Startup Returns Take Decade

Shaan Puri shares his perspective on startup investing, emphasizing the importance of long-term thinking and the power of compound advantages. Initially skeptical, he now sees it as a valuable strategy due to specific competitive advantages.

• Long-term Orientation as a Competitive Advantage:

  • References Bezos's philosophy about long-term thinking being a major competitive edge
  • 10-year view allows for different types of bets than those needing quick returns
  • Ability to make lower-priced bets that pay off bigger over longer horizons

• Investment Returns Perspective:

  • 3.5x return is considered a solid but not remarkable outcome
  • Small funds can potentially achieve 15-20x returns
  • Some crypto funds have achieved 100x returns in similar timeframes

• Compounding Advantages in Startup Investing:

  • Reputation compounds over time
  • Network effects strengthen with each successful deal
  • Deal flow improves as track record builds
  • Previous successful investments attract better future opportunities

• Startup Investing vs Other Investment Types:

  • Unlike stock market, doesn't require being smarter than everyone else
  • Advantages compound faster than real estate
  • Network and reputation become key differentiators

• Personal ROI Perspective:

  • Owns smaller percentage in startup investments (slice of a slice)
  • Believes owning majority stake in personal ventures (like e-commerce) likely more profitable
  • Notes that owning majority of a $50-100M exit better than small percentages of larger exits

This investment approach leverages two key "superpowers": long-term orientation and compounding advantages, which Shaan believes most people undervalue.