What's on your reading list?

While making small talk while in line for hours before the Theranos trial, I’ll admit I was a bit startled when someone asked me what books I’d read recently that I’d recommend. With my daughter’s first birthday in a few short weeks, all that’s been on my nightstand is a crash course on how to survive forthcoming toddlerhood, not exactly something I’d consider a book club recommendation. And while I do have a PDF of Andrew Chen’s new “Cold Start Problem” saved on my phone, I haven’t had a chance to read it.

That’s what makes asking about book recommendations a fun question. Asking about someone’s reading is revealing, as you learn a little bit about someone and what’s interesting and important to them. Every time I do one of my “Five Questions” interviews that I publish at the end of this newsletter, I ask a similar question to venture capitalists. It’s not about what’s on their nightstand right now, but it is about what book they’d recommend every startup founder should read.

Since there’s no guidebook to running a company, I find the answers from investors illuminating. Some recommend books on the way people think. Other investors choose books that give founders broader context about society or biographies on specific company leaders to learn from the past. I put together a full list of 18 books that investors recommend every startup founder should read, but here’s a few that caught my eye:

• “Why We Sleep” by Matthew Walker. "As a founder, the job is a grind, and there’s an inordinate sense of pressure to always be on. Sleep can easily fall by the wayside. This book reframed how I think about sleep as a productivity booster instead of a time thief." —Jocelyn Kinsey, DFJ Growth
• “Influence: The Psychology of Persuasion” by Robert Cialdini. "It’s basically a handbook to cognitive biases and other human 'flaws' that impact how we make decisions. When I recommend it though, I always feel like it should come with a 'contract' on the cover that states you’ll only use this knowledge for ethical purposes (and if you read the book, you’ll realize why this contract would work!)." —Hunter Walk, Homebrew
• “Attention Factory: The Story of TikTok and China's ByteDance” by Matthew Brennan. "It is the story of TikTok and ByteDance, and is a great lesson in that sometimes you must step outside your lens of the world to see how much bigger you could be thinking." —Lydia Jett, SoftBank

The one thing rarely recommended: fiction. While most recommendations were nonfiction, USV’s Rebecca Kaden thinks founders should try reading a novel instead. “Novels remind us that it's possible to dream up whole worlds, that stories can be transformative and that it always comes down to the characters, or people, involved,” Kaden, a huge fan of Russian literature, said. “Getting out of our own heads and environments and stepping into another, even temporarily, can be so important, especially when you are focused on creating something new and transformative yourself.”

Overheard

This is what passes for smack talk in VC-land, I guess? After Keith Rabois tweeted that he’d done 17 investments in Miami, Sequoia’s Alfred Lin wished him a happy anniversary before adding “This doesn’t have to be your strategy but some of us believe quality >> quantity.” Rabois responded: “Need to fund companies for you to mark up.”

South Park murdered crypto Twitter in one hilarious clip.

How to upgrade your tech stack for 2022: After last week’s look into the tools venture firms are using, I received a few more examples to share, like David Teten’s exhaustive list of how to apply software to 11 steps of investing. Yohei Nakajima uses Airtable for all his LP, portfolio and pipeline tracking but automated a lot of it. Another tool some investors mentioned was startup database Harmonic, which can feed directly into Slack.

“At the time, Theranos was an embarrassment for the entire comms world because it highlighted the worst possible stereotype — the evil PR spin doctor with no moral compass,” Atomic’s Hadley Wilkins told me. The startup comms and PR world has changed since.

Fire dancers, champagne and a guy Trump pardoned: I guess crazy startup parties are back in full swing, omicron and all.

A MESSAGE FROM LEXMARK

Lexmark, a leading provider of printers and imaging equipment — one of the first IoT devices — understands the potential as well as the challenges better than most. We sat down with Lexmark CEO Allen Waugerman to discuss this major development, which he calls one of the most significant milestones in the company’s 30-year history.

Learn more

Inside track

Capital is king, right? Founder Collective’s Micah Rosenbloom and Joseph Flahertycrunched the numbers on 166 IPOs and found that capital “has historically been vastly overrated as a predictor of startup success.”

Founders today are often “playing startup” rather than building the company, says Brooklyn Bridge Ventures' Charlie O’Donnell. Here’s how founders can tell the difference.

Keep your friends close, but your enemies (or, just the CEOs of your competitors) closer, argues DoorDash’s Gokul Rajaram.

Klout used to be a hot startup — until it wasn’t. Former CEO Joe Fernandez has a great retrospective on “how to go from being a super hot company to lucky to get acquired in less than 24 months.”

Fintech is a breakout investment sector but its 2021 IPO performance hasn’t been as stellar. Redpoint’s Emily Manbreaks down this year’s fintech IPO performance and shows that “few, if any, are commanding the types of valuations we see in the private markets.”

Need to know

RIP Ryan Popple. It’s sad to lead off this section with another death of a veteran and venture capitalist. G2 Venture Partners’ Ryan Popple, the former CEO of Proterra, died this week at 44.

The ultimate meme stock. Reddit announced it had confidentially filed its S-1 this week.

Katie Haun is starting her own fund. In a rare case of someone leaving rather than joining a16z, the crypto fund co-founder is departing with a small team of folks to start her own Web3 and crypto-focused fund. Marc Andreessen, Ben Horowitz and crypto fund co-founder Chris Dixon are anchor LPs.

China crackdown: The Biden administration blacklisted 40 companies including drone maker DJI as it grows more worried about U.S. investment in Chinese tech companies that could support military operations.

Fund alerts: Norwest raised a $3 billion fund. Initialized raised $700 million across two funds. Chapter One turned the page and launched a $50 million Web3-focused fund.

This week in Theranos: It’s now the jury’s turn! This week, closing arguments wrapped with prosecution calling Holmes’ alleged choice to defraud investors “not only callous, but also criminal.”

On Protocol: Tech bootcamp students are suing over income-share agreements.

Also on Protocol: Webcams are bad. They’re also crucially important to the future of work. So what does it take to make them better? Opal thinks it has the answer.

Your weekend reading: Another “bait and switch”? Forbes reported that SoftBank-backed Cerebral hired salaried therapists, only to switch them all to contractors, take away their health benefits and start paying on a per-patient-session basis.

Five questions with … Felicis' Aydin Senkut

Aydin Senkut is the founder and managing partner of Felicis Ventures where he’s backed companies like Adyen, Credit Karma, Opendoor and Shopify. Before Felicis, he worked at Google and was the product manager who oversaw the launch of Google’s first 10 international sites.

What was your first job, and what’s a skill you still use from it?

My first job was as an intern at Citibank. I was given a task that sounded not exciting at all so I realized I had to find something quickly that gave me an edge. I realized that the GM of the branch/division really needed someone with great computer and software skills (which at the time was me) so I volunteered and had a great summer. What I learned from that is never let other people put you in a box, think out of the box and transcend “perceived” boundaries — always.

What problem do you want to see a startup solve?

Instrumenting mental health. We are all in the middle of the biggest mental health crisis (the biggest meta challenge we are facing) but we still have no way to meaningfully measure, understand and remedy mental health issues which plague most, if not all, of humanity.

Aliens visit Earth and you can only show them one movie. What would it be?

“Inside Out,” the Pixar/Disney movie. We human beings are so complex — that one film captures the emotions and irrational side of human beings so well. It would help the aliens to better understand humanity.

What’s a company in your anti-portfolio and what did you learn from passing on the deal?

Airbnb — biggest missed/passed opportunity of my career. I way overestimated the risk and underestimated the network effects of that great idea. It was a painful realization that great venture investing is all about positive outliers. Because of how our brain is wired, we often overestimate the risks and underestimate the potential compounding/network effects of a great idea (as crazy as it may sound at the time).

What’s one of your New Year’s resolutions for 2022?

To say “thank you” and express gratitude and appreciation a lot more often.