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December 16th, 2021

The Power of Collisions

Introducing El Cap

Collision theory states that when suitable particles hit each other, only a certain percentage of them will result in a change. These collisions are the ones with enough energy at the moment of impact to break existing connections and form new bonds. In many ways, El Cap’s story is one of collisions—where people, companies, and technologies combine in powerful new ways. This is how our partnership came to be, and it’s a core concept of our investment philosophy.

Before starting El Cap together, we took wildly different career paths. Stew, a Salt Lake City native, spent the first seven years of his career as an NFL linebacker. After retiring from professional football, he joined Goldman Sachs’ investment banking division on the TMT team. His experience there led him to Steadfast, a Tiger Cub hedge fund in NYC, where he invested in technology companies.

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December 15th, 2021

07.09.2021

The initial days of building a company are messy and complicated. Often more of a tactical exercise than a strategic one. Rather than trying to boil the ocean, the pragmatic move is to focus on a single wedge into a market, defining a use case that you can solve better than competitors. At this phase of building many aspects of a company are still being defined. One of these that is too often overlooked is defining the core concepts of your approach—crafting a narrative of the basic buildings that your products and operations are built upon.

It's worth drawing a distinction between a narrative of product/operational concepts and one crafted by the marketing team. While both important, the latter is much easier to change and not the focus of this post.

Generally, narratives get a bad rap. In large part due to VCs (myself included) distilling companies down to the elements they share with notable unicorns. [Insert business] is the Uber for [insert market]... Founders often push back when hearing these simplifications as having little practical use. Clearly, a narrative description of a business glosses over many of the nuances and subtleties that exist. But it is because narratives strip away details that they are easy to remember and highly transmissible. And it is precisely these factors that make them worthy of founders’ attention.

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December 15th, 2021

04.28.2021

The NFL draft is happening this weekend and having gone through that process myself, I can't help but look for parallels in the business world. The draft is a confined hiring game. A slightly warped microcosm of the broader labor market. And while the draft has rules in place specifically to give each team a fair shake, there are organizations that persistently outperform and others that consistently struggle—no need to name names… I see you Jets fans.

Throughout his career, Andy Reid, the head coach of the Kansas City Chiefs, has been one of those coaches that have persistently drafted well. Picking up Patrick Mahomes, the future league MVP, after nine other teams passed on him being a great example. I played for Andy in Philadelphia and he had a framework for navigating the NFL draft that has stuck with me. Don't draft for need, pick the best player available. It doesn't matter if you already have an all-pro quarterback and the current NFL leader in passer rating, as the Chiefs did in 2017 when they drafted Mahomes. If the best available player is a quarterback, that is who you should draft. This strategy boils down to a simple axiom: you can't coach talent, and ultimately, it is talent that wins games.

Clearly, there are practical limitations to this strategy for a business. Hiring a talented salesperson when you need a front-end engineer would be foolhardy. But there is still an important lesson here. To the degree you can, put the resume on the shelf and look for talent. Too many times I have seen a hiring process whittled down to a few candidates and the final decision is made based on prior experience. A choice that often proves to be short-sighted, particularly for startups where things can change quickly and the ability to adapt and learn is paramount.

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December 15th, 2021

08.18.2021

In Salt Lake City, a few blocks east of I-15 between a discount dentist’s office and a Maverick gas station is a squat brick building. There is no sign outside, no identification besides four sun-faded plastic stickers indicating the address. Inside, a large room with shoddily painted cinder block walls and a rubber padded floor is flanked by a tiny office and two small bathrooms. Weight racks holding a cornucopia of dumbbells, kettlebells, and plates from different manufacturers frame the room. Cast off remnants from a decade’s worth of garage sales. This gym is the antithesis of an Equinox and makes your local CrossFit look like a Four Seasons. Not a single mirror inside.

Since its inception, this gym has taken a unique approach to training and early on developed a cult-like following. So much so that the gym adopted the name Gym Jones, a tongue-in-cheek homophone to the late cult leader. The following exploded when the director Zach Snyder asked the gym to train the actors for an upcoming movie he was directing called '300.' While the quality of the movie is debatable, the fitness level of the actors is not. The growth in popularity attracted a clientele from backgrounds as diverse as the weights in the rack. Retired teachers, soccer moms, professional athletes, alpinists, triathletes, soldiers from special operations units, etc. This diversity would make you think the place was inclusive, and by many measures it was. It didn’t matter where you came from, what you did for work, how fit you were, who you loved, or how you voted. The only criterion for admittance was effort. And that was nonnegotiable. The audition was simple and open to anyone. Ten minutes on an AirDyne, maximum output.

The Schwinn AirDyne is an exercise bike first released in the late 1970s. You might have seen one in your grandma's basement. It uses wind resistance, which means the harder you pedal the more difficult it becomes. At the gym, fear of this geriatric exercise equipment was so great it was dubbed “satan’s tricycle.”

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December 15th, 2021

03.04.2021

The past year of working from my bedroom saw us get increasingly busy. As January rolled around, the frequency of Zoom calls reached a fever pitch, unscheduled time on the calendar felt like a rare treat, and the tenuous boundary between work and life all but evaporated. Facing an ever-growing list of to-dos is not unusual when building something new, I knew what I was signing up for. But as investors, continued learning is more than an optional exercise, it's a job requirement. Ensuring I was finding enough time outside of the daily blocking and tackling to do this learning was a must. For over a year we've been using a system we call Level Learning to manage our reading. But as the calendar got more chaotic, simply tracking the reading I was doing wasn't enough. I was forced to start scheduling reading time each week to make sure I wasn't falling behind. Reading is something I've always enjoyed, and over the years I've developed a decent sense of the pace I can absorb new material. It's worth noting that me carving out this explicit reading time wasn’t an attempt to increase my consumption, I was just trying to keep up. And while my reading pace stayed consistent, the insights and new ideas I was generating felt stunted and forced. It's as if the combination of work-from-home and an increasingly packed schedule had broken some aspects of how I learned.

As working from home became the new normal and people started weighing in on the pros and cons of leaving the office, time savings has often topped the list of benefits. A bulk of these savings come from the lack of commute, but that isn't the only source. All the time spent navigating a workplace that isn't also our living space adds up. The short wait for the elevator, the two minutes in the queue at the coffee station, or the walk to and from in-person meetings are all examples of little moments throughout the day when we couldn’t be sitting at our desks doing work. Let’s call this time, in aggregate, the friction around in-office work. And while I agree that losing this friction has potential benefits—I love the 6-foot commute from my bed to my desk—there are some elements about it that served a purpose. While it sounds counterintuitive, the friction around in-office work actually gave us time. Not more time for work, but the time when we couldn't be working. Time to think.

Unbeknownst to me, the friction around work had naturally injected a balance between ‘doing work’ and thinking into my day. Because I'd thought of that friction as waste, once it was gone I filled the extra hours by 'doing’ more work. More reading, more calls, more writing, all of which are good things. I had just failed to also carve out time explicitly to do more thinking. Looking back, I imagine myself these past few months as the knowledge worker equivalent of the Cookie Monster—bear with me. If you’ve ever seen the Cookie Monster eat a cookie, you may have noticed that while he chews, crumbs flying everywhere, he doesn’t actually swallow a single crumb. As I got busier I focused on making sure I was still chewing a lot of proverbial cookies, but hadn't worried about making time to swallow. Instead, I’d be on the next project, cracking the next book, taking the next call, or laboring over the next blog post.

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December 15th, 2021

04.21.2021

World Autism Month is an event each April centered around sharing stories and providing opportunities to increase awareness and acceptance of people with autism. A core part of that message is the concept of neurodiversity, the idea that autism, and other neurological differences like ADHD and dyslexia, are natural variations of the human genome rather than diseases to be cured.

Our five-year-old daughter Bo has autism. She is bright, curious, loving, and enigmatic. Like many parents, much of what I thought I knew heading into this gig has turned out to be either wrong or less than the whole picture. Bo has shifted my perspective on many aspects of life, but it is around human connections where her lessons have been most profound. She's helped me see parenting as a relationship to be nurtured rather than a skill to be mastered. She has shown me that being a good example is more impactful than giving good instructions. And she has highlighted that being present, fully, is table stakes for building and maintaining a strong personal connection. Looking back, I'm humbled at how far I had drifted from these fundamentals, and how stunted my facile generalizations of neurodiversity were, before our badass Bo came along.

Advocating for a neurodiverse child shines a harsh light on how we, as a society, view neurological differences. How these differences, which may be hard to see as an outsider looking in, so often go unnoticed, and how that ignorance can lead to intolerance and confusion. How we've only scratched the surface of fully understanding autism and other neurological differences. And how our collective lack of knowledge can make fitting into the world a herculean task for the neurodiverse. Bo opened my eyes to the potential of neurological differences in those around me, and in turn, helped me gain a deeper understanding and acceptance of my own idiosyncrasies. As someone with sensory processing disorder (SPD) and attention-deficit/hyperactivity disorder (ADHD), how I think about these conditions has shifted from a furtive suppression to a sincere sense of gratitude. My own differences are not something to be cured or embarrassed about, rather, they are core elements of what makes me 'me.' The idea that these elements of myself are somehow divisible is a fallacy. And through this growth in perspective, I've been able to embrace and even feel empowered by my differences.

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December 15th, 2021

03.27.2021

The recent run in crypto prices and the blossoming zeitgeist around all things blockchain has drawn comparisons to the dot com bubble. I have no plans to prognosticate on crypto prices, but I find the comparison fascinating given the role bubbles have played in major technology shifts over the past few centuries. Are there interesting parallels we can draw between today and those previous shifts? And what might those parallels teach us about the impact the blockchain could have on society?

Referring to everything that touches the blockchain as a single thing called the blockchain is a gross oversimplification of what is happening in the space. But it feels about the same as using the internet as a catch-all term for everything that touches the internet, YOLO. Plus, there is a reason for thinking about the blockchain holistically, as a single constellation of related technologies, and it has to do with technology revolutions and the work of Carlota Perez. Technology revolutions are periods of accelerated technological progress when new innovations are rapidly adopted and abrupt changes in society occur. If you aren't familiar with Carlota's work, she studied the major technology revolutions of the past few centuries and recognized a consistent pattern among the interplays between capital markets, new technologies, the global economy, and society. She observed that each revolution has two phases: (1) installation phase, when the core infrastructure needed for the new paradigm is built (highways for automobiles), and (2) deployment phase, where the technology gains widespread adoption and externalities emerge (increasing adoption of the automobile + highways = suburban expansion). See a graph of the In each of these revolutions, a key ingredient was a constellation of new and existing technologies that, when combined, enabled a paradigm shift. This is why looking at the blockchain as an agglomeration of related technologies can be useful, specifically when thinking about potential long-term implications.

Carlota Perez Technological Surge Cycle
Carlota Perez Technological Surge Cycle
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December 15th, 2021

02.17.2021

In early October, we decided to move from LA to Salt Lake City. My wife and I have roots in the area and the allure of being closer to family while we wait out COVID was too much to ignore. With a two-stage move from NY to LA already under my belt this year, I was eager to mix it up. My big idea was to rent two 26-foot U-Haul trucks, fly my Dad and brother in from Salt Lake, and make the drive ourselves. It would cut the cost of moving significantly and be a fun bonding experience to boot. It was only supposed to be a 10-hour drive. How bad could it be?

DIY baby
DIY baby

Turns out, a 26-foot U-haul packed to the brim and careening down an under-construction mountain highway is about as sketchy as it sounds. With the sweat from my hands running off the plastic-coated steering wheel into pools at my feet and stress-induced cramps spreading from my neck into my shoulders, I had serious doubts about the profundity of my plan. But at that point, what could I do? Stopping wasn’t an option. With no freeway exits for 60 miles and the fawnish hue of dusk quickly fading to black, my best option was to keep chopping wood, or in other words, stick to the plan and keep driving.