Tag Archives: Inventions

Mark Twain: Venture Capitalist

Mark Twain is one of the greatest American authors. But not many people know he was also a venture capitalist.

A phenomenally bad one.

Twain lost the equivalent of nearly $10 million* in a single investment: the Paige Compositor. Invented by James Paige, it was one of the first typesetting machines.

The Paige Compositor

The machine was a marvel, printing faster than anything else — when it worked. But with 18,000 moving parts, the Compositor was prone to breakdowns.

Paige worked on the machine for over two decades before releasing it. Twain repeatedly doubled down on his initial $5,000 investment during this time, putting in a total of $300,000.

In 1887, Paige finally put the Compositor on the market. By that time, its main competitor, Linotype, had already been on the market for 3 years.

Linotype was cheaper, simpler, and less prone to breakdowns. It soon ran away with the printing market.

Paige died penniless and Twain went bankrupt.

What can we learn from their mistakes?

Paige’s critical error was failing to get a Minimum Viable Product (MVP) to market as soon as possible.

This would’ve let Paige begin to learn what customers want and what competitors were capable of. He might have soon realized that customers didn’t like his machine because it was too expensive and unreliable.

Then, Paige could’ve simplified it, reducing breakdowns and cost. Paige and Twain just might have wound up with a huge success!

Instead, Paige kept tinkering endlessly, divorced from the lessons of the market.

Meanwhile, Twain should’ve never put so much money into a single company!

You never invest more than you can afford to lose in startups. And you must make many small bets to give yourself enough chance of hitting an outlier success.

If Twain wanted to invest in the Compositor, he should’ve placed a small bet and waited. If the company got to market and started selling lots of machines, he could place another small bet.

Investors doubling down on winners is what we call “milestone based funding.”

Companies get a little money to start. Then, if and only if they hit certain milestones, they get more.

It’s the fundamental principle of Silicon Valley, like F = ma in physics.

Today, we systematically avoid the mistakes Twain and Paige made.

We read The Lean Startup by Eric Ries and learn to launch as soon as possible. We read Angel by Jason Calacanis and learn to make many small bets instead of one big bet.

But let’s not judge Twain and Paige too harshly. After all, they never got to read those books.

The lessons of early entrepreneurs and investors taught us what we know today.

After his bankruptcy, Twain went on a world tour telling jokes and stories on stage. He traveled as far as India and made enough to pay off his debts.

Things were looking up for Twain. And then he heard about another revolutionary invention

What lessons do you take from Twain and the Paige Compositor? Leave a comment at the bottom and let me know!

Have a great weekend everyone! 👋

More on tech:

What I Learned From an Investor Who Turned $100,000 into $100,000,000

The Lean Startup

John Doerr’s Biggest Mistake

Note: Twain invested approximately $300,000 in the Paige Compositor, which failed in 1894. That equates to about $9.7 million in today’s dollars.

Photo: Twain in Nikola Tesla’s lab

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What if Everyone on Earth Had Super Fast Internet for $1?

Only about half the world has internet access. Even rural America lags behind in broadband penetration.

But what if everyone on earth had incredibly fast internet for $1 a month?

A fascinating company called Akash Systems just might pull that off. It is delivering internet 100 times more cheaply than its competitors.

Given that Starlink is charging $99/month for its high speed satellite internet, Akash may one day be able to do it for as little as a dollar.

“This is sort of where the internet was in, I would say, ’98, ’99.”

Felix Ejeckam

The key is a new type of transistor called Gallium Nitride (GaN)-on-Diamond. The founder of Akash, Felix Ejeckam, invented it.

The hottest part of a transistor is put within nanometers of a synthetic diamond. Synthetic diamonds conduct heat better than any other material.

This means that the transistor produces way less heat. Anyone who’s had a laptop on their lap knows it can get hot.

Electronics getting hot cause all sorts of problems, especially in space.

Excess heat means problems with wireless communication. It also requires large heat sinks to dissipate the heat.

This makes the satellite bulkier and more expensive.

Today, Akash focuses on building transmitters for other satellite makers. In the future, they plan to launch their own satellites and internet service.

I can’t wait to sign up and cut my bill down to nothing!

In an interview with the Ejeckam, I was fascinated to hear that he dreamed up this idea 17 years ago. It shows the persistence needed to make a dream real.

“The limits of your imagination today define the limits of space tomorrow.”

Felix Ejeckam

More on tech:

Robot Hands, Vertical Farms, and the Future of Food

How Solana Could Wipe Out Visa and MasterCard

Inside a Startup Accelerator Demo Day

Photo: “Antares Rocket Launch” by NASA Goddard Photo and Video is licensed under CC BY 2.0

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