Investing

The Power Law, Sebastian Mallaby (9/10)

An exploration of the VC industry and its impact on the modern economy and startup innovation

Nov 20, 2022 • 1 min read

🚀 The Book in 3 Sentences

An exploration of the venture capital industry and its impact on the modern economy and startup innovation
Analysis of the unique-risk taking characteristics and operating and funding models of venture capital firms
Epic historical tales of the most successful venture capital firms and the transformative companies they've back

Great follow-up to How the Internet Happened by Brian McCullough. It covers similar tales, but covers a broader timeline (starting from the mid-2oth century to the late 2010s and early 2020s) and is mostly from the VC perspective. Like How the Internet Happened, it's incredibly well-researched and engaging. Not only does it explore the VC/start-up ecosystem, but also discusses its far-reaching impact on society. It's very accessible (not much VC jargon), but dragged on a little longer than expected, otherwise, I'd give it a 10/10.

Anyone broadly interested in finance, technology, entrepreneurship, and economics, especially aspiring VCs, start-up founders, and investors who want a better understanding of the dynamics of high-risk, high-reward mindsets and funding models

VC plays a critical role in driving innovation and economic growth by providing resources and expertise to startups
The power law emphasizes the importance of risk-taking and being open to failure
Successful VCs must possess a magical combo of creativity, intuition, depth of knowledge, independent thinking, interpersonal skills, and analytical skills

Venture capital is less about picking winners than about helping to create them
The power law is a reminder that in a world of exponential change, small bets can lead to outsized rewards
Innovation is not a linear process, and venture capital is the fuel that accelerates it