Creative thinking is an edge
The ability to think a bit differently is quite underrated
Historically I’ve lamented the quite linear thinking prevalent in founders who have started companies over the last decade or so. To some degree I think this a result of the institutionalising effect that the PMF mantra created during the pre-2020 SaaS era. But I also think it comes from having more technical founders who are highly focused on problem-solution relationships. To be clear, very large amounts of money have accrued to this relationship so I am not here to say mean things about it. But it still surprises me when I talk about M&A ideas to company founders and they react like I’ve just revealed a new dimension of existence.
For reasons of familiarity bias (I’ve personally built things there) and access (the main characters tend to operate quite publicly), I’ve always ended up reading a lot of media business history. And so a fairly recurring thought that pops into my brain is what would Steve Ross or John Malone be doing today if they started their business-building journey as AI natives?
A lot of Silicon Valley turns their noses up at the media sector because, as one investor memorably told me (referring to advertising but the point stands) ‘it’s just basic pricing arbitrage wrapped up in a dashboard, delivered by some humans, expensed by some lunch and then ultimately exited to whoever happens to be running Viacom at that point in time’. And yes, that is basically the business model. But the sector has been home to some of the most creative empire builders we’ve seen in the last few decades. Steve Ross built Warner Bros from funeral homes. Summer Redstone built Viacom from some drive-in movie theatres. Warren Buffett even took a close look at WPP once (allegedly, I don’t think he ever publicly confirmed it) which is a fascinating counter-factual.
One of the things I am enjoying immensely about the AI supercycle is just how like the media space it’s starting to become. I mean Sam Altman’s daisy-chaining of circular financing deals, Elon’s inevitable march towards some kind of AI/battery/solar/car/X/space conglomerate, Jensen’s growing realisation that capital scale is a strategy all seem to be making up for a couple of decades of more conventional business building. Now there are, quite reasonably, some questions about just how durable these strategies are. But as someone who has a niggling concern about the increased outsourcing of our reasoning to consumer LLMs, it’s quite nice to see this level of creative thinking.
Btw if you haven’t read about John Malone, Sumner Redstone or Steve Ross, I recommend Cable Cowboy, The King of Content and Master of the Game respectively. Media history is an excellent way of hammering home the importance of distribution.
Reading
I’ll publish my 2025 reading list in the next day or so but one last entry to sneak in. A few months back I recommended reading Apple in China and Breakneck as a pairing. Having just finished Adam Tooze’s Wages of Destruction (originally suggested by Joe Weisenthal), I would include this as added reading if you want to move from understanding the logistics of building products to culture to entire economies. I sit in a couple of investor group chats which currently have a deglobalisation theme floating around. It made me think about what deglobalisation truly means at a practical level and how so much, maybe all, of what we talk about today as deglobalisation, even tariffs, is really just at surface level.
On a more realpolitik level, it made me think about the industrial capabilities needed to wage a meaningful war. In WW2, it was really just the US and Russia which had the capability of doing this. I can’t speak very credibly on this but it feels like the 2025 version of that landscape is probably just China? It makes me extremely curious to understand how the Russian economy is actually being run at this point (suggestions welcome). It also makes me think about defense investing and the challenges it presents to governments (once you stop spending, you’re immediately creating an unemployment problem) and investors (timing cyclicality for entry and exit).