Economist on Constellation Software: “Whether by fluke or design, Constellation’s dealmaking success is based on principles that look strikingly similar to those of the world’s heavyweight acquirer, Berkshire Hathaway. Like Warren Buffett, Berkshire’s boss, and his right-hand man, Charlie Munger, the founder and president of Constellation, Mark Leonard, seeks out businesses with a lasting competitive edge. In Constellation’s universe, such a “moat” is enjoyed by software firms that specialise in building digital wares for unsexy industries from car dealerships and builders to spas. Tech giants shun these relatively piddling markets and smaller rivals lack the requisite know-how. The result is rich profits for the incumbents. After a deal is done Constellation, much like Berkshire, runs the business with benevolent neglect. It does not integrate newly acquired companies or parachute in fresh managers. It is content to leave day-to-day operations to the existing leadership. It does not desperately try to squeeze out inefficiencies by centralising common business functions. Constellation believes that splitting a business weakens its bond with customers, notes Paul Treiber of RBC. Cash from the subsidiaries flows to the parent company, which uses it to buy new businesses. These in turn generate more cash, and so on.”
WSJ: “Forty years of research on how people reason about novel possibilities reveals that the glorification of children’s imagination is misguided. Children are no more imaginative than adults. Quite often, they are less imaginative. That is because, while children have the capacity to contemplate hypothetical ideas and counterfactual events, they do not have the knowledge or expertise to use that capacity as effectively as adults. There is room for innovation in everything we do—cooking, cleaning, writing, drawing, navigating, negotiating—but such changes require sustained effort and reflection. We have to acquire the right knowledge and cultivate the right habits of mind. Imagination, like any other faculty, has to be developed and refined through years of practice. Every time we entertain a thought that transcends what we are currently perceiving, we are using imagination. Thinking of mermaids requires imagination, but so does thinking of past vacations, distant friends or future meetings. Almost all mental life requires traveling beyond the here and now to contemplate what was, what will be, what might be, what should be, and what could have been. Life is a series of problems—what to eat? where to go? who to ask?—and solving those problems requires entertaining multiple possibilities and then selecting the best option among them.”
Donald Boudreaux: “If you want lasting change in society – if you want to shift the Overton Window – your only hope lies in your preferred philosophy becoming ascendant. Ideas must change. And for ideas to change the way people talk (and write, and report, and blog, and tweet) must change. So, too, must there be change in the ways teachers teach. Unfortunately, there is no simple recipe for changing ideas in your preferred direction. Nor is there any guarantee that even the most-promising efforts to change ideas in your preferred direction will work. But these realities are no excuse to sit on the sidelines. If you are (as I hope) a liberal, support the production, polishing, and promoting of liberal ideas. There are many different ways to do so. In your personal engagements, do not be afraid to take the liberal position. Also, find those persons and organization that you believe offer the best hope of not only defending, but also of furthering, liberal ideas. Support these persons and organizations.”
Human Progress about Norberg’s book “The Capitalist Manifesto”: “Step back and examine the trendlines. A third of all wealth ever created was created over these last two decades alone. Over the last 20 years, during every minute of complaining about how global capitalism has wrecked the world, over 90 people climbed out of destitution. Child mortality has fallen so dramatically that the number of annual child deaths is down by millions compared to a decade ago even as the total population has grown. The greatest progress occurred in the countries that most integrated into the global economy. Why is that? The miraculous problem-solving capacity of human beings that allows us to improve our conditions—if given the freedom to do so. Hence countries in the economically freest quartile enjoy more than twice the average per capita income of less free countries.”
The Generalist: “Hummingbird Ventures has built an astonishing track record – all while staying out of the limelight. Its secret to success? A meticulous approach to identifying outlier founders…Throughout his career as a venture capitalist, Barend Van den Brande has likely heard upward of 10,000 pitches. Ten thousand times, a founder has sat before him and told a story. They have spoken of their background. They have narrated the problem before them. And they have unfurled their solution. It is the job of a venture capitalist to listen to such stories – and to poke at them. To find the holes yet to be darned and stick a finger through the fabric. To find the story beneath the one being told, hiding. To hear what is being said and what is not.”
