The new Venture Capital book “The Power Law” is an excellent summary of the companies and people that made Silicon Valley and VC what it is today. The firm Sequoia comes out as most impressive in the book, particularly the new partners Roelof Boetha and Jim Goetz. I particularly liked the idea of “prepared mind”, which was actually taken from Accel partners and before that was developed by Louis Pasteur, who famously said “ “chance only favours the prepared mind”.
Prepared mind essentially means doing the work upfront so you understand as much as you can about the landscape before investing in a company. It not only allows them to make a good decision on whether a company will succeed, but it helps identify companies that are off the radar. The quote that stands out comes from Accel.
“… at the early stage, you’re purely betting on teams. [That means] entrepreneurs that completely understood the category they were working in, [with] an authentic understanding of the problems.”
Here is an example of some prepared mind analysis on the Insurance Industry also done by Accel.
I love the concept and am working on applying it to social audio.