A few days ago, I posted about the Los Angeles Lakers being sold for $10 billion (see here). The team was bought in 1965 for $5.175 million by Jack Kent Cooke (see here). What a crazy increase in value: $5.175 million to $10 billion over 60 years. Looking at the average rate of growth in team value per year, or compound annual growth rate (CAGR), it’s roughly 13.5%—over 60 years.

I wanted to see how this compares to the returns of great investors. The easiest comparative is Warren Buffett, since he began investing professionally in the 1950s and just retired. According to CNBC, Buffett took over Berkshire in 1965, and from then through the end of 2024, Berkshire shares rose 5,502,284%. CNBC says that equates that to a CAGR of 19.9%. See the details here.

So, owning the Lakers turned $5.175 million into $10 billion, and that was amazing, but investing with Buffett in Berkshire would have far outpaced that, assuming you invested $5.175 million and held the entire time.

Using a reverse CAGR calculator (see here), if you invested $5.175 million in 1965 and got Buffett’s 19.9% CAGR, you’d have $277.3 billion by the end of 2024.

Ten billion dollars and $277.3 billion. That’s the difference between compounding at 13.5% and compounding at 19.9% over 60 years. That 6.4 percentage-point difference is a $267.3 billion difference!

I recently listened to an interview clip with Sam Altman, co-founder of OpenAI and ChatGPT, in which he talks about his ideas on thinking more clearly. Given the success he’s had as a start-up founder, president and partner at Y Combinator, VC investor, and CEO of OpenAI, I was curious to hear his opinions. Here are a few takeaways:

• Altman, a big fan of spiral notebooks, takes tons of notes. He’s particular about the type of notebook he uses. The notebook is a way for him to capture things, and ripping pages out allows him to easily compare and think about what he’s captured. He creates piles of crumpled notebook pages as part of his process and goes through a notebook every two to three weeks.
• Writing is important to Altman because it’s a tool that helps him think more clearly. It’s important for people to learn to write so they can learn to think more clearly.
• Altman is better at generating ideas when he’s sitting alone and writing than when he’s conversing with others.
• Anytime he gets 11 minutes or more free, often in the back of a car, he writes and thinks.
• Figuring out the balance between being with people, getting ideas, and having time alone to think and write is important. His thoughts on this reminded me of the framework I read about in A Technique for Producing Ideas.
• His weekends, with long, quiet blocks of time to think and write, are important to him.

Altman’s process is surprisingly simple and low tech: a good pen (he recommends his favorites), a spiral notebook, and time to think and write.

Given OpenAI’s dominance in the AI market, it stood out to me that he believes writing is still critical as a thinking tool and he writes regularly using pen and paper, not ChatGPT.

The interview clip with Altman is short. If you’re interested in listening to or watching it, go here.

This week, it was announced that the Buss family is selling a majority ownership in the Los Angeles Lakers at a $10 billion valuation. That’s a huge sum for a sports franchise and reportedly the richest deal for a sports team in history (see here).

When I read the headline, I immediately thought about Jack Kent Cooke and Adrian Havill’s biography of him, The Last Mogul. Cooke built a fortune in newspapers and radio in Canada working alongside Roy Thomson (think Thomson Reuters), whose family is now the wealthiest family in Canada. Cooke then moved to L.A. and purchased the Lakers in 1965. He paid what was then a record price of $5.17 million. In 1966, he spent $17 million building the famous Forum in L.A. so the Lakers and the Kings, the NHL hockey team he also owned, could play in the same arena.

Jack signed Wilt Chamberlain to the Lakers. He traded for Kareem Abdul Jabbar. And he drafted Earvin “Magic” Johnson in 1979. The Lakers won a championship under Jack and were on their way to dominating the 1980s.

But Jack ended up getting divorced and, as a result, selling the Forum, the Kings, the Lakers, and his ranch to Jerry Buss in June 1979 for $67 million. Forty-six years later, the Buss family is selling the Lakers for $10 billion.

It’s wild to think about how the valuation of the Lakers has skyrocketed. In 60 years, the team has gone from being worth a little over $5 million to being worth $10 billion. That’s a roughly 13.5% compound annual growth rate—a striking example of the power of compounding (another example here).

If you’re interested in reading more about Jack, Havill’s biography is great. I also posted a series of posts about what I learned from the book. The Lakers deals are specifically covered here and here.

In 2024, I challenged myself to accelerate my learning by reading a book (usually a biography) a week. To date, I’ve done it for 67 consecutive weeks. I wanted to share what I was reading and also keep track for myself, which was difficult (see here), so I created a Library section on this site. I added to it all the books I’ve read since my book-a-week habit began, and I’ve committed to adding my latest read to the Library every Sunday (see the latest here).

That left the books I’d read before 2024 unshared and untracked. I set a goal to add my old reading to the Library over time. It began with a Memorial Day Challenge to add five books (see here) and continued with my challenging myself to add two books every weekend until my backlog is gone. This past weekend was my third weekend, and I added two more books:

• Common Stocks and Uncommon Profits and Other Writings by Philip A. Fisher
• Capital Returns by Edward Chancellor

That’s the latest update on my weekend goal. I hope that sharing these books will add value to others.

I’m a first-generation entrepreneur committed to learning as much about entrepreneurship as I can. The best way I’ve found to do this is to study other entrepreneurs. So, every week, I read a book about an entrepreneur, usually a biography. Then, every Sunday, I post my latest read in my Library on this site.

A few months ago, I read a biography about Albert Lasker, the entrepreneur who pioneered advertising techniques that helped usher in the era of American consumerism. I learned he teamed up with Adolph Ochs to help free a man charged with murder in Atlanta in 1913. They felt he was being wrongly accused because he was Jewish. Researching Ochs, I learned he acquired a failing New York Times (NYT) and turned the newspaper into an internationally respected paper.

I read a biography about Ochs, An Honorable Titan, in March, and I recently read a second biography about him, Printer's Devil to Publisher. The second one was written by Doris Faber, who worked at the NYT, albeit after Ochs had passed. It contains more of the details I craved—specifically, the early years of his life as an information entrepreneur selling directories of all the businesses in Chattanooga and the specifics of how he acquired his first newspaper, the Chattanooga Times, when he was broke and 20 years old. This book also details how speculating on land during a financial bubble ruined Ochs financially and led him to take the biggest gamble of his life: moving to New York City and buying majority ownership of the failing NYT with no money down.

This book isn't too long, but well researched. It gives readers a glimpse of the newspaper world of the early 1900s and explains how a high school dropout acquired one of the most prestigious media properties of that era and influenced the world.

If you’re interested in learning more about Ochs or the early days of the NYT, consider reading Printer’s Devil to Publisher.

Current Project: Reading books about entrepreneurs and sharing what I learned from them

Mission: Create a library of wisdom from notable entrepreneurs that current entrepreneurs can leverage to increase their chances of success

Cumulative metrics (since 4/1/24):

• Total books read: 67
• Total blog posts published: 434

This week’s metrics:

• Books read: 1
• Blog posts published: 7

What I completed this week (link to last week’s commitments):

• Read Printer’s Devil to Publisher, a biography of entrepreneur and publisher Adolph Ochs, who bought and rehabilitated The New York Times and turned it into an international newspaper
• Added two more books that I read in 2023 to the library on this site—see more here

What I’ll do next week:

• Read a biography, autobiography, or framework book
• Add two more books I read in 2023 to the library on this site—see more here
• Create a digest of one biography, autobiography, or framework book

Asks:

• If you know any senior full-stack developers interested in working on the software for my current project, please introduce us!

Week two hundred seventy-two was another week of learning. Looking forward to next week!

Current Project: Reading books about entrepreneurs and sharing what I learned from them

Mission: Create a library of wisdom from notable entrepreneurs that current entrepreneurs can leverage to increase their chances of success

What I struggled with:

• No material struggles last week

What I learned:

• Awareness is a challenge for entrepreneurs. It’s not easy for them to know what books about entrepreneurs exist and whether any particular book contains experiences relevant to them. People default to reading the most popular book that other entrepreneurs suggest, even though it might not be the one they need to solve the problem they’re dealing with at the time. Making it easy for entrepreneurs to know what experiences of other entrepreneurs have been written about—and where—adds tremendous value.

That’s what I learned and struggled with last week.

Yesterday, I shared the best strategy I’ve learned to build an audience (see here). It’s timeless and builds credibility. It’s the strategy Warren Buffett and Paul Graham use. The strategy is this: share what you learn with others. Said differently, if you learn or figure something out, don’t hoard that wisdom. Share it with the world.

The strategy is simple enough, but it’s not easy. Lots of people share what they learn, but most of them haven’t accrued the credibility that Buffett and Graham have. What gives?

Executing this audience-building strategy and achieving the outsize results that Buffett and Graham are underlain by some critical fundamentals. Many people skimp on them, and their efforts don’t pay off as well as they could. Here are some that I’ve noticed Buffett, Graham, and others have embraced that made all the difference:

• Prioritize learning – This is the key element that most miss. Heck, I missed it when I first started this blog. Everyone has a reservoir of wisdom they’ve accumulated from living and working that they can share. You can start by sharing your reservoir, but it will drain if you’re not refilling it by learning faster than you’re sharing. When it’s empty, you no longer have anything of value to share with your audience, you lose their attention, and your audience shrinks. To keep adding value to your audience by sharing what you learn, you must learn at an accelerated pace. This means you can’t be haphazard about learning; you have to make it a priority. You must seek out resources around topics you’re interested in and consume them regularly. It’s no coincidence that people who’ve built audiences by sharing what they learn are also avid daily readers. Buffet reads 500 pages a day (see here).
• Writing – You don’t have to think clearly to speak “well,” but you do have to think clearly to write “well.” Writing down what you’ve learned forces you to think clearly and understand a topic deeply. It also forces you to figure out the best way to communicate it to others. Once you’ve written it down in a way that others can understand, you’ve cemented your understanding of the topic in your brain and made it easier for you to speak “well” about the topic with extreme confidence. Someone who speaks well will be liked, but someone who writes well (and by extension speaks well) is always held in much higher regard.
• Consistency – The point of building an audience is to get people’s attention. Once you get their attention, your job isn’t done. You must keep their attention going forward. The best way to keep their attention is to have them coming back for more. If they know you’ll share thoughts on a regular schedule, you’re more likely to keep their attention. The best audience builders who share their learnings pick a schedule and stick to it. Warrant Buffett only releases an annual letter, but people know when to expect it, and they eagerly anticipate it. He keeps their attention and maintains their interest by consistently dropping that letter once a year in the same month. Pick a frequency, communicate it, and stick to it to keep your audience’s attention.
• Perseverance – Building an audience around sharing in writing what you learn isn’t a sprint. It’s a marathon. It takes time for people to find what you’ve shared. So, don’t expect results or praise to come quickly. Howard Marks is a billionaire distressed-debt investor who is the founder of Oaktree Capital. He writes two or so long-form “memos” every year that explain investing concepts and current market conditions. He started writing these memos and sending them to his clients in 1990. He wrote them into a void for a decade. A decade! It wasn’t until 2000 that anyone acknowledged receiving or reading his memos. His 2000 memo went the equivalent of viral in the investing world. See more here and here. Now, his memos are eagerly anticipated, widely read, and praised by the smartest minds in the world. I read or listen to each memo the week it drops.

To sum up, building an audience by sharing what you’re learning is simple but not easy. To execute the strategy effectively and achieve outsize results, you must accelerate your learning (about things you’re interested in), write down what you’ve learned, be consistent with your sharing, and commit to sharing for a long period, regardless of feedback.

If you embrace these fundamentals, sharing what you learn can help build an audience in a timeless manner that enhances your credibility in the minds of your audience and engenders immense loyalty.

If you don’t believe me, look at the sharing journeys of Warren Buffett, Howard Marks, Paul Graham, and others.

I’ve noticed more people building audiences (think followers on X, LinkedIn, Reddit, etc.) and then creating solutions to problems they learn about from audience feedback. When the solution is built, they then have ready-made distribution. They point their audience to the solution they built. It’s a reverse-marketing approach (build an audience, then a product) that I’ve seen be highly effective for some people, so I studied it.

I’ve learned about lots of ways to go about building these audiences. Some are timeless; others, a flash in the pan. Some are questionable and erode trust; others build credibility and trust. The ones that interest me are timeless and build credibility. They’ve worked historically and will continue to work in the future. You build long-term trust with the audience by adding value to them.

So, what’s the best strategy I’ve found that meets these criteria? It’s simple, actually: Share what you learn. I’ve noticed that people who take the time to share their wisdom build loyal audiences who respect them highly. No selling or upsells. Just free game anyone can consume. This strategy is tried and true. So, who are some people who’ve used this strategy to build audiences?

• Paul Graham – The founder of Y Combinator is also a prolific blogger. Graham has an essay section on his blog that people rave about. These essays are long-form distillations of Graham’s understanding of topics. They are often quoted widely by founders and investors. Some were written many years ago, but the wisdom in them is timeless and still shared and written about. Like this one from 2004 about making wealth or this one from 2006 about doing what you love. Timeless wisdom led to timeless content that attracted a huge international audience on the internet.  
• Warren Buffett – The Oracle of Omaha is often regarded as one of the best investors ever, but if you think about it, he’s really operating a mix of a hedge fund and a private equity (PE) firm in a single firm. Lots of people have generated amazing returns by founding hedge funds and PE firms. But most people don’t think as highly of them as they do of Buffet. Why is Buffett different? Buffett isn’t just an investor; he’s also a teacher. He puts a tremendous amount of time and energy into sharing what he’s learned with others. For decades, he’s written an annual letter (spending months to do it) that he distributes widely (see letters back to 1977 here). Also for decades, he’s held an annual meeting at which people can ask him anything. He’s written countless articles in various publications sharing his thoughts, investing principles, and (in his early days) stock picks. He’s given so many CNBC interviews that CNBC created an archive and dedicated a portion of its website to it (see here). By sharing what he knows, he’s built a loyal base of disciples (an audience) who hold him in high regard. Many people followed his value-investing principles (which he borrowed from people like Ben Graham and Philip Fisher) and became rich, thus cementing his credibility.

These are just two examples; many others have had outsize success with this approach.

This sounds like a simple strategy, and it is. But after digging more, I’ve learned that although it’s simple, it’s not easy. There’s a critical component of the strategy that’s necessary to make it work, and it, too, is simple but far from easy to execute.

This post is already pretty long, so I’ll share that critical part in tomorrow’s post.

Last month I shared my love for the micro SMB market and my observation that many start-ups overlook it (see here). This week, I listened to a founder who’s targeting this market give an update on his progress. The TL;DR is that it’s starting to work. He’s beginning to land paying customers and see his monthly recurring revenue increase month over month. But it’s tough and taking longer than he expected.

A few of my takeaways from this founder’s experience so far:

• Go-to-market (GTM) – Finding and converting micro SMBs into paying customers is difficult. They’re scattered all over the place and busy operating. You likely can’t find them on tried-and-true places like LinkedIn. Instead, you have to think of them as consumers and market to them that way (I think of them as prosumers). Finding them in the places they’re already hanging out (e.g., Facebook groups or Reddit forums) is a good first step. Figuring out how to add value where they are builds trust and increases the chances that you’ll get them into your sales funnel.
• Wannabes – Targeting aspirational micro SMB entrepreneurs isn’t a great strategy. Even if your GTM is good and you find them, they still may not buy what you’re selling because the problem you’re solving isn’t real to them (yet). Target micro SMBs who are already generating revenue and trying to grow. They’ll instantly understand the value of the solution you’re providing. They’ve tasted some success, and they’re hungry for more. Position yourself as the person trying to help them build their empire.
• Start narrow – Building on the GTM point above, starting with a narrowly defined problem and a narrow persona for an ideal target micro SMB is likely a good approach. It’s much easier to measure the effectiveness of your marketing efforts and iterate on them when you’re focused narrowly. Going wide is akin to trying to boil the ocean (and the micro SMB market is HUGE).
• Moat – Because finding micro SMBs is challenging, many players tend to avoid this market and go after SMBs (mid-market businesses) or enterprises instead. Therefore, if you can figure it out, you’ll have a big competitive advantage. You’re less likely to have competitors because what you’ve done seems impossible to others. Less competition means you can capture a larger share of the market before having to worry about competitive pressures that erode margins.
• Partnerships – If your GTM is working well, other companies will likely want to partner with you or pay you to tap into your micro SMB customer base because they can’t figure out how to replicate what you’ve done. This creates all kinds of opportunities and leverage in relationship conversations. If done strategically, it could get your cost to acquire a customer to zero or even turn into a profit center.
• Runway – Finding your strategy to locate and acquire micro SMBs isn’t like executing a proven playbook, such as enterprise SaaS sales. It’s about creating something from scratch that may not have been done before. Lots of testing and iteration are required. Because there isn’t a predictable formula or strategy, you have no idea how long it will take. Maximizing your runway is critical so you’ll have enough time to experiment and, quite frankly, catch a lucky break.
• Small tickets – Selling to micro SMBs means the average amount you get from a customer is likely to be low. So, you need lots of customers to build a meaningful amount of revenue. That takes time, so you need to give yourself plenty of it. But once it starts rolling at a steady pace, it can snowball quickly.
• Payments – Offering a product that makes it easier for micro SMBs to accept payments from their customers puts you in the revenue path. Once they rely on your product or service to generate their revenue, they’re less likely to leave.
• Workflows – Micro SMBs usually have zero processes and are often one- or two-person companies. If your product offers processes where none exist or automates tedious manual processes, that’s huge to these micro companies because you can help them generate more revenue without needing to add headcount.

I’m excited for this entrepreneur. I think he’s on to something big. If he can crack the GTM for micro SMBs, I think he’ll build a shockingly big business fast.