Latticework and Venture Capital, Intro
Latticework, by Robert Hagstrom has been an especially influential work on my development as a venture investor. Having had a liberal arts background, coming across a book that celebrates and values a multi-disciplinary approach was encouraging, illuminating and humbling. I can unreservedly say applying the concepts and strategies in this book has better enabled me to cut through the noise of the venture environment and approach my work with more clarity.
Robert Hagstrom is an author and investor. His titles include Latticework, The Warren Buffett Way, and Investing: The Last Liberal Art, all worthy reads. His tenure as an investor includes portfolio management duties at Legg Mason and Stifel.
Admittedly, Hagstrom’s investment record pales in comparison to Berkshire’s, however, the approach he champions is largely derived from Warren and Charlie Munger.
The title, “Latticework” comes from a quote from Munger, “You’ve got to have models in your head, and you’ve got to array your experience — both vicarious and direct — on this latticework of models”.
The idea being, that true insight comes from a spectrum of multi-disciplinary knowledge, and that having a basic understanding of a wide variety of subjects enables a more flexible interpretation of the opportunity at hand, leading to clarity in decision making.
With Munger’s quote as a guide, Latticework delves into overviews of 6 categories of knowledge, including brief, selective retrospectives of each discipline, and their corresponding and comparative utility with respect to investing.
The subjects are: Physics, Biology, Social Sciences, Psychology, Philosophy and Decision Making.
Though Hagstrom ruminates on applying the latticework approach to the public markets — and value investing, specifically — I believe the approach holds a great deal of relevance to venture, especially at the earliest of stages.
Having read Latticework both before and during my time as a venture investor, I’ve decided to share my notes on each chapter, the VC analogues as I understand them, and my broad takeaways from each chapter.
Enjoy.
