Everything you thought you knew about investing in startups is wrong

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“Founders first” Date codified: 2005

Primary evangelist: Sean Parker Thesis: Young founder-CEOs should not be replaced by professional managers or lose board control, because they’re uniquely suited to run companies in the internet and mobile era.
Inherent flaw: This setup overcorrects the previous norm of replacing founders after raising a series A funding round.
Subsequent “innovations” gave founders super-voting control as a matter of course and let them sell shares during funding rounds with no effect on their power.
“Software is eating the world” Date codified: 2011 Primary evangelist: Marc Andreessen
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Thesis: Businesses and industries are increasingly being run on software delivered via the internet.
Inherent flaw: Markets such as real estate have different economics than, say, media and communications; having an app does not mean that you can produce high margins like a software company or deserve a tech-company valuation.
“Startup = growth” Date codified: 2012 Primary evangelist: Paul Graham Thesis: “A startup is a company designed to grow fast.
. The only essential thing is growth.”
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Inherent flaw: Public-market investors ultimately care about profits, too, and every sacrifice made for growth at the expense of profitability—from taking on debt to entering new markets for the sake of a story for private investors—creates a lack of discipline within a company.
“Monopoly is the condition of every successful business” Date codified: 2014 Primary evangelist: Peter Thiel Thesis: Founders need to seek out markets they can monopolize, because it’s harder to capture value created in competitive industries.
Ultimately, companies with no competition are more competitive.
Inherent flaw: This monopoly-seeking ethos has been misapplied to global sectors impossible to dominate, from transportation to food to real estate.
It’s also anti-democratic and increasingly the focus of regulators

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