Angel investors are taking the role of public philosophers, dispensing truth and wisdom to all that will listen. Listen to Naval Ravikant and Paul Graham and you’ll definitely walk away edified with their earnest, yet grounded insights on life and business.
If you’re more interested in predictions on where we’re headed as a society based on historical trends, then there’s an angel investor you should know about – Balaji Srinivasan.
He recently wrote an article titled ‘Founding vs Inheriting’. It’s a bold article where he states there are two types of institutions in the world. There are institutions where the founder is still alive, and institutions which have been inherited and the founders are long gone.
His argument is that Founded > Inherited because inherited institutions fail in meeting the challenges of today, while founded institutions were expressly built to meet those challenges that institutions are failing at, and the world needs more founders.
He characterises inherited institutions as having a ‘read only’ culture where they can only repeat what ancestors have handed down but not be able to recreate it from scratch.
For example – the head of the Federal Reserve only manages what was initiated decades ago, while new currencies like Bitcoin and Ethereum were created in the present to meet the challenges that the modern monetary system is facing.
However I think Balaji oversimplified reality. The reality is that some inherited institutions change, adapt and evolve by taking on the properties of founder companies. The New York Times is a great example of this.
Like all print publications, the internet was giving them a really hard time. From the year 2000 onwards, daily circulation was on the continual decline and ad revenues were being increasingly taken by Google and Facebook.
Many thought they’d go out of business and be eclipsed by digital natives like BuzzFeed and the Huffington Post. However, by 2020 they turned things around. Now they have 4X the subscribers they used to have in their print era peak. That’s 6.5M subscribers and 5.7M of them are digital only.
That’s just one example. With more and more inherited organisations acting like founding companies I think the future is looking pretty bright. The world needs more resilient organisations that adapt and address the problems of today and I think we’re going to see more of that in the future.