ExpertsFMAmerican Dynamism (with Katherine Boyle)
Acquired · June 6, 2022
5 Selected Lessons:
heuristic · 2 reasoning_pattern · 2 framework · 1
American Dynamism investment thesis
Source
Acquired — American Dynamism (with Katherine Boyle) (June 6, 2022) · at 4:04 ▸ · at 7:27 ▸ · at 17:08 ▸
When this applies
when evaluating whether to invest in or build within a large, regulated, physically-grounded market that technology has historically ignored
The takeaway
The biggest untapped opportunities often sit in large, essential, heavily regulated markets that have been avoided precisely because they are hard — not because they are unimportant.
Why it works
Decades of software investment avoided sectors with entrenched regulation and physical constraints, leaving massive markets (that touch every citizen) technologically underserved and overpriced relative to consumer tech.
One level up
Market avoidance driven by difficulty, not by lack of demand, is itself a signal of durable opportunity for those willing to go deeper down the J-curve.
Where it stops holding
This stops working when a sector's regulatory capture is so complete that no private capital or technology can realistically change unit economics within a fundable time horizon.
Detail
procedure:
- Identify large sectors that touch every citizen (defense, education, housing, transportation, healthcare) but have seen little software penetration
- Recognize that regulatory capture and entrenched incumbents, not lack of demand, explain the gap
- Invest despite difficulty because end markets are enormous and underserved
- Expect long J-curve investment periods before business model is proven
benchmarks: {}
rationale: Software has not reduced costs in healthcare, housing, and education the way it has in consumer goods, per the AEI cost-curve graph Boyle cites, because these sectors resist technology adoption due to regulation.
In their words
So the most simple definition is it's companies that support the national interest. So it's everything from companies that sell directly to government, like aerospace and defense, these classic industrial sectors that have been supporting government since the mid-20th century, but then also things that every citizen cares about and takes part of.
Being right, non-consensus, and timing (why now)
Source
Acquired — American Dynamism (with Katherine Boyle) (June 6, 2022) · at 10:24 ▸ · at 17:08 ▸ · at 19:14 ▸
When this applies
when evaluating whether a contrarian thesis is not just correct but also timely enough to act on
The takeaway
Evaluate any contrarian bet along three axes — correctness, consensus gap, and timing catalyst — not just whether the idea is right.
Why it works
A thesis needs three things to pay off: it must be true, it must be underappreciated by others (non-consensus), and the timing catalyst must be present — without timing, correct-but-early theses fail to generate returns.
One level up
Truth alone is insufficient for action; the gap between truth and consensus, combined with a triggering event, determines whether a window has opened.
Where it stops holding
This stops working when there is no clear external catalyst (like COVID) to explain why the timing is suddenly right, making the thesis a correct-but-premature bet.
Detail
approach: Ask: is the thesis correct? Is it non-consensus? And critically, why now — what changed to make this the right moment?
signals:
- A major exogenous shock (COVID) changing behavior/attitudes
- cultural shift (counterculture merging with culture, broader founder profiles)
- capital glut enabling non-traditional founders to act
rationale: COVID was identified as the specific catalyst that made a long-standing underappreciated truth (software hadn't touched physical/civic sectors) suddenly actionable.
In their words
There's being correct, there's being non-consensus and correct, but then there's also getting the timing right, the why now.
Remote-first, decentralized company building enabled by COVID
Source
Acquired — American Dynamism (with Katherine Boyle) (June 6, 2022) · at 45:23 ▸ · at 49:11 ▸ · at 59:01 ▸
When this applies
when deciding whether geographic hub concentration is still necessary for building and scaling a serious company
The takeaway
Once a forcing event proves that remote relationship-building and remote execution work at scale, long-held assumptions about requiring physical colocation in a specific hub should be discarded.
Why it works
COVID normalized remote relationship-building and showed investors that online/video communication can substitute for the old requirement of physical colocation with a VC hub, removing the geographic gatekeeping that previously forced talent migration to a few cities.
One level up
External shocks can permanently dissolve previously-assumed structural constraints by proving, in practice, that the assumed requirement was never actually necessary.
Where it stops holding
This stops working when a specific business genuinely requires physical proximity to its customer or ecosystem (e.g., Hadrian needing to be near aerospace/defense customers in Los Angeles), in which case geography still matters.
Detail
approach: Evaluate whether a founder's talent, customers, and capital relationships can be fully built and maintained remotely before assuming they must relocate to a traditional hub.
signals:
- second/third-tier cities producing large venture outcomes (Atlanta, Miami, Austin, Provo, Salt Lake City)
- investors and founders building board relationships over video rather than in-person Sand Hill Road tours
rationale: Pre-COVID, serious companies were expected to relocate to Silicon Valley; COVID proved that capital, hiring, and governance can all happen online, enabling a 'democratization of tech around the country.'
In their words
And so, the number of new companies we are going to see sprout up in second and third cities across America, I don't even think it has to be really big cities. I think it can be smaller towns.
Finite-talent sectors become holding companies early
Source
Acquired — American Dynamism (with Katherine Boyle) (June 6, 2022) · at 7:27 ▸
When this applies
when a market has a very limited supply of specialized talent required to build in it at all
The takeaway
In markets gated by scarce specialized expertise, expect consolidation and single-winner dynamics to emerge much earlier than in markets gated only by capital or go-to-market execution.
Why it works
If the pool of people capable of building a product is small, the winning company absorbs nearly all of that talent, eliminating meaningful competition early rather than later.
One level up
The scarcity that defines a market's talent pool, not just its customer demand, determines how its competitive structure will evolve.
Where it stops holding
This stops working when the specialized skill becomes commoditized or trainable at scale, removing the talent bottleneck that created the early consolidation.
Detail
rule: Expect one or two dominant players to emerge quickly and then compete mainly against legacy incumbents, not many venture-backed peers.
threshold: Contrast with consumer/enterprise where 3-4 competitors commonly go public in the same space.
rationale: There's finite talent around things like aerospace and defense, so you don't see as many competitors — companies become holding companies and attract all the talent early.
In their words
There's finite talent around things like aerospace, there's finite talent around things like defense. So you don't see as many competitors
A recurring name across unrelated calls is a signal to pay attention
Source
Acquired — American Dynamism (with Katherine Boyle) (June 6, 2022) · at 53:59 ▸
When this applies
when evaluating which unknown operator or company to prioritize amid many possible leads
The takeaway
Treat independent, repeated mentions of the same name/company across unconnected conversations as a strong signal worth investigating, even before you've met them.
Why it works
If a name independently surfaces across many unrelated conversations with different people in a niche field, it indicates the person/company occupies a structurally important node that the broader network has already converged on.
One level up
Network-wide convergence on a signal is itself informative, independent of the content of any single conversation.
Where it stops holding
This stops working when the repeated mentions are driven by hype/PR momentum rather than genuine structural importance, producing false-positive buzz.
Detail
rule: Whenever the same founder's or company's name keeps coming up unprompted across many different calls in a space, pick your head up and pay attention.
threshold: Boyle describes it as 'every third call' she was having about aerospace/defense.
rationale: Everyone in the ecosystem was rooting for and discussing the same founder because the whole sector depended on that company succeeding (e.g., for parts delivery).
In their words
And I always joke about anytime you hear this about a founder, like you should always like pick your head up. It's like every third call I was having about aerospace, about like what's happening in defense, his name would come up.