#284 Sebastian Mallaby - The Mindsets of Venture Capitals All-Time Greats
What Got You There with Sean DeLaney
00:00
The Power Law
The power law is the notion that 80% of investments will do nothing, but 20% will account for all other returns in your portfolio. What matters is trying to get into the ones that you know are going to go ten x, 20 x, 30 x. Unless you are crazy, you won't do something that is sily different to other people. And therefore, even if your idea is pretty good, ten other people will have the same idea and they'll compete with you. Your profits will be competed away. You can only lose one times your capital that you put in. So once you start looking at other investors who are rich, you cann' see the power law everywhere.
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