Taylor Pearson: from Apprentice to Hedge Fund Manager
Taylor Pearson is the CEO of a hedge fund. Taylor’s aptly named Mutiny Fund is designed to earn large gains in times of high volatility and tail risk.
An investor that gives some of their money to Mutiny is aiming to make money in events like the 1987 Flash Crash, 1998-2001 Dot Com rise and crash, 2008 Financial Crisis, or the 2020 coronavirus pandemic.
A few years ago, I would have been overwhelmed by the complexity of such an endeavor and unable to imagine how he found himself in such a role.
I’d think “he must be a super genius”, or that he came from a wealthy family.
Luckily, I’ve followed Taylor for over five years and read his book End of Jobs.
In the book, he outlines the common stair step approach he’s seen numerous entrepreneurs climb in their career arc.
Most begin either freelancing or starting an agency focused on a narrow skillset they’ve developed.
Then, they graduate to productizing their service. By creating a system, they train talent to replace themselves and escape the grueling client services grind.
Next usually comes a digital product that is infinitely scalable, like an online course or resource. Here’s an example of a lawyer selling template contracts.
After that, many entrepreneurs are seduced by software-as-a-service business models. Saas customers paying recurring revenues (like productized service businesses), but have the infinitely scalable, and high margin, features of a digital product business.
Taylor has followed his own stairstep approach in his career.
Before writing The End of Jobs, he apprenticed at an online product business, helping with the marketing and SEO. The company sold valet equipment exclusively through online channels.
In his spare time, he wrote his book and a compelling collection of blog posts.
The success of his book set the stage for a career consulting on the growth of other brands and businesses.
His ongoing blogging led to a substantial email list and gave him an outlet to continue exploring diverse intellectual interests.
They also helped him uncover a model for his hedge fund.
Watching small, digitally native company steal market share from incumbents by embracing the most modern tools and staying close to customers was a replicable strategy in other domains.
As Taylor’s reading and love of history drew him towards the finance industry, he began to see shortcoming in the modern portfolio theory and orthodox financial advice.
His fund concept, based in assuming that extreme events are a regular occurrence in history and most people underestimate their likelihood, has ties back to reading and writing that he had done years prior to founding the firm.
By having those blog posts up on the internet, he created a magnet for attracting the right potential investors that he’d want to work with.
Here are some of his best posts:
Taylor has the best book summary of Nassim Taleb’s book ‘Antifragile’ that you’ll find.
It is comprehensive and clearly written. He does a fantastic job making Taleb’s exploration of “things that gain from disorder” tangible.
Before you read the book, read his summary to learn how to make yourself less fragile.
If you do what everyone else does, you’ll get the same results as everyone else.
The standard 60-40 portfolio (60% equities, 40% bonds) is broadly accepted, yet a brief review of history reveals dangerous tail risks.
Marc Andreessen, a renowned internet entrepreneur and venture capitalist has a famous saying:
He uses it to inform the businesses that he invests in and the areas of opportunity for disruptive innovation.
In a brilliant (and long) essay, Taylor discusses how blockchain-based digital currency and the proliferation of digital marketplaces (like Uber, Fiverr, etc) have injected competitive markets into increasingly more domains.
With all this public thinking, Taylor has established his intellect publicly.
When he and his partner decided to launch a fund, he had the great benefit of being able to inform an audience that already had grown to trust him.
He also had a collection of wealthy friends in his network as a byproduct of working with entrepreneurs to build companies.
If you’d like to do the same with your career, start looking at your current endeavors as a stair step to the next level.
Never burn a bridge.
Make more content documenting your thoughts and interests.
Kick some ass.