Framework
Inflections: be in the game when the cork pops
Sam channels Mike Maples' inflection framework — cultural, technological, or regulatory shifts (telemedicine, sports gambling, UFC legalization, the NCAA rule change) — arguing big businesses get built by founders positioned the moment the regulation cork pops out of the bottle.
“This is a perfect example of a regulation/political inflection that big businesses are built in times like this. I'm not going to be the one because I don't care about this, but this is the type of inflection that we're going to look back. Same with sports gambling, you know, those guys have been at it for years and years and years and it was pretty horrible businesses, I believe, for a long time. Something changed. Boom, they took off. Same with the UFC.”
Steal thisTrack regulatory and platform inflections (read Politico for law changes) and position yourself to pounce the moment one opens.
Framework
Mike Maples' inflections: bet on what becomes possible in 10 years
Sam relays Mike Maples' early-stage framework: you can't predict winners, so look for inflections that will make new things possible in 10 years and invest ahead of them. Uber's inflection was every phone getting GPS.
“So I try to use some frameworks and I just basically think like, you know, what interesting things, what interesting inflections are going to happen in 10 years that's going to make X, Y, and Z possible, but it's not possible right now. And I'm going to try and get into it. So like, for example, Uh, Uber, what made it possible was everyone started having really great phones that had GPS in it.”
Steal thisInvest ahead of inflections — find what a coming shift makes newly possible, then get in before it's obvious.
Framework
Be an apple, not a 5x better banana
Mike Maples argues breakthrough startups should force a choice, not a comparison. Instead of claiming to be an incrementally better version of an existing product, position as a categorically different thing that 100% of a specific audience will want.
“Let's say everybody's selling banana. You can't say I'm a 5x better banana. You instead, you should come out and say I'm an apple. And not everybody's going to want your apple, but 100% of the people who prefer apples are going to want what you have.”
Steal thisPosition your product as a different category, not a better version of an existing one, so the right audience self-selects in.
Prediction
Pending
Maples' four inflection waves for the 2020s
Maples names the four big inflections he believes will create the most opportunity: blockchain/crypto, cloud office (office culture to cloud culture), America Next, and cloud culture for consumers (the metaverse).
“The 4 things are blockchain, cloud office, America Next, the cloud culture for consumers. So those are like the 4 things.”
Framework
Don't think of a startup; find the inflection
Maples tells founders not to brainstorm startups directly, because that anchors you to the present and yields incremental ideas. Instead, identify massive inflections or waves of change, which let an entrepreneur wage 'asymmetric warfare on the present' and gain advantage over incumbents.
“I say, if you wanna start a great startup, Don't try to think of a startup. And, uh, the reason for that is that, um, great startup founders are like time travelers, and they, they get out of the present and they visualize different futures that are a breakthrough, that break free from the present.”
Steal thisStart from the inflection (a wave of change) and ask what new markets it unlocks, rather than starting from a product idea.
Idea
GitHub for documents: branch, fork, and merge knowledge work
Maples describes his portfolio company Almanac as bringing GitHub-style collaboration to documents. Just as GitHub made code social and Figma did it for design, document tools should let teams branch, fork, merge, and track every version, including when a forked employee handbook gets reused elsewhere.
“Why shouldn't you, just like GitHub, be able to branch and merge and fork documents and be able to, within that one document, know every version of that document that ever existed and everybody's— and if somebody forks it and uses it, let's say it's an employee handbook, if somebody uses it for their next company, why not want to know that as well?”
Steal thisApply the GitHub branch/fork/merge model to a category of knowledge work that still ships static files around.
Idea
GitHub for documents: branch, fork, and merge knowledge work
Maples describes his portfolio company Almanac as bringing GitHub-style collaboration to documents. Just as GitHub made code social and Figma did it for design, document tools should let teams branch, fork, merge, and track every version, including when a forked employee handbook gets reused elsewhere.
“Why shouldn't you, just like GitHub, be able to branch and merge and fork documents and be able to, within that one document, know every version of that document that ever existed and everybody's— and if somebody forks it and uses it, let's say it's an employee handbook, if somebody uses it for their next company, why not want to know that as well?”
Steal thisApply the GitHub branch/fork/merge model to a category of knowledge work that still ships static files around.
Take
Every person is a node that gets paid by the network
Maples reframes the worker-firm relationship: instead of one person belonging to one company, each individual is a node on a worldwide network with a comparative advantage, and the network pays them when they give it what it wants. He argues the modern corporation is just a 150-year artifact of mass production and distribution.
“But now I think the pendulum is, uh, swinging in the other direction towards, um, a worldwide network where everybody on the network, every individual is a node on that network, and every individual as a node on that network has a comparative advantage. And they get paid by the network when they give the network what it wants. And that's true for money, it's true for jobs, it's true for everything in my view.”
Fact
Network capitalism, not industrial capitalism
Maples explains why he invested in Lyft, Tesla, and Apple as software-defined, network-centric companies. Lyft replaced centralized taxi dispatch with an algorithmic 'invisible hand' matching riders and drivers; Tesla is 'a car company animated by networked capitalism.' He predicts these companies keep displacing incumbents that merely use computers to make industrial processes faster.
“And so why did we invest in Lyft? Lyft was a more modern way to think about getting a ride than taxis. Taxis are a centralized, command and control, tops-down, dispatch-driven technology. Lyft says, hey, riders and drivers can advertise their presence in real time on a network, and algorithms will form an ad hoc connection. So it's kind of like this return of the invisible hand.”
Framework
Find the intersection: best at, world values, passionate about
Maples' practical career advice for the network era: instead of mapping a 20th-century career ladder, find the intersection of what you're best at (among the things you're good at), what the world values, and what you're passionate about. That intersection is where your comparative advantage and your pay from the network are highest.
“what am I awesome at? Or maybe not even what am I the best in the world at, but what am I best at? Among all other things I'm good at, what am I best at? And then what does the world value? And then what am I passionate about? And it's like the intersection of that set of things is where you want to develop your talents because over time, that's where your comparative advantage will be the highest.”
Steal thisDevelop the talent that sits at the intersection of your best skill, what the world values, and what you're passionate about.
Number
90% of VC profits come from companies that started out as something else
Maples argues a startup isn't a company but the founders' insight and talent, citing that 90% of his fund's profits came from companies that started as something different: Lyft began as Zimride, Twitch as Justin.tv, Okta as Saasure, and Twitter nearly launched as Voicemail 2.0.
$90
Share of VC profits from companies that pivoted from their original idea · percent
“But like Lyft started as Zimride, and Twitter, they couldn't decide whether to call it Voicemail 2.0 or TWTTR. Uh, uh, Twitch started as Justin.tv. Okta started as Sasher. And so like, what do you do with the fact that 90% of your profits come from things that started out different?”
Fact
Startups need different mental models than companies
Maples notes that Buffett and Munger's investing mental models (operating history, competitive moat, customers) simply don't apply to startups, which have no history, no moat, no product, and no customers. Floodgate spent years developing roughly 30 mental models specifically for evaluating startups.
“If Charlie Munger and Warren Buffett have 90 mental models and they don't apply to startup investing, well, what are the mental models for startup investing then? And so we've spent years, right, just being students of that question. And you know, we've probably got about 30 or so that we've developed.”
Framework
Jazz band, not a marching band
Maples' team mental model: startups should run like a New Orleans jazz band where the lead riffs and everyone improvises along, not a marching band with sheet music and assigned dance steps. He also lays out the breakthrough sequence: insight, then product breakthrough (product-market fit), then growth breakthrough (escape velocity).
“In a startup, it's more like when you go to the French Quarter and you watch a jazz band there. The guy, the lead, goes on a riff and everybody else just goes with it, and you'll never hear that tune the same way ever again. But everybody knows that that's what they're in it for. And nobody's saying, hey, that's not on my sheet music.”
Framework
Jazz band, not a marching band
Maples' team mental model: startups should run like a New Orleans jazz band where the lead riffs and everyone improvises along, not a marching band with sheet music and assigned dance steps. He also lays out the breakthrough sequence: insight, then product breakthrough (product-market fit), then growth breakthrough (escape velocity).
“In a startup, it's more like when you go to the French Quarter and you watch a jazz band there. The guy, the lead, goes on a riff and everybody else just goes with it, and you'll never hear that tune the same way ever again. But everybody knows that that's what they're in it for. And nobody's saying, hey, that's not on my sheet music.”
Take
I'm a rocket fuel salesman
Maples describes his niche positioning to founders: he only sells 'rocket fuel' to those building rockets aiming for escape velocity. If you're not sure you're building a rocket, his capital and approach aren't right for your vehicle. It is a vivid way to communicate that his model only fits hyper-ambitious, zero-to-one breakthroughs.
“so I like to say I'm a rocket fuel salesman, and I go, I go to founders and I say, don't take my fuel if you don't want to achieve escape velocity with that rocket that's on the launch pad. 'Cause if you're not sure it's a rocket, this fuel isn't gonna be good for your vehicle.”
Take
Bitcoin is a country: a society organized by protocol
Maples reframes crypto networks as nascent societies. Bitcoin is a society of people who care about sound money, with the protocol acting as governance, the same way a country decides its boundaries, who gets in, and how to separate powers and protect individuals from the mob and the tyrant.
“What is a country really? It's a bunch of people who decide what their boundaries are, who decide who gets in the club, and they have a constitution where they decide how to separate powers and how to protect the rights of individuals against the mob and the tyrant. That's exactly what Bitcoin does with its protocol.”
Framework
Be a T: a mile wide and an inch deep, but a mile deep somewhere
Maples' learning philosophy: be a 'T' shape. Stay a mile wide and an inch deep so you can appropriate creative ideas from across the world, but go a mile deep in one area of true greatness. It is why he reads several books at once while returning over and over to a small number of great ones.
“I compare people like a tea, right? It's like a You want to be a mile wide, an inch deep, so that you just can appropriate creative ideas from the world. But then I think you want to be a mile deep somewhere, right? So it's like a T, right? And it's like, that's why you read several books at a time, but then you also go deep on a small number that are truly great.”
Steal thisRead broadly to harvest ideas, but pick a small number of truly great works to study deeply and revisit.