Economics of the Music Industry (Renaissance Edition)

Interesting history on the rise of Western Music from the book In Praise of Commercial Culture” by Tyler Cowen

Financial support for musical for music composition developed more slowly than for the visual arts. Renaissance musicians usually depended upon churches, courts, or municipal governments for their support. They could not sell their product in a market thick with wealthy private buyers.

Economic factors help explain the slower growth of the music market. Early music, as a commodity, was neither durable or reproducible printed sheet music remained costly and did not successfully penetrate the music market until the eighteenth century. The performance could be sold in lieu of the composition, but performances tended to be expensive, unique events.

Georg Friedrich Telemann led the commercialization of German music with his frequent public concerts. The energetic Telemann presented secular works, sacred works, and commercial operatic productions  in great number.

Telemann targeted upper-middle-class audiences in Frankfurt and Hamburg, and did not rely on patrons. Telemann initiated the commercial emancipation of the German musician that Beethoven was to complete. His catchy themes, encouraged by his desire sire to reach a large audience, make him a continuing favorite on classical radio stations today.”

Continue reading Economics of the Music Industry (Renaissance Edition)

Investing in the Unknown and Unknowable

From Richard Zeckhauser at NBER:

From David Ricardo making a fortune buying British government bonds on the eve of the Battle of Waterloo to Warren Buffett selling insurance to the California earthquake authority, the wisest investors have earned extraordinary returns by investing in the unknown and the unknowable (UU). But they have done so on a reasoned, sensible basis. This essay explains some of the central principles that such investors employ. It starts by discussing “ignorance,” a widespread situation in the real world of investing, where even the possible states of the world are not known. Traditional finance theory does not apply in UU situations. Strategic thinking, deducing what other investors might know or not, and assessing whether they might be deterred from investing, for example due to fiduciary requirements, frequently point the way to profitability. Most big investment payouts come when money is combined with complementary skills, such as knowing how to develop real estate or new technologies. Those who lack these skills can look for “sidecar” investments that allow them to put their money alongside that of people they know to be both capable and honest. The reader is asked to consider a number of such investments.

Markets and People (or Thoughts on Venture Investing)

I’ve been thinking about this passage from an article about Sequoia’s Michael Moritz recently:

“Moritz waxed philosophical by comparing venture capital investing to bird spotting. “I rarely think about big themes. The business is like bird spotting. I don’t try to pick out the flock. Each one is different and I try to find an interestingly complected bird in a flock rather than try to make an observation about an entire flock.” For that reason, while other firms may avoid companies because they perceive a certain investment sector as being overplayed or already mature, Moritz said Sequoia is “careful not to redline neighborhoods”.

Continuing with the ornithological analogy, Moritz pointed to Cisco and said, “There’s a lot to be said for investing in the ugly duckling.” When Don Valentine led Sequoia Capital’s investment in Cisco, many others had passed on the husband and wife founding team of Len Bosack and Sandy Lerner.

At its core, venture investing is a job that can be broken down into people (execution) and markets.

Continue reading Markets and People (or Thoughts on Venture Investing)

The Challenge of Real World Interactions (Or Why Consumer Hardware Startups are Hard)

After CES, I wrote a post discussing what we look for when evaluating investments in consumer hardware products.

Since then, I’ve been involved in a series of conversations with investors, Founders, and partners of consumer hardware companies – both small, medium, and at scale.

As an increasing number of factors have brought down costs of starting these companies, there has been a growing meme around the how “easy” building a consumer hardware businesses has become – which any Founder of a scaling consumer hardware company would tell you in simply untrue. (You can see our opinion on it here and here.)

Continue reading The Challenge of Real World Interactions (Or Why Consumer Hardware Startups are Hard)

Focused and in the Room (or the Value of Being Present)

I’m approaching my fifth year at True Ventures and the ecosystem has changed a great deal since I joined full-time in June of 2010 (and even more since I started spending time with the team in June of 2009) Startups are now cool, the early-stage venture capital ecosystem is flush with cash, and more and more individuals are looking to join a high-growth technology company.

For an individual learning to invest, I was fortunate to join during a relative bottom in the market.  Being able to learn the mechanics (and feel) of the early-stage venture capital market during a quiet time helped speed up learning as well as built confidence in holding unpopular views.  It takes 10+ years to know if you’re truly good at venture capital (real businesses take 7-9 years to build value) – but the “best performing” investments I’ve worked with at True (based on revenue growth and quality of senior talent) were incredibly unpopular when we made the investment.  Sam Altman (now at YC) had the same observation across his angel investments.

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Working with Atoms: 5 Lessons for Building a Hardware Startup

In 2011, I attended my first Consumer Electronics Show in Las Vegas. While there were a handful of startups scattered throughout the main expo floor, including True-backed Valencell and Makerbot, the majority of companies in attendance were the traditional consumer electronics manufacturers that have ruled the shelves of Best Buy for the past few decades.

After missing CES in 2013 and 2014, I arrived this year expecting to see a similar mix of companies. However, I was thoroughly blown away to see the entire Sands Expo Hall filled with small, emerging consumer electronics businesses—hundreds (if not thousands) of new companies across a variety of brand new categories, including smart homes, digital health and “maker” products. And this didn’t even include the drones and other new technology areas in the main expo hall.


For a market that was dead before 2008, connected devices are back in a big way and are seeing more innovation (and funding) than ever.

At True, we’ve been fortunate to invest in more than 15 new startups selling physical products, including 3D Robotics, Makerbot and Ring. We even hosted an event last year called “True Atoms,” bringing together the best Founders and executives from across the lean hardware ecosystem to share best practices and learn from one another.

And while many trends, including decreased component costs, increased access to smaller-run manufacturing and the growth of cellphones, have made it easier than ever to launch a connected-device company, the challenges of scaling remain incredibly complex.

We previously wrote a blog post talking about hardware companies as “the double black diamond” of startups. One year later, I wanted to share some more thoughts and ideas about what we look for in new opportunities in connected hardware.

Continue reading Working with Atoms: 5 Lessons for Building a Hardware Startup

Catalog is King (or Why Jay-Z Buying Aspiro May Make Sense)

Last week, news leaked that Jay-Z’s Project Panther was in the process of purchasing streaming service Aspiro.

While I don’t believe that most users care about (or could discern the quality of) high fidelity audio, a major artist choosing a single platform to focus on could have an interesting impact to the overall market (specifically Spotify and Soundcloud)

Continue reading Catalog is King (or Why Jay-Z Buying Aspiro May Make Sense)