A More Open World

I’m excited to bring my children up in a world where anyone can learn anything, anyone can invest in anything, where world class software/tools are free to use and customize, and where anyone can contribute to software development regardless of their physical location.

We have made progress on all these dimensions and we’ll see even more foundational progress over the next decade. I hope it will lead to a more open and connected world and empower more diverse groups of people to create amazing things together.

Caveat: To participate, people need access to an internet connected device, and this is still only <60% of people in the world. As internet becomes more widely available and the cost of devices and data goes down substantially, more people will have access to these opportunities and be included.


Open Finance

I hope that everyone will be able invest in anything.

New projects will have (near zero cost) legal entities automatically spun up in the background, regulations will allow all of us to invest in products with any amount of money and own equity (with drastically simplified legal agreements). These micro pieces of equity will be liquid and easily to other people and there will be clear, immutable record of all these transactions.

People of any age/location will be able to contribute to projects with their friends with both their time or capital. They will all be able to create and capture value without the need for angel investors or venture capitalists (who currently have to meet accredited investor standards). They will not be excluded from early stage investing. People in any country will be able to buy fractions of securities in any other country, diversifying their exposure (particularly important for emerging markets).

Syndicates (groups making an investment) are still really expensive and has high friction, despite the progress we’ve made. SPVs on AngelList cost about ~$10k to set up and run over their lifetime and so only make sense for investment rounds of a few hundred thousand dollars (which is a lot of money). Rolling funds can accept much smaller amounts of capital than traditional funds, but are still expensive to run and require capital scale to make sense.

Software will power the legal and financial framework for investing (combined withj adoption of cryptocurrency and smart contracts) and will be able to reduce the overall cost and hide the underlying complexity.

Ultimately, this will provide access to more asset classes to more people at any quantum of capital. This will lead to more projects getting funded, and more people generating wealth through owning equity vs. renting their time.

Open Learning

I hope that anyone will be able to learn anything.

Access to the highest quality teaching materials will no longer be locked in walled gardens and this content will be completely open. Many leading universities are already opening up much of their teaching content (e.g. Harvard, Stanford) and this is the mission statement of the Khan Academy which has helped people learn all over the world, for free.

Students will be able to learn (at their own pace) using whatever format works best for their preferred method of learning (e.g. watching videos, reading text, listening to audio). They will easily be able to then test their mastery with interactive problems and real world applications at no marginal cost. I, personally, learn better visually and orally and that is why I found lectures in college so useful (and why I watch a lot of YouTube videos).

Schools and higher education will need to adapt (culturally and practically) to asynchronous learning, and a more diverse mix of students in each class. One of the main benefits of school and college is the ‘cohorts’ of students who go through the shared experiences (much of which happens outside of the classroom) and I still think it’s important to try and create opportunities for young people to have shared experiences and work in groups.

I hope that higher education, in particular, will preserve the cohort and community aspect but there will be specific focus (v.s. community as a byproduct) on collaborating in groups, building lasting friendships, and creating stuff together.

Open Software

I hope that anyone will be able to build anything (software) and getting started with the best tools in the world is free.

Open source is a very powerful movement and, at scale, encourages global collaboration and development so that software can easily modified to meet local expectations and standards. One of the best examples is WordPress, which powers 39% of the top 10 million websites in the world with tens of thousands of contributors working together asynchronously.

Software is now being developed in the cloud first and new projects are powered by more self serve SAAS tools than ever (Slack, Notion, Figma, Asana, GitHub). I hope that all of these tools start free to reduce the barrier to try out these tools, and also reduces the barrier for projects to start and for people to collaborate. It also puts more pressure on SAAS software developers to build quality products, have quality customer service and continue to improve their products over time.

In order to build a sustainable business SAAS companies will need to charge for features that become necessary when projects evolve into businesses that scale. This could include customer support, security, performance, connectivity with other applications, hosting and payments.

I also hope that more SAAS tools expose more of their information via API (in addition to building integrated solutions) and give project owners more ownership of their data own (so they don’t remain locked into these tools). This will also be better for the ecosystem as more tools will be able to talk to each other and less information will be lost across different tools which will improve the quality and efficiency of software development.

Open Work

I hope that anyone can work from anywhere.

The Covid-19 Pandemic has catalyzed mass adoption of distributed work especially for technology companies. If companies can hire globally it significantly increases their accessible talent pool v.s. the constraint of hiring locally (along with many of other benefits). I’m a big fan of distributed work for software development, and write about it on my blog.

With more open work, people of all ages, races, nationalities will be able to collaborate on projects together, bringing more perspectives to the table. These products will end up being better suited for global audiences, as these perspectives and empathy will naturally make it into the product development process.

Workers will be more focused on collecting skills and knowledge vs. collecting brands. When we recruit now, we use proxies to infer skills or background; where we went to school, what companies we have worked at, or how we were brought up. This should evolve into showcasing our specific skills backed up by actual contributions to specific projects that roll up into a more accurate picture of our whole self. Companies will also become better at assessing skills, knowledge and experience over relying on brands as a proxy for the requirements for jobs to be done.


I’m excited raise my children in a more equitable world where less of their fate is decided at birth and I’m inspired and hopeful at the progress we are making globally.

We will see continued improvement in social and economic mobility, better products from more diverse people and more collaboration across groups with different ages, genders and countries. 

Crypto Investment Strategy

Bitcoin has increased by 300% in the last three months from $10k (Oct 3) to $33k per $BTC (Jan 3). Ethereum has also increased by 270% in the same period from $350 (Oct 3) to $950 (Jan 3) per $ETH.

I started buying Cryptocurrency in early 2013 ($BTC mainly) mainly because I thought it was an interesting concept at ~$50 a coin. I ‘lost’ most of these coins as part of the Mt Gox Bankruptcy in 2014. I’m hopeful that 10-15% of our holdings may be returned soon, after seven years of waiting.

The US government has printed more than 20% of the total USD in circulation in 2020 alone (over $USD 9 Trillion) and many people have no idea we just got a lot poorer. Given this is happening globally (across governments) I’m starting to think that I should have a more significant percentage of my savings in $BTC and cryptocurrency in general over fiat ($USD). There are also lots of other benefits/value of cryptocurrency beyond inflation protection but I won’t cover them here.

Ultimately, I’d like to allocate 10%+ in Crypto, 20% in technology companies (private), 30% in real estate and 40% in public equities (mostly in tax advantaged retirement and non liquid accounts) but this will take many years and a good amount of luck, too 🙂

Given these observations, here is how I’ll modify my strategy going forward.

Crypto Strategy

  • Focus on $BTC and $ETH: Most of my $BTC is locked up in Mount Gox, and this counts towards my overall allocation. I assume around 15% of coins returned at some point as $BTC (not fiat). My next largest position is ETH which I’ve had for years. I plan to hold BTC/ETH/All Altcoins in a 70/20/10 ratio in terms of USD fiat value.
  • Regular Purchase: I started taking 15% of my paycheck (2x per month) and purchasing $BTC and $ETC in the correct ratio (80/20), which I would ordinarily leave in fiat in a savings account. I’ve been doing this for about a month. The goal here is to remove emotion from the decision and dollar cost average over the next few years.
  • Crypto Savings Account: I started to move most of my $USD out of Marcus (CDs) into BlockFi (referral link). I have kept some $BTC and $USDC (a USD stablecoin) for the last 6 months or so, and I’d rather make 6-8% interest over 0.5% interest in alternatives. Note that BlockFi is not risk free (they are lending like banks do) but they do have some strong security measures in place.
  • DeFi: I have positions in all the stuff powering Decentralized Finance (DeFi) on the Ethereum network, but that is mainly for fun (which is how $BTC started for me anyway). I play around with staking, liquidity pools and lending but beware the large gas fees (I got burned). My largest position is in this DeFI Pulse Index (https://defipulse.com/blog/defi-pulse-index/) which is a weighted index of all the tokens powering DeFi.
    • Feb 5 Update: Given all the growth in the last 30 days this has now also evolved into a more ‘core’ position.

I also hold small amounts of other Altcoins like Stellar Lumens ($XLM), Polkadot ($DOT), Ripple ($XRP), Filecoin ($FIL bought in the 2017 SAFT), Arweave ($AR), UNI ($UNI), Sushi ($SUSHI), Cosmos ($ATOM) as well as about a dozen others, but those are more out of interest than part of an actual strategy. I also added NFTX as an index for collectibles to the mix.

All of this is still very experimental, and I wrote this up to share more easily and get feedback. Despite dabbling for eight years, I still feel like a n00b most of the time in the crypto world.

Decentralized Game Development

There has been a movement towards decentralization of content creation in many industries (Youtube for video, WordPress for writing, Podcasting for radio). These creators and storytellers now have the tools to deliver high quality experiences (without massive budgets) and have access to distribution platforms to find and grow audiences, which was very hard to do in the past. I think there will be a movement towards the decentralization of game development next.

The power of games is in the mechanics, the stories and the world. Even for large game studios, the visionary is usually one or two people (also true for Pixar Movies – see Creativity Inc for more). However, most of the cost and the time for games is spent in the ‘production phase’ for AAA studios which means many independent game makers cannot compete with large franchises.

If small, independent teams had access to free/cheap and high quality game engines, reusable off the shelf content (entire rule based worlds + logic), asset libraries (textures, photogrammetry, user generated) and common game mechanic libraries (leaderboard, ELO) then their focus can be on the story, the world, the core gameplay.

Flexible, cross platform game engines like Unreal and Unity are not quite good enough yet to realize this vision although I think we will get there very soon. I spent some time in 2017 making a VR film entirely in Unity and was really impressed by the power and flexibility of the platform.

My mind was blown when I learned that The Mandalorian was made in a single room and all the worlds were created in Unreal and rendered in real time during filming on massive LED screens (short video below).

Game distribution platforms like Steam, Google and Apple App Stores (and communities like Discord) are going to become even more powerful and influential for creators to find players and engage with them (and each other). Franchises will still be very powerful, but independents will be able to access (niche) audiences much more easily than ever before. I think there will be a lot of pressure on app stores to reduce their take rate as 30% feels much too high. Epic and Unreal have the most developer friendly agreement I know (free to use and then 5% after $1M in sales)

I’m particularly excited for young people (even children) to be able to have access to the tools that will allow them to conceive, create and publish games the same way we publish a blog, podcast or youtube video today. Roblox is a great example of a game creation tool that embodies these principles (30M DAU, 7M Active Developers & $600M Revenue) and has exploded in popularity over the last few years, especially with young people. It still lacks the power of Unity and Lua is not that easy to learn for non-technical folks.

There is a lot of innovation on both creation and distribution that will continue to empower creators. Combined with the general trend in ‘no code development’, this will democratize game development which, I hope, will continue to become more mainstream. The game engines and distribution platforms are very well placed to both create and capture value over the next decade if they build for the long tail of creators.

Finally, more of our social lives are now lived online and combined with lasting effects of physical distancing (from Covid-19) this will accelerate the development of games where people can have meaningful, deeper interaction online. For example, I play Fortnite with my nephew in Paris (he’s 9), from America and it’s a really nice way for us to have fun together and hang out.

My family and friends live all over the world, and I’m rarely physically present with them. If we had more options to socialize over games (both simple as well as immersive) maybe even made by us together, that would be pretty dope.

Creating Liquidity in Private Markets

Two of the most significant issues with private market investing are their inherent illiquidity and the unpredictable nature of exits. It means that you need to ‘invest and forget’ when investing in private markets, and is particularly true for angel investing. This problem also applies to equity based compensation for employees at startups, where employees are unable to realize value even when the business has increased in value.

I believed this problem will be solved over the next few years. There will be a number of new options for liquidity in the private markets and early stage investing is going to become even more attractive to even more people. I also think that the US government will make further relaxations to the accreditation rules that restrict investors from making certain investments based on their net worth or income (originally intended for their protection).

For late stage (pre-IPO) private companies there are a number of platforms (e.g. Forge, EquityZen) working on the liquidity problem, but very little is automated. Typically ‘blocks’ of equity become available either in secondary offerings (existing holders, like an early employee selling their stake) or when early investors have pro rata rights to a future fundraising round and can’t fill it themselves. I’ve used these platforms from a buyer’s perspective (and explored as a seller) and it’s all fairly manual right now, and the products are mostly a nice user interface. There are also more traditional alternatives like Setter Capital who don’t claim to be a technology platform.

In real estate, companies like Cadre are both providing access to large real estate projects to small investors (breaking up allocations into smaller chunks), and providing “windows” where investors on the platform can sell portions of their positions (every 6 months or so). This both increases the number of investors who can invest in the asset class (lower minimums) and improves the exit options for investors who would typically have to hold their equity position for 5-10 years.

In the future, I expect platforms like Carta and AngelList to lead the way in creating a true ‘marketplace’ for private securities. Carta just announced their new liquidity platform CartaX, a private stock exchange which is an awesome innovation launching in January 2021. It’s a natural extension of their business model, and I’m excited to try it out. Angellist will also continue to innovate, especially because of their SPV and fund offerings, as they hold a lot of private company stock (and have access to a lot of data).

There are some problems that need to be solved such as restrictions on employee stock, rights of first refusal and companies at the early stages desiring control of their cap table. I think these are all surmountable, and most of the trading will start with late stage private companies first, where these concerns are less relevant.

Overall, these developments make me even more excited to continue angel investing; as private company stock becomes more liquid, it’s value will increase (in addition to normal value creation through growth). Ultimately, it means that more investors will invest in private companies and they can have more of their capital ‘working’ (and need less of a cash buffer) because they know that there will be a liquid market in case they need the capital.

Democratizing VC Investing in Africa

Most people don’t have access to investment opportunities in either emerging markets or private markets. Access to early-stage investing (venture capital), in particular, requires prohibitively high minimum amounts of capital, and emerging markets investing requires specific knowledge and access. While it would be rational (both for diversification and long term gain) for many investors to have part of their capital allocated to these segments, most investors are over-exposed to both traditional asset classes (public equities/bonds) and their home markets and lose out on the benefits of diversification. This needs to change. 

I strongly believe that there is a tremendous market opportunity in African entrepreneurship and technology over the next decade. I’ve been an active angel investor in Africa for six years (and a global angel investor for ten years). I’ve set up a rolling fund focused on Africa to offer more investors in my extended network access to early stage investing in Africa. 

This new fund is my small contribution towards democratizing access to global, private markets which have long been difficult to access. It has some additional benefits, including over 10x lower minimum commitment amounts and 10x lower management fees, and I am personally one of the largest investors, which is all atypical in the industry. 

Access to private and global investments

Over the last decade, technology has enabled many notable trends towards democratization and decentralization — in publishing (blogging), television (YouTube), and radio (podcasting) to name a few. As platforms and tools continue to evolve, I believe this trend will extend to more industries (including private investing), and I’m excited to contribute towards this movement.

Access to private investments is becoming increasingly relevant and important; public equities are now more concentrated than ever, and actively managed public funds have been replaced by ETFs. This Morgan Stanley report summarizes the increased capital allocations over the last decade towards private investments driven by technology investing — and these investments have historically been impossible to access for all but the very wealthy, or large institutions (pension funds, endowments, etc).

Source: Morgan Stanley

Most individual investors have a more limited set of assets that they can access and are excluded. This results in individuals being overexposed to the most liquid, tradable assets (e.g. public equities in the USA). 

In addition, individual investors are typically over concentrated in their home markets (real estate, stocks, etc) relative to their net worth – foreign markets are harder to understand, and can be legally complex. I believe that there will be significant value created in global, and particularly emerging markets over the next decade. The data point to more and more entrepreneurs building businesses in their home countries (even after a tier 1 US education) versus trying to build their companies in entrepreneurial hubs like Silicon Valley and the USA. Over 40% of Y Combinator founders are now international, and the vast majority want to build their businesses in their home markets. This trend has been accelerated by Covid 19, and the rise of distributed work which allows for much better labor mobility regardless of physical location. 

Source: Vanguard for public equities 

AngelList (Rolling Funds) have built tools for angels to accept small amounts of capital from external investors, and invest this capital globally which was very hard and expensive previously. My rolling fund was developed to democratize access to investing in private markets (venture capital) in Africa; more details in the next section. 


Investing in VC in Africa

There is significant market potential in Africa – many young people ready to work (median age of 19), increased urban mobilization (45% living in cities by 2025), high smartphone penetration (50% and growing fast) with digital finance access, and increasing capital and talent flows into African technology hubs (e.g. Nairobi, Cape Town, Lagos).

This year we finally saw the start of technology company exists, where seed investors realized over 30x their capital. Stripe bought Paystack ($200M), WorldRemit bought SendWave ($500M) and GoDaddy bought Over.

I am passionate about advancing the technology ecosystem in Africa. I was born and raised in Mombasa, Kenya where my family has lived for five generations. I have a strong network of co-investors and local entrepreneurs, several of whom are investors in this fund. I’m a Kenyan, a product manager, and an entrepreneur, and my experience (including building technology products in Africa as an operator) allows me to have empathy for founders on their journey. 

I’ve been personally investing in technology companies in Africa since 2014 through Musha Ventures, and am now excited to allow others to participate in these deals. Over the last six years I have backed 35+ African companies in 8 countries with an IRR of over 36% (based on future fundraising rounds) and MOI of 1.7x. The portfolio includes companies like Flutterwave, mPharma, Sokowatch, Branch, Twiga and Kobo360.

Here are some of the important details:

  • 10x+ Lower Investment Minimums: Investors are able to invest in this fund with as little as $2.5k per quarter whereas most VC funds have a $250k+ minimums for LPs. Investors will need to meet US-Accredited Investor requirements to participate.
  • 10x Lower Management Fees: The fund has a management fee of 0.2%, to cover basic running costs, which is 10x lower than the industry standard. This further helps to align incentives; I earn carry when investors make positive returns. 
  • Alignment of Incentives: I’m personally one of the largest investors in the rolling fund, as this is an extension of my existing angel investing. This is not funded through deferred management fees, it is capital that I wire into the fund just like every other investor.
  • Consistent Investment: I intend to invest conservatively and consistently into companies across Africa over many years. It’s very hard to ‘time the market’ and so we will instead focus on factors we can control like amazing entrepreneurs, evidence of traction, product quality and delighted customers.
  • Investing in B2B: We are focused mainly on startups that serve other businesses — particularly fintech, marketplaces and software as a service technology companies. We may make the occasional consumer investment, but think that business is the foundation that comes first.
  • African Entrepreneurs’ Fund: For entrepreneurs building businesses focused on Africa (and particularly portfolio company CEOs), they are able to invest in the fund with no fees or carry. This is my attempt to pay it forward, and also get even better deal flow from my network due to further aligned incentives.

I believe in the power of being transparent, which I hope will allow me to build new relationships and deepen my current relationships – it’s why I’m publishing this openly. 


Want to learn more? 

If you’d like to get in touch please fill out this short form and I’ll reach out to you so we can get to know each other better. 

If you’d like to see more detail on the fund (market opportunity, detailed investment history and fund terms) please check out the rolling fund page (https://angel.co/v/back/musha-ventures). 

Trends Accelerated by Covid-19

Covid-19 has led to significant changes in how we live, work, and interact with each other. In some cases, they have accelerated trends that were already in motion, and in other cases forced changes that we did not anticipate or expect.

In the next few years, I think we will go through a rapid pace of innovation and re-imagination powered by entrepreneurs, and here are a few trends I’m excited about and interested in exploring further.

Distributed Work

The best summary I’ve read on the acceleration of distributed (not in person) work is this one from the CEO of Automattic, Matt Mullenweg where he talks about change happening slowly, and then all at once driven by this catalyst. Automattic has been fully distributed since its inception, and Matt has been a champion of distributed work for years and the benefits of accessing a global talent pool, and working asynchronously.

The #WorkFromAnywhere Podcast series led by the folks at Greylock is also excellent and CEOs of companies like Box, Quora, Okta, Figma and Zapier speak about their transition to working from anywhere.

I’m particular excited about the tooling that will be developed, both in terms of specific software as a service products to drive much better distributed collaboration, but also the underlying plumbing that ties all these tools together.

ECommerce

This article from Ben Evans on the growth of eCommerce is a must read. The UK went from 20% to 30% eCommerce penetration and analysts say that Covid has accelerated the growth of eCommerce by 5 years. This is dramatic, and will change the way may of us purchase, discover new products, and how creators distribute their products.

This also changes the nature of distribution/logistics and the entire supply chain. Companies like Shopify and Amazon have doubled their market cap (adding over $60BN, and $850BN (!!) of value respectively to shareholders since mid March 2020).

Major Cities

The nature of major cities and concentrated urban areas is going to evolve. I wrote about my thoughts on megacities recently here, and I also liked this piece from Fred Wilson about how a reset was much needed in NYC and how the city could evolve into something better. Many of my friends have ‘accelerated’ moving to their ideal living areas and and left places like NYC and London. My wife and I, having just had our first baby, are asking ourselves the same question – is it worth staying in NYC if we don’t intend to stay longer term? The pandemic has forced a conversation we likely would not have had for a few years.

Flexible Work

I believe that the best creators and experts are no longer going to need a ‘normal job’ and will be able to work flexibly and monetize their unique skills talents much better than before, and this will be socially acceptable and maybe even celebrated. I like the writing from Li Jin (Atelier Ventures) about the Passion Economy and Unbundling of Work from Employment (which I also opined on here).

Startups will create innovative tools, and platforms to help craftspeople to discover projects, collaborators and showcase their work (e.g. Contra). Much of the benefit that we get from a ‘normal job’ (e.g. competitive healthcare insurance plans, retirement accounts, etc) will also be available to creators through saas products.

Building Relationships

As humans, we yearn to build new relationships and deepen relationships with folks that we already know. Traditionally we’ve built these relationships in person with repeated interactions and meaningful collaboration on projects. Being forced into lockdown has forced us to explore alternatives.

I’ve personally been experimenting with platforms like Enrich (curated network of similar executives), Fractal (1×1 matching with other product people), Village Global Events (with startup founders and investors), and am starting the On Deck Angel Fellowship soon. These are all digital communities with fairly niche audiences, which I think will become more common.

I’m hoping that these will lead to meaningful relationships and collaboration and also improve the chance for serendipity despite not being able to spend time with folks physically. I’m excited that these platforms could open up the possibility of meeting interesting people all over the world, and not just limited to my place of residence.

I’m not sure how this will play out with larger conferences, where most of the value is in relationship building and improving the probability of serendipitous connections often through extended hang out time (often over meals and drinks). I expect that recreating much of the value will be possible, but will require some first principles thinking.

In my own recent experience, I wrote about how the funeral for my grandfather was actually much more inclusive and rich because it was virtual and allowed for more people to attend that were close to him (like his sisters).

Personalized Services

Folks who provide coaching, classes or specialized services are all going through a similar, accelerated transition.

Companies like Peloton have successfully taken spin classes and made them virtual, allowing both synchronous and asynchronous (on demand) classes with world class instructors. Each class can now be attended by step function more people which greatly improves the ROI for each class.

Experts providing specialized, personalized services like physiotherapy, child psychology, lactation consulting can all increase their addressable customer base and people who are in need of very specific services can access a larger pool of specialists which is better for both groups. They both need tools to make it easier to discover each other, and improve the experience of booking and transacting (e.g. Ribbon Experiences).

Digitial Payments and Services

Digital payments and digital services (e.g. digital hr, or payroll) to help businesses transact with their customers and run their teams will also see more new users, and increased adoption. I think these products will be ultimately sticky even after Covid-19 because they function better both in person and remotely, and allow for more flexible customer and employee interactions. In my personal investments in these areas I’ve seen increased volumes and good retention through the pandemic.


These are just a few areas where I’ve personally observed changes in my own life or with folks close to me, and I’m excited to learn more and closely track how these trends evolve.

Evolution of Megacities

I live in New York City, and have been thinking about how I think large, densely populated cities (in developed markets) will evolve after Covid-19. I don’t think the soul of the city will change, and reading Here is New York (by E.B. White) from the 1940’s affirms this, but I do think the city will go through an evolution over the near to medium term.

New York City has gotten more and more expensive which has resulted in it shrinking (net population loss). The growth of the suburbs continues to be good (across the US) particularly from immigrants who tend to have less disposable income and seek better value for money. This podcast episode with Alex Danco and David Perell also is a fun discussion on the subject that is worth checking out if you’re interested in the subject.

The continued rise of eCommerce/delivery, distributed work and autonomous vehicles, are all shifts that are likely going to accelerate changes in megacities (some of which were catalyzed by physical distancing).

Fully distributed or partially distributed is a particularly powerful trend as many technology and finance jobs may no longer require living in places like NYC as a prerequisite but can still pay the same wages.

Here are a few of my predictions:

  • Offices centered around collaboration, not individual contribution: Office in the future will look different. I imagine they will have more meeting space, and more collaboration space versus single person desks designed for individuals. These collaboration spaces will be shared, and only a portion of the company will be in the office on any given day.
  • Less office space, more (and larger) residential spaces: Individual contribution work will happen outside the office, and much of it from home or other flexible work spaces (coffee shops, shared office space). Office space will be repurposed into residential space or other gathering (e.g. bars or restaurants) or ‘multipurpose’ spaces. Homes will be larger to accommodate flexible working spaces or dedicated offices.
  • More young people, more old people and fewer families: Young people love densely populated places, and so do healthy empty nesters. Megacities will have more of them particularly as empty nesters are fitter and healthier for longer. The food, culture and nightlife scene will become even more vibrant.
  • Growth of the suburbs around megacities for families: Families all move outside the city epicenter, where dual-income parents can still easily go to their offices for occasional collaboration sessions (e.g. 1-2 times a week) but spend most of the time working from their home. The quality and comfort of these homes becomes even more important for families. The transport from homes to offices becomes even easier and faster because of driverless cars (5-10 years away).
  • More pedestrianized, car free zones, and even more delivery: Purchase of ‘staples’ happens more and more via delivery vs. in person and ares of the city (e.g. Flatiron) become fully pedestrianized and cycle zones with delivery permitted during certain windows.

I don’t have any real unique insight into this topic, beyond personal interest. I’ve spoken to a number of business owners who are not extending their office lease, and also a number of friends (particularly with families) who are leaving the city for the suburbs.

I would personally not invest in real estate in Manhattan over the next few years until we see how it’s going to shake out. I think that investing in the city suburbs, and in ‘up and coming’ cities with net population growth, growing income/capital and with great culture but lower cost of living is likely still a solid call.

Angel Investing Learnings

In this post I’ll share some advice and learnings from a decade of angel investing to help others get started or improve their own process. In general, I’d advise investing in companies where you have some asymmetric advantage – either because you know the founder(s) well or because you know the space well.

I’ve been investing in startups for about 10 years through Musha Ventures, after learning the ropes at Index Ventures. I’ve made ~70 investments (around 40 in Africa), and realized around twice my total invested capital (Distribution to Paid in Capital – DPI). Most of the companies in my portfolio (~55) continue to operate without a realized liquidity event.

I love meeting and learning from founders, and being exposed to different business models. When I support a company, I am able to learn from observing its journey and build relationships with the founders beyond my small investment. I think that early stage investing has made me a better product person and operator, and I hope to continue to keep investing in entrepreneurs throughout my life.

Investing Frameworks

Ben Holmes, Index Ventures

I worked with Ben Holmes at Index Ventures, who led their investments in King, iZettle, and Just Eat. He showed me a simple framework, which is still the foundation of my investment evaluation process, detailed below. At least one dimension of Team, Technology or Traction should be an A+, and a big enough Market (now or in the future) should be a precursor to making the investment.

  • Market: Is the market big enough ($1Bn+) and can you see this company being a leading player (with 10%+ market share) in the next 3-5 years? If you think that the market now or in the future is too small, then don’t make the investment.
  • Technology : Is the product or technology differentiated and sticky within their market? How difficult is it to replicate?
  • Team: Is the founding team both individually exceptional and complement each other? How deep and long is their professional relationship?
  • Traction: Is the business growing and do they have positive unit economics? Do they have paying users? What does customer retention look like?

Brian Singerman, Founders Fund

I don’t know Brian Singerman personally but I really enjoyed this episode of “Invest Like the Best” with him. He’s invested in companies like Oscar, Affirm, Wish, and AirBnB. Here are a few of my takeaways from the conversation:

  • As a startup market, moats and execution are the only things that matter.
  • As a VC, seeing, picking and closing are the only things that matter.
  • You learn to invest in startups by actually investing, not by observing.

Investing Advice

This is a collection of advice when you are starting to invest, in no particular order:

  • Learn with small investments: Optimize for learning per dollar invested if you are just getting started, have limited capital and hope to build a portfolio. If you invest $1k with the same diligence process as if you were investing $100k, then you will learn by making less expensive mistakes early on.
  • Take it slow: Start early in your career but start slow, and invest more frequently as you improve your judgement – I made too many investments in my first year. It takes a long time to calibrate your gut because it can take 10-15 years to figure out if you are a good investor (but you’ll get some validating and invalidating data points along the way).
  • Asymmetric Advantage: Invest in areas where you have some asymmetric advantage. If you know a founder super well, or know a space really well and can invest in a related company (without conflict) these are sources of asymmetric advantage.
  • Time vs. Money: Invest money in companies that you would be willing to spend your time on personally, but may not be the right personal trade off for you. When you are earlier in your career you can think of time and money as interchangeable. If you don’t have the capital to invest, then try and join these companies and get some equity for your time.
  • Deep Relationships: Invest in great teams who’ve known each other a long time and even better worked together for a while – it reduces the risk of founder issues (65% of company breakups are for this reason).
  • Founders you like and respect: I invested in a few companies that I did not have the best rapport with personally, or had an unexplainable ‘gut’ reaction to avoid even it if looked good on paper. Most of these companies did not work out, but I have a small sample and so this still needs more data.
  • Company first, then terms: Terms are less important than believing in the company and the founders. Don’t make an investment because of a low valuation or tax incentives – these are all bonuses, and never a reason to make an investment. I made a number of mistakes here early on and regretted them.
  • Valuation: If you are going to negotiate on anything, negotiate on price although this is mostly supply/demand driven and you may not have leverage if you are a small investor. There is a common belief that valuation does not matter in venture capital, but if you are investing your own money then overpaying consistently will hurt your returns.
  • Get written answers: When I have follow up questions, I usually send them over email and look for an email response. This is an indication of how clearly they think, and communicate. It is also more efficient for me and I have a permanent record.
  • Cap table: Look for ‘clean’ cap tables (equity split) in early rounds. If the founding team has an unexpected equity split, or there are early inactive employees/ investors significant equity it can affect the company’s ability to raise money in later rounds and if founders are too diluted, then they may lose motivation.
  • Discipline: Founders who are structured and regular with investor communication are often also good operators. If they show discipline with investors, they are likely applying the same discipline to running their companies. I often ask for the last investor report to get a sense of their communication quality.
  • Metrics: Founders should be super on top of their key metrics, growth rates, revenue distribution, burn rate etc. This shows that they both track them carefully, and review them frequently.
  • Pace of iteration: At all stages look for pace of iteration and product development. Teams that ship more often and test more hypotheses are likely to have better products and build long term sustainable advantage.
  • Sleep on it: Even when I really like a company, I always sleep on the decision and never commit after a meeting. If I still feel good about it the next day, then I’ll message the founder to invest. Try not to get pressured, or react to FOMO and make a decision too quickly or without conviction.

Practical Tips

This is a collection of more practical/tactical things to do when you are investing:

  • Track your portfolio: If you only make a handful of investments, then think of it as money spent and a nice bonus if one of them is successful. If you have a portfolio, then keep a strict record of your investments and track their progress and returns (I use a simple Google Sheet). I track key dates like fundraising events and summarize the status of each investment about once a year.
  • Write Memos: Your memory is less reliable than paper record, and so I recommend writing short 1 page memos with the ‘why’ behind your investment. I’d start with the structure I outlined from Ben Holmes up above and expand it over time.
  • Customer References: For software as a service businesses in particular, do some customer reference calls. I always ask the following three questions: What was it like before the product? What is it like after the product? What would happen if you took the product away? If they get very upset at the last question happening, that is a very good signal.
  • Post Mortems: If companies fail, write a few bullet points down about why the company failed (I just add them to my original memo), and see if you identified the risk when you made investment. Learn from this, and don’t repeat mistakes.
  • Intro Email: I’ve just started writing an ‘intro’ email to founders which founders seem to appreciate. It allows you to clearly express how you can help, how you operate as an investor, and share some of your expectations as well.

I’ll continue to add to this list as I learn more, and please send me any thoughts or feedback!

A Virtual Funeral

My great uncle, Taher, passed away this weekend at the age of 98 years old in my childhood home in Mombasa. He was more like a grandfather to me, as I grew up in the same house as him and saw him every day and my paternal grandfather died many years before I was born. He lived a long and loving life, I will miss him and always think of him when I have soft serve ice cream (his favorite).

Current conditions made it impossible to travel to Mombasa but we were able to have a virtual service for him (over Zoom) a few days after he died. Around 100 people attended from many countries around the world to celebrate his life and one of our family members even organized a priest to come and officiate.

In many ways the service was more inclusive and better than an in person ceremony. We were able to welcome people who would not have been able to attend – because of the distance, cost, time, or their ability to travel (age, health or dependents). Both of his surviving sisters in their 90s were able to brave the technological challenges to say a few words in his honor and we were able to share some photos and memories by sharing our screens and taking turns to speak.

I missed some of the tactile elements of being together (like giving folks a hug), and the longer in person time after the service. However, the positives outweighed the negatives given how quickly it all happened, and how difficult this kind of situation is for people to plan for.

Zoom Service

In a time where most of the focus of the web is how we can adapt to working in a distributed way, it’s also wonderful to see us use these tools for bringing our communities together for a shared purpose as well.

Seeking Leverage

Leverage allows us to amplify the impact of our creations and decisions. If we apply leverage to these things we can create more value for the amount of time invested. Leverage is not easy to attain, and the different forms of leverage either don’t scale easily or require specialist skills and the ability to distribute creations effectively. I’ll summarize the inspiration behind this post, and then go into the different types of leverage below.

Inspiration

I listened to Naval’s Podcast Series a few months ago – I don’t love the title of the series, but I agree with many of his principles. Here is a link to a set of Tweets from him which are a little faster to digest, which catalyzed the podcast.

Here are a few of my favorites from the Tweets:

  1. Seek wealth, not money or status. Wealth is having assets that earn while you sleep. Money is how we transfer time and wealth. Status is your place in the social hierarchy.
  2. Pick business partners with high intelligence, energy, and, above all, integrity. Don’t partner with cynics and pessimists. Their beliefs are self-fulfilling.
  3. Learn to sell. Learn to build. If you can do both, you will be unstoppable. (Aadil Note: The two things we were never taught at business school).
  4. Leverage is a force multiplier for your judgement. Fortunes require leverage. Business leverage comes from capital, people, and products with no marginal cost of replication (code and media).

Gated Leverage

Gated leverage requires an outside party to agree to give you leverage and does not scale without additional marginal cost – for example, raising money from an investor or recruiting a new person to your team still takes incremental time and effort.

People

If you have people working for you who are able to execute your ideas you can (in theory) make more decisions for greater output versus doing it all yourself. This is not costless leverage as recruiting is expensive, developing trust and high performing relationships is difficult, and alignment between people as you scale is challenging. People can be amazing to bring in new skills, different ideas and make a product or organization better but they are not my favorite source of pure leverage.

Capital

Let’s assume you spend 100 hours developing a well reasoned theory to pick an investment (e.g. buying Amazon stock in 2011). If you have $100 of your own capital to invest and it returns 10x, you make $1,000. If you have $1,000,000 to invest because you raised money from others (let’s assume you get 20% of the upside), you would make $2,000,000 in the same scenario. The amount of time you spent crafting the thesis remains constant but the returns are much larger if you have more capital. This is not costless, because you have to convince other people to part with their capital and trust you with it unless you are already wealthy.

Scaleable Leverage

Scaleable leverage has zero marginal cost of replication, and does not require someone else to agree to it. This is the best kind of leverage as it can create value even without ‘active’ involvement from you. Code and Media are both great forms of leverage but distribution and discovery of your code and media is still a requirement for success.

Software

A line of code can be deployed and distributed at scale with very little marginal additional cost. Servers are constantly available, and users can interact with your technology whether or not you’re actively working on it. Imagine, if like a doctors office, Google Search was only available from 9am-5pm, Monday to Friday.

Media

Books, Blog Posts, Podcasts, Youtube videos are all good ways of getting your ideas across at scale. The cost of creating the content is fixed but the marginal cost of a user downloading another podcast episode or viewing another blog post is essentially zero.


Scaleable leverage is both responsible for a lot of wealth creation for modern content creators and technology company builders, with very little invested capital for the relative impact. I think that this kind of leverage will grow in popularity and impact, whereas many companies of the past were built with Gated Leverage.

I would like to spend more of my career seeking scaleable leverage. Working in technology and investing in startups (for equity) will hopefully allow more passive wealth creation than purely ‘renting’ out my time.