Follow the money

The money trail never lies

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Good morning Launch Key 🚀 community!

The old saying, ‘If you have the facts, pound the facts. If you don’t have the facts, pound the table’ is currently on full display.

It’s always about the money. And when the spigot gets turned off in Washington, people pound the table.

It’s the inverse with business investment. Understanding what types of companies are being invested in, gives us some pretty good ideas about the future.

Let's get into it.

Comment below and let me know if we’re on the right track.

Table of Contents

Pull to Eject

Peers and Launch Key subscribers ask how I keep up with new software and startup ideas. It’s a fair question since Moore’s Law seems to have affected software. Marc Andreessen explained it in his infamous Why Software is Eating the World post more than a decade ago.

I leverage experience, keep up with online thought leaders, read shared articles from friends and spend a lot of time listening to the next generation in the form of my 3 sons.

They’ve got independent ideas about business and their careers. They’re doing cool things. Many of their peers are too. They’re not afraid to make a reach. They’ve got exposure to new ideas that were not available to my generation.

One of my sons has his own daily newsletter where he covers all things Venture Capital. He recently dissected the state of the VC industry with a 2024 wrap up issue.

So where is new money going?

Almost 30 years ago, Plug and Play founder Saeed Amidi bought ‘the lucky building’ in Palo Alto and hosted companies that needed startup space. His vision turned into one of the foundational Silicon Valley hubs that has spawned companies like Google, PayPal, Dropbox and Lending Club.

They make more than 200 investments a year in early stage startups. Smart money follows where they are investing.

If that doesn’t show you enough direction, there’s none better than Y Combinator for a possible glimpse at future unicorns.

Since 2005, they’ve invested in more than 5000 companies with a total valuation over $600 billion. Their investment list includes heavy hitters like AirBnB, Brex, Instacart, Coinbase, Reddit and thousands more.

They have an open invite for startups looking for funding and mentorship.

The transparency of venture hubs, founders, investors, corporations and growth companies is the exact opposite of what we get in government.

And the majority of voters are finally asking questions.

Lack of transparency

For far too long government has not had the same accountability that the private sector demands. Rules for thee but not for me.

You can learn what D.O.G.E. is uncovering by today’s headlines. President Trump simply renamed the United States Digital Service started by President Obama in 2014. Good luck trying to keep up.

Thankfully some of the best software practices – especially crowdsourcing – have opened up the Pandora’s Box to just where our tax dollars are going and people are waking up to the grift.

And it’s obscene.

It’s not just the top tech titans building data sets. Thousands of citizen coders are culling available data and publishing it for comment.

In 2022 as Twitter opened up (and later turned to X) I followed someone who just shared government grants that had been awarded. And while it’s hard to get a government grant, it is relatively easy to screen scrape where they are given. RandoLand shares where the grants go.

I also follow quantitative brains like Ed Dowd and Zero Hedge for revised government stats and economic data. And recently I added insight from someone who goes by the moniker DataRepubican (small r). She has been fantastic in sharing publicly available data about how NGO’s and Universities have used tax payer dollars. She’s cross-referenced EIN numbers for companies and addresses. People in her comments add more links and even deeper understanding.

Free resources following the money is eye opening. But it’s waking up a lot more tax payers. Libertarians, Democrats, Republicans, Green Party and unaffiliated voters are all seeing the breadth of waste.

Spoiler alert: it’s not flattering.

If you’ve ever owned a small business, political money management is like a foreign language. If you want to start one, you will not be able to survive like that.

Take your cues from the investment incubators in the first half of this article:

  • Really know your customer

  • Share your problems with peers

  • Test your hypothesis on small groups

  • Listen to mentors

  • Pivot if you need to

  • Stay lean as long as possible

  • Survive and advance

And don’t outspend your income.

Now go launch something 🚀 

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Old School Wisdom

Anyone in business in the 1990s will remember the spectacular success Kenan Sahin had in taking just $1,000 from his savings and using it to build the first great commercial AI success, leading to a $1.54 billion sale to Lucent Technologies.

In Lean Startup, Lean Company, Rich Exit: The Guidebook, Kenan Sahin follows up on his 2024 account as the sole shareholder in this rich exit, detailing his extraordinary entrepreneurial accomplishment and putting it into a practical workbook any aspiring leader can follow.

Free Knowledge

Do you have access to large data sets and don’t know how to make sense of it all? The R Project might be exactly what you need.

R is a language and environment for statistical computing and graphics. It is available as Free Software under the terms of the Free Software Foundation’s GNU General Public License in source code form. It compiles and runs on a wide variety of UNIX platforms and similar systems (including FreeBSD and Linux), Windows and MacOS.

Roll up your sleeves and try it out.

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Visual Crapshoot

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Launch Key readers – thank you for your support and feedback. I appreciate each and every one of you as I work to build something you value.

Remember, if there's anything you'd like to share — a recommendation, a story idea, or just a note to say hi, hit the reply button and fire away.

~ Rob

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