Hey folks!
This week, I’m sharing a Twitter thread I wrote about how social influence is a new form of capital.
I don’t think this trend is going anywhere. If you are a new VC and you aren’t building a platform / community, you’re likely to struggle in the long term, because you need to think about how to channel power through networks like current, not hoard power like currency…
![Twitter avatar for @ry_paddy](https://substackcdn.com/image/twitter_name/w_96/ry_paddy.jpg)
1/ The pace of this transformation is accelerating
2007: 50 Cent earns between $60m and $100m after the Coca-Cola Company acquires Vitamin Water
![Image](https://substackcdn.com/image/fetch/w_600,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fpbs.substack.com%2Fmedia%2FEgMCFlXXYAAM-bd.jpg)
![Twitter avatar for @ry_paddy](https://substackcdn.com/image/twitter_name/w_96/ry_paddy.jpg)
2019: @TheNotoriousMMA 's whiskey brand Proper Twelve generates $1 BILLION in retail sales (3.3 million bottles) in its first full year of operations.
![Image](https://substackcdn.com/image/fetch/w_600,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fpbs.substack.com%2Fmedia%2FEgMCg2rWsAAxRxl.jpg)
![Twitter avatar for @ry_paddy](https://substackcdn.com/image/twitter_name/w_96/ry_paddy.jpg)
4/ Meanwhile in China, Ruhnn, an influencer factory, raises $125m in IPO on @Nasdaq @ $600m valuation
![Image](https://substackcdn.com/image/fetch/w_600,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fpbs.substack.com%2Fmedia%2FEgMCy7OXkAIQxaZ.png)
![Twitter avatar for @ry_paddy](https://substackcdn.com/image/twitter_name/w_96/ry_paddy.jpg)
5/ 2020: @shl , @gumroad founder, raises a $5 million VC fund with 1 tweet, a Notion memo and a zoom call with 1,800 participants (not a huge fund, but bear with me…)
![Image](https://substackcdn.com/image/fetch/w_600,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fpbs.substack.com%2Fmedia%2FEgMC9hMXgAUyM-F.jpg)
![Twitter avatar for @ry_paddy](https://substackcdn.com/image/twitter_name/w_96/ry_paddy.jpg)
6/ New Power is taking over from Old Power.
“New power models are enabled by peer coordination and the agency of the crowd.”
![Image](https://substackcdn.com/image/fetch/w_600,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fpbs.substack.com%2Fmedia%2FEgMDKzIWkAICkzC.jpg)
![Twitter avatar for @ry_paddy](https://substackcdn.com/image/twitter_name/w_96/ry_paddy.jpg)
7/ “Old power works like a currency. It is held by few. Once gained, it is jealously guarded and the powerful have a substantial store of it to spend. It is closed, inaccessible, and leader-driven. It downloads, and it captures.”
![Image](https://substackcdn.com/image/fetch/w_600,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fpbs.substack.com%2Fmedia%2FEgMDVM0WoAAqsJY.jpg)
![Twitter avatar for @ry_paddy](https://substackcdn.com/image/twitter_name/w_96/ry_paddy.jpg)
8/ “New power operates differently, like a current. It is made by many. It is open, participatory, and peer-driven. It uploads, and it distributes. Like water or electricity, it’s most forceful when it surges. The goal with new power is not to hoard it but to channel it.”
![Image](https://substackcdn.com/image/fetch/w_600,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fpbs.substack.com%2Fmedia%2FEgMDcWxXsAIO7DH.png)
![Twitter avatar for @ry_paddy](https://substackcdn.com/image/twitter_name/w_96/ry_paddy.jpg)
@BrewDog , the fastest-growing beer brand in history (founded 2007, worth approx $2 billion), has a crowd (army) of over 50,000 shareholders. It has made many of them wealthy.
![Image](https://substackcdn.com/image/fetch/w_600,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fpbs.substack.com%2Fmedia%2FEgMDrgzXkAAYRQN.jpg)
![Twitter avatar for @ry_paddy](https://substackcdn.com/image/twitter_name/w_96/ry_paddy.jpg)
9/ Prediction for VC over next 20 years: unbundling and fragmentation, @AngelList’s rolling funds become increasingly influential, some of most successful GP’s are social media influencers backed by thousands of people. Platforms like @Crowdcube also mature.
![Twitter avatar for @ry_paddy](https://substackcdn.com/image/twitter_name/w_96/ry_paddy.jpg)
10/ The first billion dollar equity crowdfunding platform will emerge, as predicted by @kevin2kelly in “The Inevitable”.
Probably @AngelList . @naval be chillin’ 😎
![Image](https://substackcdn.com/image/fetch/w_600,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fpbs.substack.com%2Fmedia%2FEgMD9xvXkAEMEZ4.jpg)
![Twitter avatar for @ry_paddy](https://substackcdn.com/image/twitter_name/w_96/ry_paddy.jpg)
11/ Long term potential: collective intelligence systems take over as LP’s finally realise they deliver superior returns.
(See "Superforecasters" by @PTetlock and "the wisdom of crowds" by @JamesSurowiecki )
![Image](https://substackcdn.com/image/fetch/w_600,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fpbs.substack.com%2Fmedia%2FEgMELisWsAARMXg.jpg)
![Twitter avatar for @ry_paddy](https://substackcdn.com/image/twitter_name/w_96/ry_paddy.jpg)
13/
Essential reading:
hbr.org/2014/12/unders…
Superforecasters by @PTetlock
The wisdom of crowds by @JamesSurowiecki
![](https://substackcdn.com/image/fetch/w_600,h_314,c_fill,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F90fb116e-523a-46bb-8a3d-088744efaf29_2000x940.png)
See you next week 😊❤️