Village Global Podcast

Ross Douthat (@DouthatNYT), New York Times columnist and author of The Decadent Society, joins Lucas Bagno and Ian Cinnamon on this episode. Takeaways:- Since the moon landing, we have entered a period of stagnation. Confidence and optimism have declined and culture has entered a repetitive spiral where patterns from the 60s/70s have been repeating themselves.- Government has become less effective and more gridlocked over time.- The world’s richest societies are dealing with a population problem. They are not reproducing themselves, which has led to aging societies that are “stable but stuck” because they are resistant to change.- The internet has been more of a conduit to cultural repetition than people think — old music is often most popular music on streaming services.- The traditional story of science has been that it triumphed over religion but science emerged from an extremely religious society and it would be no surprise to Ross if as religion decays scientific progress might as well.- Ross says that we need a renaissance to get ourselves out of the age of decadence — a reaching back into the past while synthesizing all the advancements that have come about in the meantime.Thanks for listening — if you like what you hear, please review us on your favorite podcast platform.Check us out on the web at www.villageglobal.vc or get in touch with us on Twitter @villageglobal.Want to get updates from us? Subscribe to get a peek inside the Village. We’ll send you reading recommendations, exclusive event invites, and commentary on the latest happenings in Silicon Valley. www.villageglobal.vc/signup

Steve Kim (https://www.linkedin.com/in/stevenrkim/), Partner and head of Investment Strategy at Verdis, a 9-generation single family office, joins Olga Serhiyevich (@olgaserhi), Head of Investor Relations at Village Global, on this episode. Takeaways: Early stage venture is a power law asset class where the returns of the asset class are driven by outliers. The best way to increase probability of getting asset class rate of return is by increasing variance in the portfolio through diversification. Pattern matching tends to reduce variance and contrary to industry’s beliefs, is undesirable from the systematic approach perspective. There is no limit to diversification beyond practical limitations of being able to see and invest in all the relevant deals for GPs. 20-30 portfolio companies is a typical level of diversification in other asset classes including growth equity and buyout where returns are normally distributed. In early stage venture (pre-seed to Series A) this level of diversification is less likely to produce industry average returns on a consistent basis. The average rate of unicorn production is 1-2% in the industry but it varies across sectors, vintage years and geographies. So, Verdis chooses to maximize diversity across the number of companies, sectors and vintages because there is no clear indication in data that subsets of those are more likely to produce outliers but invest with a bias towards key geographies due to higher concentration of unicorns there. Most of the outliers in the US of the last decade came from two geographies - California and New York. The magnitude of these outliers was also significantly greater than unicorn companies built elsewhere. For example, on average it takes 4 non-California outliers to equal the magnitude of outcome of a California unicorn. Startup exit data from other geographies looks a lot more normally distributed which calls for a different approach. Data-driven investment strategy’s main drawback is the backward-looking nature of the approach. But it’s useful in that it provides a systematic approach to guide portfolio construction. If managers believe that the part of the VC asset class they focus on follows power law distribution, then they would want to have the most diversified portfolio as possible with a lot more than traditional 10-20 companies. In the power law world, losses don’t matter. One of the key insights from investing in venture for almost two decades is that most managers are going to stage-drift. Allocating to emerging managers who often focus on early stage due to smaller fund sizes and comfort with first check investing is one way for LPs to hedge against stage-drift. In Verdis’s view, low reserves and quick capital deployment cycle is advantageous to LPs focused on multiples not IRRs.Thanks for listening — if you like what you hear, please review us on your favorite podcast platform.Check us out on the web at www.villageglobal.vc or get in touch with us on Twitter @villageglobal.Want to get updates from us? Subscribe to get a peek inside the Village. We’ll send you reading recommendations, exclusive event invites, and commentary on the latest happenings in Silicon Valley. www.villageglobal.vc/signup

Raj Shah, Managing Partner at Shield Capital, joins Lucas Bagno and Ian Cinnamon on this episode. Takeaways:- Raj and Shield don’t care whether a founding team has experience selling to government, because the firm can help with that. They evaluate the team, the market and the tech when they’re looking at an investment.- Ash Carter was the first sitting Secretary of Defense to come to Silicon Valley in decades when he visited to jumpstart new initiatives to encourage startups working with government.- Raj recommends that startups work with organizations within the government that have a mandate to move quickly. - If a company decides to work with consultants, ensure that incentives are aligned such that the consultant benefits when the company benefits, rather than the consultant receiving a large payment regardless of the outcome.- Many more generalist investors have been investing in defense, but it’s a very difficult space to invest in. It takes time for investors to learn the jargon and the players.- When a company is evaluating and investor, it should ask two primary questions: 1) Does this investor truly understand the customer set? 2) Can this investor be helpful in company building in the boardroom?Thanks for listening — if you like what you hear, please review us on your favorite podcast platform.Check us out on the web at www.villageglobal.vc or get in touch with us on Twitter @villageglobal.Want to get updates from us? Subscribe to get a peek inside the Village. We’ll send you reading recommendations, exclusive event invites, and commentary on the latest happenings in Silicon Valley. www.villageglobal.vc/signup

Julio Vasconcellos and Ana Martins, partners at Atlantico, join Anne Dwane and Lucas Bagno on this episode to discuss Atlantico's Latin America Digital Transformation Report 2022. Takeaways:- In the rest of the world, digital adoption has reverted to the pre-pandemic mean, but digital transformation has continued at the same pace in Latin America.- Developers in Latin America are more likely to accept remote job offers and people working remotely have more satisfaction in their jobs than those working in-person.- Fintech deals continue to be 40-50% of volume in the region.- Latin America has a higher proportion of SMBs than any other region but they contribute less to GDP comparatively.- Brazilians are some of the most active internet and social media users in the world.- Julio and Ana say that there is an immense opportunity in this digital transition but that it still requires a lot of caution. Funding has been drying up as public market multiples trickle down to earlier stages. They recommend that founders be very mindful of cash and runway.Thanks for listening — if you like what you hear, please review us on your favorite podcast platform.Check us out on the web at www.villageglobal.vc or get in touch with us on Twitter @villageglobal.Want to get updates from us? Subscribe to get a peek inside the Village. We’ll send you reading recommendations, exclusive event invites, and commentary on the latest happenings in Silicon Valley. www.villageglobal.vc/signup

Mike Brown, former director of the Defense Innovation Unit, joins Lucas Bagno and Ian Cinnamon on this episode. Takeaways:- It can easily take 10-20 years for tech to make its way into the Department of Defense. The Defense Innovation Unit helped speed that process up dramatically.- Some of the most important technologies being used in the war in Ukraine are commercial technologies. Mike thinks that the Department of Defense should be focusing on commercial technology much more often.- Many founders don’t realize that government dollars are allocated for specific uses, i.e. marketing, or research and development, and those dollars can’t be used in another area, even within their company.- Commercial synthetic aperture radar technology used in satellites made a big difference in Ukraine. The US played a large role in developing that game-changing technology and Mike wants to keep it that way.- It’s estimated that there will be 1000 commercial satellites for every government satellite in the future.- Defense primes are great at integrating several technologies into a single solution. - Mike says that CIFEAS should be harmonized with our allies so that China and other countries can’t go to a different country and find the same tech.Thanks for listening — if you like what you hear, please review us on your favorite podcast platform.Check us out on the web at www.villageglobal.vc or get in touch with us on Twitter @villageglobal.Want to get updates from us? Subscribe to get a peek inside the Village. We’ll send you reading recommendations, exclusive event invites, and commentary on the latest happenings in Silicon Valley. www.villageglobal.vc/signup

Alex Moore (@AustinGiraffe), investor at 8VC and board member at Palantir, joins Lucas Bagno and Ian Cinnamon on this episode of Solarpunk. Takeaways:- Alex was one of the original team members at Palantir. He says that helping build the company helps him pattern match today to find the best founders.- Defense investing is not like normal VC investing. The usual model of investing $2M, then $10M, then $30M to give a company momentum doesn’t work when you have to deal with budget cycles, lobbying, and politics.- It typically requires $1B to get a defense company to IPO.- Alex would like to see procurement officers in the US government be allowed to be more entrepreneurial and for the government itself to move away from rigid line item budgeting, so that it wouldn’t take 2-3 years for high priority items to make it into the budget.- He would like to radically expand the SBIR program so that more contracts go to startups.- Governments should be picking winners, in his opinion. The best tech should win the whole market and the government should invest in the one big startup that will deliver massive scaled solutions.Thanks for listening — if you like what you hear, please review us on your favorite podcast platform.Check us out on the web at www.villageglobal.vc or get in touch with us on Twitter @villageglobal.Want to get updates from us? Subscribe to get a peek inside the Village. We’ll send you reading recommendations, exclusive event invites, and commentary on the latest happenings in Silicon Valley. www.villageglobal.vc/signup

Muneeb Ali (@muneeb), co-founder of Stacks, joins Erik on this episode. Takeaways:- Muneeb says that Bitcoin is winning as money, and that he wants to make that capital productive. He’s "bringing smart contracts to where the money is."- Bitcoin’s architecture implies that there shouldn’t be much flexibility and programmability on the base layer blockchain.- A criticism of Ethereum is that it is trying to be too many things to too many people.- There is a basket of Layer-1s that are gaining market share against Ethereum.- One criticism of Bitcoin is that there are only two things you can do with a wallet — sit on your BTC or send it to someone else.- Bitcoin has the most mainstream adoption and has “crossed the chasm” more than any other cryptocurrency.- All of the forks of Bitcoin are worth less than 1% of the current market cap of Bitcoin.- Bitcoin is very durable and resilient. Software created years ago for Bitcoin still works today, something that can’t be said about other chains.Thanks for listening — if you like what you hear, please review us on your favorite podcast platform.Check us out on the web at www.villageglobal.vc or get in touch with us on Twitter @villageglobal.Want to get updates from us? Subscribe to get a peek inside the Village. We’ll send you reading recommendations, exclusive event invites, and commentary onthe latest happenings in Silicon Valley. www.villageglobal.vc/signup

Dan Romero (@dwr) of Farcaster joins Erik on this episode. Takeaways:- Dan says that his first love was information. He loved RSS and the goal with Farcaster is to improve RSS enough so that it can compete with Twitter.- He aims to grow Farcaster large enough so that developers can innovate using their API and data permissionlessly.- Any developer can build whatever they want on Farcaster — features are not limited to what the core team wants to see built.- Eugene Wei’s Status as a Service theory is correct in Dan’s opinion.- They doubled down on the client and having a polished UX at Farcaster. Dan says that the platform is only as good as the number of people using it. The client helps grow the user base.- Dan believes in first principles thinking when it comes to product decisions. He strongly believes that the average user is not going to spend money to take action on a social network.- According to Tim Wu’s The Master Switch, all major communication technologies typically start out decentralized and become more centralized over time because centralization has tended to provide a superior consumer experience.Thanks for listening — if you like what you hear, please review us on your favorite podcast platform.Check us out on the web at www.villageglobal.vc or get in touch with us on Twitter @villageglobal.Want to get updates from us? Subscribe to get a peek inside the Village. We’ll send you reading recommendations, exclusive event invites, and commentary on the latest happenings in Silicon Valley. www.villageglobal.vc/signup

Nathan Picarsic, co-founder of Horizon Advisory, joins Lucas Bagno and Ian Cinnamon on this episode of Solarpunk. Takeaways: - There are 17 rare earth metals that are of immense strategic importance. They are used in a vast array of everyday products like consumer electronics, medical devices, electric vehicles, and more.- China has a strong influence in this space. They have many mines but are even more dominant downstream — they control much of the processing of these metals and the manufacturing of products from them.- Nathan says there should be more awareness of the geopolitical risks associated with rare earth metals, there should be more investment in the space within the US, and the US should work with its partners and allies to help secure the supply chain.- China’s ambitions to control rare earth metals intersect with their Belt and Road initiative and their Made in China 2025 strategies.- Nathan says that the US needs policy changes to combat this threat, including changes to the tax code to incentivize investment, encouraging more domestic and allied materials in the supply chain, using the Defense Production Act, and monitoring market manipulation by China.Thanks for listening — if you like what you hear, please review us on your favorite podcast platform.Check us out on the web at www.villageglobal.vc or get in touch with us on Twitter @villageglobal.Want to get updates from us? Subscribe to get a peek inside the Village. We’ll send you reading recommendations, exclusive event invites, and commentary onthe latest happenings in Silicon Valley. www.villageglobal.vc/signup

Joel Monegro (@jmonegro), partner at Placeholder, joins Erik on this episode. Takeaways:- Every financial asset is a contract between two or more people. The world economy is basically a set of contracts on a ledger.- A smart contract is like an API, but on-chain, so it can’t be taken down. In many cases, not even the developers can retract a smart contract.- Value capture and value accrual are two different things — capture is where the value is stored and accrual is where it is going. This is something that is often misunderstood about the fat protocols thesis.- The best way to think about smart contract networks is as nations. They enforce contracts the way nations do and in Joel’s opinion the ones that are most sovereign are the ones that are most decentralized.- Over time functionality and performance will come to be similar between networks and it is trust and governance that will differentiate them.- Joel expects 4-6 very large smart contract networks to emerge.- The core of decentralized social will be NFTs. The recent NFT craze reminds Joel of the ICO boom of 2017. Many were useless but there were lots of protocols and communities that remained.Thanks for listening — if you like what you hear, please review us on your favorite podcast platform.Check us out on the web at www.villageglobal.vc or get in touch with us on Twitter @villageglobal.Want to get updates from us? Subscribe to get a peek inside the Village. We’ll send you reading recommendations, exclusive event invites, and commentary onthe latest happenings in Silicon Valley. www.villageglobal.vc/signup