The Diligent Observer Podcast Episode 26: "Never Say Revenue" | Startup Economist Paul O'Brien on Seed-Stage Venture Philosophy, Building Domain-Specific Angel Portfolios, and Media-First Innovation
Today's episode explores three ideas that caught my attention:
- The “angel investor party trick” - Paul highlighted how the rush to become an angel investor mirrors the increase in the appeal of the “celebrity entrepreneur” we’ve seen over the last couple of decades. He believes that to flourish, the investor community must consolidate (read: more of us become an LP in a fund vs doing our own thing) and the “average” angel must level up their value-add. His direct and aggressive stance on this aligns with commonly discussed themes here at the Diligent Observer, and correlates perfectly with comments from Mitra Miller (VP of the Houston Angel Network) on the topic of “smart” vs “dumb” money in Episode 19.
- The “do they have an audience” screen - Paul explains why many investors fundamentally require founders to be storytellers with an audience - essentially treating this as a screening tool.
- Niche Angel >>> Generalist Angel - Paul offers a scathing critique of unfocused, “shoot from the hip” angel investing, which he posits actually harms the ecosystem. The benefits of niching down are twofold: 1) You become the “go to” angel in that niche which increases the quality of your insights (read: increased value-add) and deal flow, and 2) That niche ecosystem actually improves as a direct result of your energy, which creates a virtuous cycle.
I explore these ideas and more with Paul O'Brien, Founder of MediaTech Ventures. He blends economic rigor with deep media innovation expertise to help cities build sustainable startup ecosystems. Through MediaTech Ventures and his publication The Startup Economist, Paul explores how specialized investors can better deploy capital by truly understanding their sectors. His unique perspective comes from witnessing how misaligned incentives kill innovation - from overreliance on government grants to disconnects between capital and expertise.
During our conversation, Paul shares:
- Why most current angel investors should become LPs, illustrated through clear examples of how specialized knowledge drives better outcomes.
- An analysis of why Europe lags behind the US in innovation, centered on the unintended consequences of government funding.
- A practical approach to ecosystem building that emphasizes sector-specific focus over generic "startup community" development.
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All opinions are personal and may not reflect the views of The Diligent Observer. Not investment advice.