David Rosenthal: evaluation

Transcript context

…Right. So if that's the case, then there's the second order question, which is, why is that happening and will it continue? But that's more of an edge case, so I agree with the basic idea that that's kind of a watch out. I'll go one step further. An even more interesting investment opportunity—they don't come along very often—is one where it's almost a category of one, where a competitor, somehow, there's something about the way they are that there's nobody really quite like them. That's reassuring in a lot of ways if it's working, if it's scheduled positive. This is the perfect transition to my favorite part of your book. In cases like that, often a power is a cornered resource. As you say, I think this is actually quite rare in tech, yet, I think people in tech think it's not rare. Classic examples of patent. You're in biotech, you have a patent, you have a cornered resource, you have it, nobody else can have it. I'm curious about your thoughts on cornered resources in general, but in particular, something that just really spun around in my mind reading this is, lots of people in tech, especially lots of VCs think that executive talent and founders are a cornered resource. You make the point in the book that executives are not cornered resources, because their value can be arbitrage by the market. I think that actually, the value of founders gets arbitrage, too, in Silicon Valley. Because if you have a superstar founder, they're going to raise money at such a high price. Just a comment on leadership. Leadership is unbelievably important. It's unbelievably important in strategy because as I said in the book, all strategy starts with invention and building up something around that. There really is a difference between companies with truly great leaders and ones that aren't as great. So it matters, but the question you're dealing with is sufficiency. Is it enough? The example I start my book with is a perfect example for this, this little old for you guys, but it's Intel. They had two businesses, they started as the memory company. They started with the best of the best.…

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