more balance, certainty, and clarity to my life.

Hard Thing About Hard Things by Ben Horowitz

I read this book last year after I closed my startup and instantly regretted not having read it earlier my in life. Ben argues for brutal honesty with others and more importantly yourself. Sam Harris is another figure who argues for this approach to life. 

Being radically honest with my actions has been a blessing, another concept here is emotions/thoughts follow behaviors. This is somewhat contradictory to my previous point but at times the best way to know the path is to test them out one by one.

Man’s Search for Meaning by Victor Frankl

After my startup closed down I had a crisis of purpose. I read a few books on purpose/ meaning in life but this one provided me the most clarity. 

The book is an emotional and at times tough read but the lesson is clear. The ultimate meaning and purpose in life come from the people you love. 

Naval Ravikant's Almanac

Naval has a bit of a cult following in some communities but I find a lot of wisdom in his words. To start he argues that creating wealth is a positive sum game and a rising tide lifts all boats. 

To create this wealth, identify your specific knowledge and monetize it. Specific knowledge is found by following your curiosity and learning by experience. Being a physician is an example of specific knowledge. The next step after identifying it would be to create a product that separates your time from your specific knowledge. 

Zero to One by Peter Thiel

Peter Theil is famous for his mantra, "contrarian truth". He argues that a successful startup requires building something truly novel. It requires identifying a pain point no one is solving and then building a product around it.

There is wisdom in essentially building markets where there is no competition. I would caution against first mover advantage as at times you may be paying for expensive mistakes which your future competition can learn from.

Nonetheless, there is an inspiration in building something truly novel, and with discreetness, your learnings could be protected.

Angels by Jason Calanacis

I read this book early on in my angel investing journey and it's the reason I have kept going. Jason argues for diversification within reason here, specifically, he says if you're going to invest in startups then be ready to invest in 20.

This is a numbers game to an extent. You are generally betting on founders trying to achieve something very few do. Recognize this and support your founders, at times this support simply looks like listening to them without judgment. 

Good to Great by Jim Collins

Start with the who, step one to building a great company is getting the right people together. The importance of the founding team, their interpersonal dynamics, and their commitment cannot be overstated.

Jim also talks about leadership, in short, great leaders have a quiet fortitude about them built through discipline, perseverance, and humility. Great companies also create a flywheel effect, they are not one-hit wonders. It's important to build and incentivize processes that reward constant iteration and improvement.

Start with Why by Simon Sinek

I just finished reading this book last month and it has had a profound impact on how I think about taking on new projects. Simon describes what he calls the golden circle, at the center is "why" followed by "how" and "what". 

The simple premise here is that before planning what you are going to do and how you are doing to do it, figure out your why. Simon argues that customers buy why a company does what it does and not what it does. This is congruent with a common sales tactic where you do not sell features but sell a solution to your customer's problem.

He argues for building a company with clear values, beliefs, and mission. Give your customers a place to belong, a place where they can identify with your why. 

The Power Law by Sebastian Mallaby

This is arguably the best book about the history of venture capital and its rise to prominence. Sebastian shows how innovation rarely happens from industry experts but generally starts from an outsider's perspective.

Although not mentioned in this book, I find the story of the Wright brothers vs Samuel Langley an amazing case study to explore the above concept. Another concept explored in this book as the name suggests is the power law. Your batting average is irrelevant in venture capital, it's all about your ability to hit home runs. 

In venture capital, your returns do not follow a normal distribution. A small minority of your investments (maybe even one) will dictate the vast majority of your returns. If you invested $50,000 in Uber during their initial raise you would have $250 million. All your remaining investments would most likely be inconsequential. Venture Capital is a game of essentially finding a needle in a haystack, a high-risk tolerance where you see a substantial percentage of your investments fail is a must. 

Secrets of Sandhills Road by Scott Kapoor

Scott does an amazing job of outlining the importance of a big market. To follow my previous points, in addition to finding exceptional founders capitalizing on an undetected value proposition, a large market is essential.

Generally, we look for markets with more than 10 billion in market cap, given most of your investments will not return significant capital. The ones which do need to return a very large amount. Scott also provides some valuable advice for startups, to raise enough money to get to the next round. Raising at an excessively high valuation can be damaging and few recover from down rounds. 

Influence by Robert Cialdini

Influence is by far one of the most useful books I have read. The graphic above outlines the six principles of marketing. I used these principles in my startup and am currently using them for HealthTech Investors. This newsletter follows the principle of reciprocity where I freely share my experiences and knowledge. I did a Linkedin Post recently, outlining how I am currently using these principles. 

Thinking Fast and Slow by Daniel Kahneman

Daniel provides an excellent framework for when to rely on your intuition in decision-making. While a structured diligent process is necessary to evaluate opportunities, there is a role for intuition as well. He separates environments into high and low validity. 

A high-validity environment is ideal for intuitive decision-making. It is defined as predictable, stable, and one where results are available soon. Seeing patients in a high-validity environment whereas hiring an employee is a low-validity one. 

Thank you for reading,

Rishad