Kingmaking and the limits of external conviction
Big swings, fast swings, or "make kings"
Call your customer, call your shot, or call capital
This from Aashay is totally spot-on and the generational divide he’s describing is real. It roughly maps onto a framework he and I have been talking about for a while.
Historically, there are two schools of thought: calling your customer vs. calling your shot. The former (PG) is talking to users, iterating fast and letting the market teach you. The latter (Thiel) is developing deep conviction, having a secret and making a big bet towards a future that you own.
Roughly speaking, calling your shot and calling your customer are two paths to the same destination: internal conviction.
Aashay is describing the new phenomenon of “king making” or engineered success via the right cap table/club deal/a priori social proof. The setup at inception is everything.
So now we have three approaches: “big swings” (call your shot), “fast swings” (call your customer), and “make kings” (call capital).
The problem with “make kings” isn’t that it doesn’t work. It can work. The problem is what it costs you.
Consensus isn’t necessarily predictive of outlier outcomes in a power-law denominated distribution. The “obviously best” companies today often have no bearing on what actually works in the future. At the limit, OpenAI started as a nonprofit and is today the most valuable startup in history. Kingmaking selects for companies that look like winners based on pattern-matching. But in a power law distribution, winners/outliers are definitionally an anti-pattern.
Borrowed conviction is structurally fragile. Without an internally derived animating spirit/vision, you lack the internal scaffolding to sustain (through hard moments/local troughs). Much like companies who crib from competitors, they lack the insight and conviction to know why they’re doing what they’re doing or what to do next.
Borrowed conviction comes packaged with borrowed structure: raise big, hire fast, beat plan. That locks you in and creates path dependency early, when flexibility, experimentation, and learning are still the main thing. It’s building a tanker when the whole point is still in the turning.
The final distinction between big swings and fast swings, and king-making is permissionless vs. permissioned entrepreneurship. Big swings and fast swings are both permissionless paths to conviction. One through vision, one through learning. King making is permission-based; it only works on the basis of elite buy-in/consensus.
So “calling capital” and becoming a hypercapitalized club deal isn’t wrong per se. It’s just that it needs to come after you (the founder) already developed internal conviction and the vision to go put beaucoup bucks to use uniquely and productively. Once you’ve developed that on your own/without permission, getting into the club can transform you into a substantive, obvious winner. This is fundamentally the process of producing legibility and narrative momentum.
At Slow, we believe deeply in founder-led/internal paths to conviction. Whether that happens heads-down in a notebook (calling your shot) or heads-up in the market (calling your customer) doesn’t matter. We can fund you to conviction/insight or meet you once you have it. But it has to come from you, not us.
So if you’re developing conviction internally, call me maybe.
Read more in this related post from my partner Will.
American exceptionalism is at stake in the fight over the Fed
America has the most robust, deep capital markets in the world. This is now under serious threat from Trump and we have a limited window to save it.
In America it’s not just our companies but our government and households that can access capital more easily than those abroad. This access to capital (along with the American spirit of optimism necessary to risk it) is our greatest compounding advantage. It finances our system of entrepreneurial capitalism, energy infrastructure, consumer credit, defense projects, etc.
Our equities trade at a premium and we borrow at a discount because of:
Trust, stability, and the rule of law. We have non-arbitrary regs/enforcement, a professionalized civil service, robust and independent courts, etc. Collectively it’s property rights and stability that make investors comfortable parking their money in the US
Our capital account surplus. When we send dollars abroad (trade deficits) those dollars have to go somewhere. They wind up as the world’s reserve currency (strengthening and made possible by #1) and they are invested back in the US to finance more growth domestically
Trump is simultaneously undermining each of those in innumerable ways, risking America’s system of free and fair markets and undermining the engine of our global safe haven status.
He is dragging us backward to be a corrupt oligarchy of middling ambition like Russia or Turkey (equities at 4x earnings and junk-rated sovereign debt) because he can’t imagine more or better for America. The ability to access cheaper capital is a huge, compounding, competitive advantage. This is what’s at stake in the fight over the Fed.
Prediction markets for real estate
Polymarket is now doing local home price prediction markets. Basically you can bet on whether or not an index of home prices/rents will go up or down in a given geography over a given period of time.
This is actually not as dumb as it looks and speaks to what I think is the actual point and purpose of prediction markets (if they can get sufficient liquidity).
Quick recap: I think sports betting and sports betting experiences are dumb and bad. In practice this includes most/all prediction markets. But in theory prediction markets have two really valuable features:
They create new information which is socially/economically useful
They allow people/firms to hedge out idiosyncratic risks just like an airline trading oil as a key input to its business
Back to home price markets. This reminds me of an idea from a few years ago for city-specific REITs, basically you could invest in an index of real estate down to a reasonably local level. These never really took off and I don’t think any of those companies still exist.
It’s not about making money; it’s about hedging the risk that home prices will go up too much, impairing your ability to afford your current housing or buy a home in your local market. We’re all basically short housing and have to cover that short every month, day, year.
From a certain point of view this is just another demand-side subsidy to the housing problem if it works.
NYC Breakfast
AIC is a team of software industrialists with a mission to transform the critical robotics supply chains for physical AI that underpin America’s economic power and national security at wartime speed.
America’s Innovation Corporation (AIC) is a software-led, growth buyout holding company actively searching for profitable Original Component Manufacturers in the electronics industry to acquire, modernize, and scale. Our mission is to transform the critical supply chains that underpin America’s economic power and national security.
Slow believes deeply in the mission and is excited about what AIC is building.
If you’re interested in AIC’s mission, please join us for breakfast in the city with CEO Alex Torrey. AIC is hiring for:
The "call your customer" approach works so well because you derive confidence from the only signal that really matters which is whether someone will actually pay for what you're building. Once you've proven that to be true *then* you can pour more fuel on the fire, but inverting the dynamic is just a recipe for destroying LP capital.