The True Genius of Tech Leaders – Capital, Not Vision

Discovering the best ideas / innovations / people to put money behind is very, very hard. Very few institutions have been able to do it repeatedly across market cycles. Having 2 fund-returning investment in a single vintage VC fund is strong signal of a manager's selection capability. Less than 20 funds have ever done it multiple times. There is also innovation in allocation. Look up Redesign Health or Juxtapose.

And knowing what to do with an acquisition is very difficult. Google re-built Youtube from scratch because every aspect of it couldn't scale. That deserves credit. Elon turned a small team with no technology but a huge vision into a giant once he bought his way in. He convinced the world to put money behind the people behind him. Trivializing that achievement because he is only a genius allocator and not a genius scientist is petty.

How have I lived on the Internet for so long without hearing Penelope Scott?

Yawn. But omg Penelope Scott! Skip the article listen to the song...

https://youtu.be/LpxT9TLGoLI

Cory seems to be unwilling to consider a third explanation. Both money and vision are useful. To say it’s mostly money means that most venture capital would be deployed successfully. It is not. You need some combination of smart people, money, timing, vision, and luck.

Criticizing investors because they toyed with what to us are vast sums of money is perhaps disingenuous. I’m sure he talks to his friends the same way about a $100 dinner check, but there are plenty of poor people who would regard that as unimaginably decadent and corrupt. Sorry, but a quarter billion dollars isn’t that much to those investors, and they know Elon Musk well. They understand intuitively that he’s a good person to risk the money on.