Alex Danco: Funding the Future

Today’s guest is Alex Danco, one of my favorite writers in the world. Back when I was in college and before I started writing, Alex was one of the first people who made me say “Wow I want to write like this for a living.” For years, he worked on the Discover team at Social Capital where he wrote a weekly newsletter called Snippets. Now, he’s joining the Shopify Money team, where he’s building the future of financing merchants and entrepreneurs with everything they do. This episode begins with a conversation about a book called Technological Revolutions and Financial Capital. It’s a favorite of investors like Fred Wilson and Marc Andreessen and Alex breaks it all down for us. Then, we talk about cities and the growth of suburbs in North America. And finally, we talk about the mechanics of writing online.

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Shownotes

2:10- How Alex found Carlotta Perez and her book Technological Revolutions and Financial Capital through the work of Bill Janeway. Why, if you are creating an unknown truly new product, you cannot know the value of your equity. How the venture capital community uses tested milestones to show potential value to investors.

10:20- An overview of the two main ways that risky business ventures were funded before VC. How financial capital and production capital exist fundamentally in tension with each other. Carlotta Perez’s theory on the life cycle of financial bubbles.

17:15- Is entrepreneurship across the US growing or shrinking today? Why the current VC and tech industry is a great example of "we shape our tools and then they shape us." Why founders are increasingly interested in funding that prioritizes optionality.

27:00- Why venture capital values opposite indicators of success than the general economy. Why so much education for innovators is focused on venture capitalism. Why Alex believes that financial Twitter will help fill the role of intellectual stimulation for people managing boring businesses. 

34:30- Why Alex writes 5,000 words a week. How writing in public can help in ways that just thinking does not. 

39:10- How to find "the villain" in your writing. How Alex believes urbanization and intellectual migration to cities will change in the US in the future. Jane Jacobs and the idea of complete communities versus gentrification.

48:18- Why complete communities are now found in the suburbs. The growing pains of Toronto. Why so many world-class musicians have come out of Toronto. How do highways create local culture?

59:10- What the organic, long-lived nature of cities means for how they change. How autonomous vehicles will change cities. How the pricing power and efficiency of large companies distorts the true cost of shipping, healthcare, and education.

1:08:10- How audio changes our brains. How the feed-forward system works in our sensory perception and motor function. Alex explains Claude Shannon's information theory and Marshal McLuhan quote "the medium is the message."

1:21:42- Why audio is the most information-heavy medium. Why great writing is not written the way that the author speaks. How Alex interprets the classic Nixon/Kennedy debate story. 

1:27:22- What the rise of podcasts means for media consumption and mental processing in the US. Why Donald Trump thrives in an audio environment. 

1:32:07- How Alex uses summarizing to improve his writing. How publishing every week informs Alex's content. Why the background information in your writing is some of the most important material in your post.

1:37:14 How Alex crafted his piece Social Status in Silicon Valley. How to create new ideas and work using an anchor in what you know.