Marvin’s Best Weekly Reads October 4th, 2020
“A Society that separates its scholars from its warriors will have its thinking done by cowards and its fighting done by fools.”
Very important subject. So insightful. Take Asymmetric Bets!
"Asymmetric opportunities usually have meaningful upside in a success case, and meaningful learning or development in a downside case. If the downside case is still one of the best case scenarios you can imagine, then that’s an easy asymmetric bet to take.
In addition to pursuing things that have meaningful upside (and thus some risk), asymmetric bets can also involve taking a bet in risky spaces that other people aren’t pursuing."
"The irony is that, in failing to take risks, we fail to gain the optionality that comes from doing so.
Risk-taking brings its own optionality. Especially when you’re young, accumulate optionality through the skills you gain, knowledge you acquire, and the unique experiences you undergo.
Accumulate optionality through differentiation, not conformity!"
https://eriktorenberg.substack.com/p/take-asymmetric-bets
"After the buzz of Social Dilemma dies down, the rest of us will still be stuck here with our brains wired to each other in fundamentally uncensorable ways that transcend niceties like national borders or political parties. That startling technological development, the final decoupling of geography from human communication and its democratization to everyone on the globe, will never go away however fervently Luddite nostalgists may wish it so².
Ultimately it’s up to us if the next chapter in our history, to use the printing press/Reformation timeline as a guide, is the Thirty Years’ War—the bloodiest, bitterest conflict in European history until WWII—or the Enlightenment, a period of unprecedented scientific and political progress."
https://pullrequest.substack.com/p/the-social-dilemma-and-the-last-fucking
Incredible talent and character: Lady Gaga.
"What pop spectacles should look like in 2020 is a question mark, as COVID-19 and the nation’s reckoning with systemic racism, sparked by more police killings of Black Americans this year, offer no easy answers for how artists should use their platforms. But if there’s a way to be of service, Gaga is up for the job. To make Chromatica, she had to pull herself out of one of the darkest places she has ever been, and she has a familiar message for anyone trying to do the same: Just dance — it’s going to be OK.
“When I see people struggling like they are right now,” she says, “my brain goes, ‘Put on your superhero suit. Let’s go.’ ”
"The simplest outline of a K-shape recovery is that some industries and companies and individuals will thrive and others will flounder and fail.
The stock market, the labor market, and the housing market are all areas we see this dynamic at work.
Haves and have nots and the way policy shapes the divergence between these two classes in America has been a consistent theme for the last few decades and it seems to be the world we’re barreling towards living in after this crisis ends, too. We choose to support some areas, leave others for dead, and call it the market system when the dust settles."
"And so like almost everything else with this crisis, the “housing boom” is but a mere exaggeration of what had already been in play during the Before Times: single-family homeownership serving as an increasingly unattainable goal. The bull case for homebuilding stocks and the housing market at large is a bear case on affordable availability."
https://mylesudland.substack.com/p/the-top-of-the-k
What a timely profile. I admit I was feeling pretty crap myself the last few months while stuck in lockdown in the Plague States of America aka USA.
"Sometimes it feels like the world is looking at you saying things like, “Come on, man, just get over it. Don’t think like that. Just move on.”
But what people on the outside don’t always understand is that it takes all of your strength and willpower just to exist. Just to keep on going. Battling depression, battling anxiety, battling any mental health disorder … it’s all just so unbelievably exhausting.
That’s been on my mind a lot lately, considering the millions and millions of people around the world who have lost their jobs, or lost their loved ones, or who are just dealing with the unprecedented anxieties of being a human in 2020. I know so many people out there are suffering right now. I’m no different. I’m still going through it. Even after all the work I’ve tried to do on myself over the last two-and-a-half years, some days are just brutal.
Let’s just call it what it is. Some days are total shit, right?"
https://www.theplayerstribune.com/en-us/articles/kevin-love-mental-health
"The merchants who make up this bustling microeconomy — largely immigrants and people of color — work long hours hawking everything from hot dogs to t-shirts, often off-the-books and without permits.
And during the summer, one particular product is king: a fruity, frozen alcoholic concoction called a nutcracker.
From May to September, dozens of nutcracker vendors sling their drinks at festivals, parades, and beaches, selling squat, frosty bottles out of garbage bags and coolers. The most skilled operators can clear upwards of $500 in less than 30 minutes.
But during the pandemic, the street cocktail landscape has seen a shakeup.
While street vendors don’t qualify for liquor licenses and must run their operations illegally, new legislation has allowed restaurants to sell their own take-out cocktails.
While most vendors have continued to operate in the shadows, one of them— 35-year-old Amseshem Foluké — has decided to fight back by attempting to take his illegal operation corporate.
As it turns out, selling these drinks is not so dissimilar from running a startup: it requires top-shelf marketing skills, a keen understanding of supply and demand, & a willingness to occasionally bend the law."
https://thehustle.co/the-business-of-selling-illegal-cocktails-on-the-streets-of-nyc/
"And so one of the planet’s richest medical doctors, who made a $6.7 billion fortune developing breakthrough treatments for cancer and diabetes, seeks to battle the pandemic. The weapons in his arsenal: the cancer treatments he has spent the past decade and a half developing. He’s aiming them at all aspects of the coronavirus, from a vaccine to treatments for mild cases to therapies targeted toward patients on ventilators.
It’s an enormously ambitious plan from a man who has often been accused of being a hype artist. In an earlier incarnation, Soon-Shiong was a respected surgeon and professor at UCLA Medical School, but throughout his wildly successful entrepreneurial second act, he has been derided as more showman than scientist, thought guilty of overinflating results and taking undue credit.
A few years ago, for example, he boasted about using a breast cancer drug to treat a patient with cervical cancer—but other groups were already seeing similar successes. As we wrote in a 2014 cover story, “While he’s undeniably brilliant, Soon-Shiong is equally undeniably a blowhard.”
This is really neat. Amazing scenery. Snowboarding in Ten Sleep, Wyoming!
https://www.youtube.com/watch?v=ao2nvyAPdv0
"Simultaneously, work on yourself. Face your inner demons. Get help. Face mental illness too. Be kind to yourself. Realize you’re doing the best you can. Forgive yourself for your messy past, where you acted like a dictator with too much money. Say sorry to the people you hurt. Forgive people who you banned for life because they violated one of your rules. Forgive people for no reason at all.
Look at what makes you happy now: family, your partner, messages from readers, mending of broken relationships.
Feel what it’s like not to run towards money. Notice how fancy cars, houses and luxury goods have zero appeal to you. Take the simple things in life and let them change your life.
Have money allow you to buy back your time, instead of spending money on things that create a never-ending trail of debt. Make the acquisition of wealth secondary. Focus on how you can be helpful. Get excited by all the people you can meet and do life with.
Learn to make a difference rather than a profit."
https://medium.com/the-ascent/how-to-make-enough-money-to-retire-in-the-next-5-years-6a7683ce5a16
I think this is important & brave (can't believe I am writing this word but we are in stupid WOKE age) for companies to be clear on what they are about, employees and choose to work there or not.
"The narrower interpretation is how I intended the mission to be understood. I don’t think companies can succeed trying to do everything. Creating an open financial system for the world is already a hugely ambitious mission, and we could easily spend the next decade or two trying to move the needle on global economic freedom. We will keep building the most trusted and easy to use financial products that help people access the cryptoeconomy, so everyone can get the benefits of this new technology and we can bring more economic freedom to the world."
https://blog.coinbase.com/coinbase-is-a-mission-focused-company-af882df8804
"Technology will continue to make our lives easier… If true… this means that we should be over-exposed to technology from an investment perspective. Take the S&P 500 and look at the mix of the various industries, oil & gas, real estate, financial services etc. Simply take this mix and buy more of the technology sector. Sure. You may lose money in a particular year, month or week. And. Over the next 10-years you’ll eventually see technology become a more and more important part of the index.
Knowing that technology will continue to push forward at rapid rates (self-driving cars, curing diseases with AI, drones and new automated delivery devices) we can conclude that working in an industry that continues to help technology is a positive as well. For that we have to go “up stream” and move to the supplier side."
https://wallstreetplayboys.com/what-isnt-going-to-change-and-qa-announcement/
"The tragedy of California is not its cacophony of specific failures, but that our “solutions” are all negative, or restrictive, rather than creative. Banning things, and often things that improve the lives of Californians, is presently our entire philosophy of government: no new science or technology endeavors, no meaningful public infrastructure projects (or, at least nothing resembling success here), and certainly nothing so ambitious as terraforming the Salton Sea. But with each of our challenges comes tremendous opportunity."
"What if a state like California, with all of its potential, were run with a long-term plan in mind for abundant energy, fresh water (drought be damned), affordable housing, thriving, growing cities, and first rate science and technology education? What would a California worth following look like? Up until very recently, the impulse of the American political right was to stop the government from doing anything, while the political left, which dominates in California, was ostensibly in favor of using large, expansive government as a tool for progress. But the California government has no coherent strategy for progress, and with its increasingly anti-creative, reactionary legislative impulse, it’s starting to look… well… pretty conservative."
https://solana.substack.com/p/gilded-rage
"Oper8r hopes to fill in the gap between what it takes to be an occasional investor and become a full-time VC who is backed by institutional dollars. The program, which just completed its debut cohort, describes itself as Y Combinator for funds and emerging fund managers. The goal is to teach investors who want to build an institutional fund about the rules and oh-so-many regulations of the game.
Oper8r was started by Winter Mead, who worked as an institutional investor for years at Sapphire Ventures and Hall Capital Partners, and Welly Sculley, who operated at venture capital-backed fintech companies Ripple and Boku. The friends saw that there was no organization focused on next-gen fund managers. Instead of raising capital to create a program, the friends started a program, free of charge, to train investors."
https://techcrunch.com/2020/09/29/y-combinator-for-emerging-fund-managers-oper8r/
Batch 18 represent! Love seeing old portfolio cos thrive!
https://techcrunch.com/2020/09/29/cube-js-raises-6-5m-for-its-open-source-data-platform/
Unclear if this is a good thing or bad thing but here we are.
"But this year, politics, social justice issues, and current events are inextricable from our daily lives. It’s hard to have a conversation about literally anything without the context of everything going on. The coronavirus has us all socially distanced and unsure what the holidays will look like. The racial justice movement is sweeping through workplaces around the nation. The economic collapse is impacting millions of Americans, with hundreds of thousands of people out of work or running even tighter household budgets.
What Bosstick’s case shows is clear: The era of influencers being apolitical online is over. Influencers who continue to post their usual content without acknowledging the realities of this country face the risk of appearing so laughably out of touch that it renders anything else they have to say irrelevant. And as we get closer and closer to Nov. 3, an influencer who remains silent about one of the most consequential US elections in history may risk alienating and angering their followers in such a deep way that would be impossible to recover from."
Lots to debate in this write up for Venture Capital aficionados.
"Is venture capital a risky asset class? No. Most VC funds choose to act in a risky manner by not diversifying, but that does not make the asset class risky. To de-risk venture capital, CIOs simply need to acknowledge that VC math is different from public markets math. The importance of low-probability, excess-return-generating investments means that proper diversification requires a portfolio of at least 500 startups.
It will take work to assemble such a portfolio. It is hard to do by investing directly. Current funds and funds-of-funds are rarely designed with diversification in mind. Instead, they concentrate funding in a small subset of ultra-popular entrepreneurs, sectors, and geographies, which risks driving down returns on capital, leaving higher-return strategies underfunded."
"In a low-growth economy, the gangster way to register a sustainable increase in shareholder value is a move to a rundle (my term for “a recurring revenue bundle”).
Apple boasts the greatest asset in the consumer world, the iPhone. However, the greatest collection of consumer assets assembled under one corporate roof, is also the firm that stands to recognize the greatest accretion in stakeholder value with an aggressive move to a rundle. Simply put, it’s time to unleash the Mouse. Disney+ needs to bust a move to Disney2."
"The best API-first companies give their users “superpowers” that they wouldn’t have otherwise.
While you might not think of them this way, some of the biggest companies of the past few decades originated from easily-implemented APIs that gave their users heightened power, efficiency or accessibility. API-first companies like Stripe, Twilio & Okta either created new markets or dramatically grew existing categories."
https://medium.com/@gisford/the-third-party-api-economy-891b2a774fa5
"Signal is an end-to-end encrypted messaging service, similar to WhatsApp or iMessage, but owned and operated by a non-profit foundation rather than a corporation, and with more wide-ranging security protections. One of the first things you see when you visit its website is a 2015 quote from the NSA whistleblower Edward Snowden: “I use Signal every day.” Now, it’s clear that increasing numbers of ordinary people are using it too."
“Any time there is some form of unrest or a contentious election, there seems to be an opportunity for us to build our audience,” says Brian Acton, the Signal Foundation’s co-founder and executive chairman, in an interview with TIME. “It’s a little bit bittersweet, because a lot of times our spikes come from bad events. It’s like, woohoo, we’re doing great — but the world’s on fire.”
The “Red Test”
I stole this from a business consultant named Niko Canner.
How do you score all the various initiatives or projects you are working on. Red, yellow or green? Green means things are going well. Yellow means things are neutral. Red means things have stalled out or at high risk. These can be used in both a business or a personal context.
In your organization, do you have a culture where it’s acceptable to raise a red status & be willing to discuss this? This is a signal on how open your organization and culture is.
Why is a project Red? Can you talk about this? How do you fix this? How do you get this to Green. It’s a good but simple status report. And helps you understand what’s happening and discuss problems when they come up.
You can also use this for your personal life outside of work. So for example, how would you rate each of the important parts of your life. Parts for example like Family life, Marriage/Love Life, Personal Finance, Health & Fitness.
I’ve personally started using this framework for my life and it has been quite eye opening. I think it will help you as well.
After Hardship Comes Happiness
In 2020 we have been battered by the Coronavirus health crisis, economic challenges of the recession, civil disturbances & riots in many cities. And now wild fires and storms across the United States. No wonder we see so many of the old institutions we used to count on now failing us. It’s been a rough year. They have been hammered by crisis after crisis. Many of these organizations are in paralysis and thus completely ineffective.
I think the reason for this is that we’ve had it so good for so long. Many of us have just gotten too accustomed to good times. Ie. peacetime. We’ve had economic good times, a full job market and overall prosperity for almost 10 years. It’s not a surprise that many of us have gotten soft. And the people at the top of many of our business & governmental organizations have gotten complacent. As the great African proverb says “Smooth seas do not make for skillful sailors.”
But something about a crisis brings out the best (and the worst of us). It’s a shock to the system and wake up call. A crisis calls for us to wake up and take action and fix all the things we should have but did not. It also calls forth a new kind of leadership to step up and take the lead. We would not have Winston Churchill who was ignored during peacetime. But was exactly the right leader at the right time for World War 2 and helped lead the Allies to victory (and was very quickly shelved when the war ended).
We are seeing this slowly happen in many startups, business organizations and even now in some local governments and states. This is what makes me hopeful that despite the painful year we’ve faced in 2020, something good will come out of this. That many of us will have rediscovered & prioritized our values and relationships. And at a minimum we’ll have toughened up to prepare for the next crisis.
Marvin’s Best Weekly Reads September 27th, 2020
“Hard times create strong men. Strong men create good times. Good times create weak men. And, weak men create hard times.”--G. Michael Hopf
"Like a lot of other vacation destinations — the Hamptons, Cape Cod, Aspen and so on — the Truckee housing market is booming during the coronavirus pandemic. It's up over 23% since last year, according to data from Redfin, a real estate brokerage. Truckee is part of a trend that realtors and journalists are calling "Zoom towns," places that are booming as remote work takes off."
Big fan of his work.
“Part of him was just completely untamed. When he sat down with people, he was almost harnessing this madness within him. You get a little of that with Ethan. His antennae are always out, grabbing, catching every little bit of information. He’s an outsider. It’s not like he’s attempting to do it. It’s just that he’s at a different radio station. He’s operating on his own frequency.”
Throughout his career, Hawke has consistently challenged himself to grow. He has appeared in more than eighty movies, predominantly independent films interspersed with Hollywood money-makers. He has directed four films, written three novels, and co-founded a theatre company.The range of Hawke’s roles—a romantic charmer (in the “Before” trilogy), a drug-addled Chet Baker (in “Born to Be Blue”), a guilt-ridden suicidal priest (in “First Reformed”), to name just a few—is also a reflection of his expansive empathy. “Acting, at its best, is like music,” he said. “You have to get inside your character’s song.”
https://www.newyorker.com/magazine/2020/09/21/the-many-faces-of-ethan-hawke
The kids are going to be okay!
“One thing we can all agree on is a willingness to get out there and build things,” said Justin Zheng, 19, one of the founders of the group. “Yeah, we build some meme products, but we also build mission-driven things. We want to build a more positive internet, things that help people.”
"The group was founded as a kind of counterpoint to the Silicon Valley establishment, which its members say is exclusive, elitist and riddled with systemic problems including sexism, ageism and racism. Rather than reinforcing norms and kowtowing to the most prominent and outspoken V.C.s on Twitter, Gen Z Mafia members have tried to cultivate an environment that feels inclusive and aligned with their values."
https://www.nytimes.com/2020/09/15/style/gen-z-tech-mafia.html
A company like Cameo could only have emerged in a celebrity driven place like America.
"The pandemic, in a sense, has only accelerated a process that was already in motion. On apps like Instagram & Twitter, celebrities have always acted as laborers in an atomized, precarious economy, exchanging nuggets of seeming love & attention for money. That exchange, though, is circuitous. You might stream a new single by an artist who posts a picture of herself at the beach, or buy the sweatshirt she poses in & tags, but use of the platform remains free, so our sense of “celebrity influence” hovers fuzzily, eliding the monetary and highlighting the social. Cameo strips away the illusion: celebrity content is always a product. This realization is depressing, but there is also something unburdening about it.
On Cameo, performers can be straightforward about the fact that they are exchanging their attention for money, & this frees them from the faux-authenticity of the Instagram influencer; users don’t have to worry that there is some subtle corporate sponsorship buried in the selfies. The transactional nature is out in the open, & videos swerve between overt, unapologetic shilling & surprisingly earnest sentiment."
https://www.newyorker.com/culture/culture-desk/how-cameo-blew-up-during-quarantine
"Porat is one of the rare corporate executives to have transcended the upper echelons of Wall Street to the highest ranks of Silicon Valley. While the scenery may be different, many of the challenges remain the same: navigating economic downturns, government investigations and regulatory hurdles. Of course, a global pandemic is a new obstacle.
“This environment is more challenging than anything I've seen because you're combining a health crisis with an economic crisis,” says Porat in her first-ever interview with Forbes from her home in Palo Alto, California. “The path forward is less certain.”
"Edward Tenner argues in Why Things Bite Back: Technology and the Revenge of Unintended Consequences that we often have to deal with “revenge effects.” Tenner coined this term to describe the ways in which technologies can solve one problem while creating additional worse problems, new types of problems, or shifting the harm elsewhere. In short, they bite back."
"Before we intervene in a system, assuming it can only improve things, we should be aware that our actions can do the opposite or do nothing at all. Our estimations of benefits are likely to be more realistic if we are skeptical at first."
https://fs.blog/2020/09/revenge-effects/
Try Worthix, they are an awesome alternative & addition to NPS.
"There are certainly some admirable benefits to measuring NPS. To (over-)simplify, tracking NPS:
-Enables a culture of customer obsession
-Helps you see (and address) unhappy customers before they churn
-Creates a conversation across teams/functions to spot and address problems
-Allows you to easily benchmark against peers on an ongoing basis
The problem: NPS does not equal retention
NPS doesn’t have mystical powers and it should not be exalted.
For starters, NPS doesn’t turn out to be very predictive of logo retention or net dollar retention rates across SaaS companies, according to new analysis of OpenView’s 2018 SaaS benchmarking data."
https://openviewpartners.com/blog/cant-we-do-better-than-nps#.X2ez1C2ZOu4
"Before COVID-19, office workers were geographically tethered to their offices, and it was mainly business travellers and the lucky few digital nomads who were able to take their work with them and travel while working. Since the start of the pandemic, many digital nomads had to work in a single location, and office workers have become remote workers – giving them a glimpse of the digital nomad lifestyle."
"The idea of tourist destinations touting themselves as workplaces is not new. Japanese technologist Tsugio Makimoto predicted the digital nomad phenomenon in 1997, decades before millennials Instagrammed themselves working remotely in Bali. He prophesied that the rise of remote working would force nation states “to compete for citizens”, and that digital nomadism would prompt “declines in materialism and nationalism”.
It’s a cool & fun place, fortunate to visit many years ago. Punta Del Este.
"Once known as “the Switzerland of South America”, because of its high quality of life and its former banking secrecy laws, Uruguay has now become its New Zealand.
Its population is only 66% the size of the Kiwi state, but both countries have seen fewer than 2,000 cases and coronavirus deaths in double digits. Thanks to a large testing and contact tracing program, most of Uruguay’s schools, restaurants and sports clubs have remained open throughout the pandemic.
In stark contrast, Uruguay’s neighbors, Argentina and Brazil, currently rank third and fourth worldwide in the daily number of reported new cases, according to WHO figures.
With its wide beaches, luxurious mansions and expensive nightclubs, Punta del Este has for decades been the summer home of South American millionaires – and a smattering of wealthy Europeans."
https://www.theguardian.com/world/2020/sep/20/uruguay-argentina-coronavirus-pandemic
One of the best summaries of VC Rolling Funds I've read.
"AngelList was smart to recognize that emerging venture brands are more often than not a direct reflection of the GP's personal brand.
Several Rolling Funds have launched successfully from managers that have built strong online and offline personal brands. Due to the power of branding online in venture, the product perfectly aligns with the 506c general solicitation rules that allow managers to leverage these same online channels to quickly and continually raise capital.
Currently, the Rolling funds I've seen and heard about have been mainly raised by those from the tech community, but I would not be surprised the product to be leveraged by strong personal brands in other industries (sports, film, media, etc.)."
https://ventureunlocked.substack.com/p/my-thoughts-on-the-rolling-fund-product
"So goes the talent, so goes the innovation. Without this wellspring of brainpower lodging itself in America’s top innovation hubs, where exactly do we think it will go? That former aspiring Stanford or MIT computer scientist with ideas in his or her brain isn’t just going to sit by the window gazing at the horizon waiting for the moment when they can enter the gilded halls of the U.S. of A. It’s the internet era, and they are just going to get started on their dreams wherever they are, using whatever tools and resources they have available to them.
All you have to do is look at the recent YC batches and realize that the future cohorts of great startups are going to increasingly come from outside the continental 48. Dozens of smart, brilliant entrepreneurs aren’t even trying to migrate, instead rightfully seeing their home markets as more open to innovation and technological progress than the vaunted superpower. The frontier is closed here, and it has moved elsewhere."
https://techcrunch.com/2020/09/20/gangster-capitalism-and-the-american-theft-of-chinese-innovation/
This is something I've been thinking about for a long time. Everyone needs to be working on this if they want to thrive in the future.
"You want to build a competitive advantage that will endure over time. You don’t want to build a competitive advantage that is fleeting or that will get commoditized. Some awards, for example, may have been impressive early on, but as they have expanded significantly they’ve become more diluted and thus no longer as impressive. You want to have skills and accomplishments that are undeniably valuable and indisputably impressive.
Some other hacks to build moats include picking something that isn’t big now, but will be in the future (e.g. crypto in 2016), something that relies on exclusive relationships that you can access (e.g. enterprise healthcare, access to LPs), or something that is legibly impressive or valuable but has no playbook. (e.g. Tyler Cowen, Tim Ferris, Elad Gil examples)
If you were magically given 10,000 hours to be amazing at something, what would it be? The more clarity you have on this response, the better off you’ll be."
https://eriktorenberg.substack.com/p/build-personal-moats
"According to Cal Newport, professor at Georgetown University, four hours of deep work is what we can muster on average daily, the rest is for shallow work that is not as demanding (or in my opinion rarely needed).
Deep work compounds over time, create meaning and new opportunities. Deep work is when nothing else matters than your current focus. It takes self-discipline to do deep work, to shut down the outside world, and focus on the inside.
Deep work is being emerged in the moment, creating something with passion and purpose, like writing a book or designing and renovating a new kitchen."
https://mailchi.mp/65a53f76b09d/fewer-better-things-no-9380108?e=f5dfcce6c6
Watch this space: Semiconductors. Critical for technology sector & Geopolitics as whole.
https://aishwaryanagarajan.substack.com/p/my-semiconductor-conspiracy-theories
"And that, I think, reveals the real principle behind the rule. What’s important in Silicon Valley isn’t quite what’s true right now. It’s a different kind of truth; less about factual truth and more about authenticity. That's why the blessing that VCs grant founders is so important: it's a power, but also an acknowledgement of the burden of authenticity that founders have to carry.
It's not so different from the Kayfabe bargain between pro wrestlers and the crowd. Founders will present you with something pre-true, under the total insistence that it's really true; and in exchange, everyone around them will experience the genuine emotion necessary to make the project real. Neither party acknowledges the bargain, or else the magic is ruined.
That bargain, as subtle and as powerful as it might be, only works when it’s in the dark. Shining light on it makes it stop working. And that’s why the taboo around asking, are founders always supposed to tell the literal truth, is such an important social convention. Of course, I’m not in VC anymore, so I can say it. But be careful if you want to talk about it, too. It’s like the game where very time you think about the game, you lose."
https://danco.substack.com/p/are-founders-allowed-to-lie
This is the future of work and I call it the Multi-hyphen world. Writing about this too.
“Could I, as an architect, work on multiple projects at once? Perhaps at different stages? That require different amounts of my attention?”
The answer, it turns out, was not only “yes” but that it was actually professionally prudent to do so. To have multiple clients and bets. The geographic, spatial distance created this question… and smart architects created the precedent that became the convention that has now become the obvious answer (yes).
With the world being thrown into a distributed work-style with Covid-19 two months ago, where every company and executive in the world became more remote than ever before in a 4 week span (!)… My hunch is that the age of remote work will be a catalyst in introducing this freedom of asking this question and the smart executives creating the precedent that will then become the norm. In other words, the catalyst to asking this question and having thoughtful, fundamental answers in the separation of your physical work from other’s physical work.
I use the term catalyst because it’s already happening in pockets. And I think it’s about to go mainstream in the next decade."
https://jjbeshara.com/2020/05/25/the-multi-path-career/
"Near term changes don’t matter if the money printer is on. It means that all companies should be looked at in terms of 2023-2025. Interest rates are going to be 0 for the next 3 years (as already announced) so the real value of money will show up in three years (putting us into 2023 and beyond). Therefore instead of worrying about “cash flows” for the next couple of years, we have to worry about “who is actually going to be around” in 2023-2025? This is a big change in thinking and also explains why ultra-high technology firms are seeing significant increases in valuations/multiples.
For those that want the “gist” you want to take all your cash & buy anything that is scarce/useful & anything extremely high tech that will be used in 3-5 years. The only cash you should have is enough for emergencies at this point since we’ve gone full crazy with the money printing.
.....the simple way to phrase it is you should look at your physical cash & say “This is worthless”. While it is an extreme view, the point is clear. Unless you’re using it to purchase productive assets there is no point in having money in your pocket or under a mattress or in a bank earning 0% (no different than parked under a mattress at 0%). Being responsible is no longer encouraged."
https://wallstreetplayboys.com/the-future-of-money-and-how-to-use-it/
Sutter Hill, the quiet incubation giant. Crazy good returns.
"another, and more important way to judge VC firms is by the value they add above replacement to their portfolio companies. How much do they help their portfolio companies increase their likelihood and magnitude of success? Firms do this most notably by providing capital, but also by other methods like lending their brand or directly helping with operations.
For founders, this value added is what matters. The returns of a VC firm only matter to a startup insofar as they translate into improved brand, network, or access to capital for the startup.
Similarly, Speiser is likely to have more experience in setting up companies and the initial customer development process than the founders will. Perhaps most importantly, he has relationships with customers and an established reputation that can be used to bootstrap the initial pilot conversations, which may be the point of highest leverage for these new startups.
These advantages all compound with every incremental company Speiser originates, and not just because of the typical brand network effects that venture has broadly. In many tangible ways, the spread between Speiser’s process knowledge relative to a new founder should widen with every new company."
https://kwokchain.com/2020/09/22/the-mike-speiser-incubation-playbook/
Two negatives add to more negative not positive. Woke movement meets Influencer....BARF!
"The Wokefluencer isn’t necessarily a new phenomenon. Stephens points out even before social media, alternative spring break gave a certain stripe of (usually white, usually well-off) college students an opportunity to flex their capacity for empathy. These students would return from their trips with photographs of themselves with needy children or in disaster zones as souvenirs. The difference now is how easy it is now for influencers to dip into a protest or a locked-up mail drop and scrape some of that valor for themselves. “The stakes are much lower,” Stephens says."
"If influencers are struggling to meet this moment—and they are!—it is because of the way the moment transcends social media. Instagram is essentially designed to let each user become the subject of any setting, any occurrence, or any calamity.......In 2020, the influencer then has met their match: a moment that can’t be flattened into a photograph."
https://www.gq.com/story/woke-influencers-2020
This is valuable data on "K" shaped recovery. Rich get richer, poor get poorer. America will be getting in "Revolution" territory if this continues. Not good.
"First, it is obvious that high-wage worker employment has basically recovered to pre-COVID levels, but low-wage workers are still suffering significantly."
https://pomp.substack.com/p/the-k-shaped-recovery-is-now-undeniable
It's about time some of the airlines are trying some of this. As testing gets cheaper and easier, I expect this will just become standard & bundled into the price of airplane tickets.
The Democratic Party is broken. So is the Republican Party (maybe more so). It's now voting for the lesser of evils. Politics in 2020.
"The source of this tension: Hoffman’s team thought the Democratic Party was fundamentally broken and in need of well-financed disruption. So he and the donors in his orbit began pushing the envelope and funding risky and unorthodox projects, making mistakes and enemies along the way.
Hoffman has grown to symbolize a bigger debate over whether this Silicon Valley disruptive style has any place in politics. And so the election this fall will offer one answer. If Biden wins, Hoffman is poised to emerge as one of the sages of Silicon Valley’s new political moment. But if Biden loses, it’s not hard to imagine a world in which Hoffman becomes the political poster child for Silicon Valley disruption gone awry, a billionaire who ticked off too many and accomplished too little."
Always wanted to visit Panama. Although I still tend to favor Georgia/Taiwan/Portugal/Ukraine as my bases personally.
Such a huge fan of Richard Koch. His book "The 80/20 Principle" changed my life. This was a great interview.
https://tim.blog/2020/09/22/richard-koch/
Taiwan is critical to the USA. I hope selfishly there is better alignment on policy soon against China's aggression.
"America’s ambiguous posture toward defending Taiwan is decades old, and embracing our recommendations would upset the status quo. However, strategic clarity cuts both ways, and neither American policymakers nor Taiwanese voters can afford to delude themselves into acting like China is a paper tiger that will fold at the first sign of resistance.
Deterrence is costly and talk is cheap. If Washington truly believes that it is in America’s national interest to deter China from attacking Taiwan, Washington should also be willing to pay the price — and assume the risks — associated with credibly enhancing Taiwan’s deterrence posture. Arms sales are only the first step toward this end. The next steps — implementing defense reforms, reinstating military conscription, and holding bilateral training exercises — will be harder.
U.S.-Taiwanese relations are changing, but change takes time. Time, unfortunately, is not necessarily something Taiwan has in abundance."
Fully agree with this. Every successful person I know has mentors.
"we should be shouting: WE ALL NEED MENTORS. Not just one but a tribe of them with a range of achievements, skills, and experiences.
A mentor is simply an experienced and trusted advisor. They instill confidence. They inspire. They share stories. They providing a sounding board. They open their network. They help us see around corners. They push us. They lift us up when we're down. They recommend books. They provide input. They accelerate our learning and development. They make us better. They genuinely care about us.
Who doesn't want or need that?"
"But capitalism also produces large wealth gaps that produce opportunity gaps, which threaten the system in the ways we are seeing now. Wealth gaps give unfair advantages to the children of rich people because they get a better education, which undermines the equal opportunity notion. As the number of people who get equal opportunity diminishes, this reduces the possibility of finding talented people in that population, which isn’t fair and undermines productivity. Then the have-nots want to tear down the capitalist system at a time of bad economic conditions. That dynamic has always existed in history and it’s happening now.
So, capitalism and capitalists are good at increasing and producing productivity to increase the size of the economic pie, but they’re not good at dividing the economic opportunity pie. Socialists are generally not good at increasing productivity and the size of the economic opportunity pie, but they are better at dividing the pie."
"We now have too much emphasis on distributing wealth and getting it from producing debt and printing money, and not enough from increasing productivity."
Really neat story. Surfing in Yemen.
It's true. Great mentors can be found anywhere. Invaluable too.
https://davidcummings.org/2020/09/26/find-your-digital-mentors/
Fintech on the rise. Covid beneficiary.
“Consumer fintech adoption was already strong prepandemic, especially among the 20s to early-40s age group,” says Victoria Treyger, a general partner who leads fintech investing at Felicis Ventures. “The pandemic has become a growth rocket, fueling the rapid acceleration of adoption across all age groups, including 40- to 60-year-olds.”
Several Covid-driven developments are helping specific types of fintech players. For example, consumers’ shift to more online spending and delivery services is a boon to certain companies powering payments."
This is really cool. I miss surfing in the tropics! I just miss the tropics period.
https://www.youtube.com/watch?v=OOVGQdaToaE
The Malloy brothers: polyglot surfing adventurers who do this in remote areas.
The Importance of Personal Brand in VC: How the “Media Company of One” will be the New Standard
Harry Stebbings is probably the best and most recent example of this. What a story: an 18 year old from England uses his podcast to meet & interview some of the best VCs in the business. He built a network and a real podcast business as a launchpad business and started a VC firm (Stride VC) in 2018 and then more recently on the side, Micro VC fund of 8.3M with some of the best VC & angels in Silicon Valley.
“20VC’s tie to the name of the podcast is intentional. The podcast has developed a brand of its own in the world of tech, with some 200,000 subscribers and 80 million downloads to date of the twice-weekly program. And 20VC isn’t just trading on Stebbings’ own experience as an entrepreneur: it has tapped the network of people that have been on the show, or know him because of the show, to assemble LPs.
There are some 64 of them in all, including founders and current and former execs from Atlassian, Yammer (David Sacks), Plaid (William Hockney), Superhuman, Airtable, Calm, Cazoo, Zenly, Alan, Spotify (Shakil Khan) and Tray.io; GPs from Kleiner (Mamoon Hamid), Social Capital (Chamath), Thrive (Josh Kushner & Miles Grimshaw), Atomic, Founders Fund (Brian Singerman), Coatue, Index (Danny Rimer), True Ventures (Phil Black) and Beezer Clarkson, among many others. Having a popular podcast that highlights interesting investors and startups turns out to be a good way of networking to build a fund. Stebbings said that the call out was oversubscribed three times over within four weeks.’
Pretty impressive accomplishment and shows the approach of building an audience first. Or the “media company of one” approach. But if you go back into VC history, this is actually a pretty well paved path to building a personal brand in VC & Angel investing.
Mark Suster, Fred Wilson, Brad Feld, Paul Graham are very representative of the Blogging era of the early 2000s. Andrew Chen was a longtime blogger on growth before he became a VC.
Jason Calcanis (Launch Conference & This Day in Startups Podcast) & Jason Lemkin (Quora/Saastr/Blogging/Conference) have done an amazing job using Social media and building Conferences as a platform.
Semil Shah (Blogging & Twitter), Leo Polovets (Blogging & Twitter), Hunter Walk (Blogging & Twitter), Brianne Kimmel (Blogging & Twitter) are representatives of VCs using social media to build out their network and brand.
In more recent times, we’re seeing investors build strong followings either via social media, podcasts and Substack newsletters like Anthony Pompliano (Twitter & Podcast), Erik Torenberg (Twitter & Podcast), Li Jin (Twitter and Blogging).
Who can forget my dear friend and ex-colleague Sheel Mohnot on Twitter and as the “Zoom Bachelor” who also ended up on Justin Bieber’s music video. (that last bit is incidental but effective).
The Importance of Personal Brand in early stage Venture Capital
Having a personal brand this day in age is important whatever role/position/industry you are in.
I think this has become even more important for investors doing investments especially in the stages up to the series A venture capital. As great as the brand names are, the best founders would rather take money from a specific Partner at the firm. They optimize for it over the firm’s brand name.
Obviously the best case is for both a top brand firm and top specific partner, but we know that is not always the case. I know of founders who have given up an offer from top tier Sequoia Capital to go with another better suited Investment Partner at another firm.
And frankly there are so many great investors out there. With 1000+ pre-seed and Seed funds, maybe at least 100 Series A VC funds that would be considered top tier, founders have a plethora of choices. Top founders have their pick of who they let invest into their company. So i think it’s become incumbent on investment partners at firms to really stand out & build their own brand. This is how you get great deal flow.
And also understanding VC Fund politics, it’s not a bad idea to have your own brand and following. It gives you optionality: go join another firm, start your own or even just be a “Solo Capitalist.”
There are so many successful examples of “Media Company of One” model for up and coming VCs. Yet like many things in life, it looks very simple but it really takes a lot of time & work.
BUT this will become the standard path for the savvy future venture capitalists, if it isn’t already.
Work like a Lion, not like a Cow
This is something I've pondered since I heard it from my friend Shaan Puri a few weeks ago. (attributed to Naval Ravikant)
“The way people tend to work most effectively, especially in knowledge work, is to sprint as hard as they can while they feel inspired to work, and then rest. They take long breaks.
It’s more like a lion hunting and less like a marathoner running. You sprint and then you rest. You reassess and then you try again. You end up building a marathon of sprints.
Don’t work like a cow grazing on the field all day. “People who say they work 80-hour weeks, or even 120-hour weeks, often are just status signaling. It’s showing off. Nobody really works 80 to 120 hours a week at high output, with mental clarity. Your brain breaks down. You won’t have good ideas.”
Source: https://nav.al/work-hard
I think about my time as a manager. I reflect on what many of my founders do and how they manage their teams. Most folks are operating under the legacy of industrial times. Where they equate hard work to showing up on time or working late & being around. Basically grinding like a factory worker, where hours equate to the number of widgets you make.
I’m not saying you don’t need to grind and spend a lot of time on work, especially in the very early stage of startups. There is just so much work to do in this situation.
But most creative work requires thinking, generating ideas and getting insights. The way you do this is from reading a lot, talking with people, resting, relaxing and thinking. Even walking in nature (there are a lot of studies out there showing that this does lead to better ideas). Also no surprise that many people get their best ideas in the shower. It’s warm, relaxing and you can let your subconscious mind work freely.
As naval previously said, grinding like a factory worker when you are tired probably does not lead to any breakthroughs or insights. The author Cal Newport states most people are limited to 4 hours of intense thinking each day, also known as “Deep work”.
Morgan Housel wrote in 2016 (i just found it as i was writing this. It’s so good).
“If you anchor to the old world where good work meant physical action, it’s hard to wrap your head around the idea that the most productive use of a knowledge-worker’s time could be sitting on a couch thinking. But it’s so clear that it is. Good ideas rarely come in meetings, or even at your desk. They come to you in the shower. On a walk. On your commute, or hanging out on the weekend. I’m always amazed at the number of famous ideas that came to people in the bathtub. But tell your boss you require a mid-day soak, and the response is entirely predictable.
Look at famous thinkers who didn’t have to impress anyone by looking busy, and you see a theme: They spent a lot of time doing stuff that didn’t look like work, but in fact was stupendously productive.
I think we are in the transition of a working world where inputs are measured (time spent etc) to a working world of “outputs”. Where the focus is on what you have actually done. A focus on “Real results” not on the time spent. We should be rejoicing about this. This inversion of thinking helps you add more leverage in your life. And you should stop feeling guilty when you are not working all the time.
The reality of being a creative worker this day and age is you are working when you aren’t working. When you read that random science fiction or fiction book. When you are cutting up vegetables for dinner or doodling on a piece of paper. When you are going for a walk with your partner. When you are chatting with a friend on the phone or zoom. When you are taking a nap. When you do all these things, YOU ARE doing real creative work. Let’s not forget this if we are to thrive in the future world of work.
SPAC Attack
There has been a big tidal wave recently. In the first half of 2020, there have been 48 SPAC IPOs completed, with almost $18 billion raised in proceeds. There is another $5.4 billion of SPACs on file to complete IPOs this year.
After Chamath Palihapitiya’s (of Social Capital fame) move with Virgin Galactic, now you see top tech players like Kevin Hartz, Reid Hoffman, Marc Pincus & hedge fund giant Bill Ackman jumping on this trend too.
What is a SPAC aka Special Purpose Acquisition Company?
A SPAC is a blank-check company that raises capital from investors through an IPO for the purpose of finding a private company to acquire. It is basically a new path for tech companies to go public that could compete with the present day ugly IPO process, and win.
Investors get both warrants and common stock, and a set period to find a target, which is usually 2 years. Additionally once this money is raised, the manager can take up to 20% of equity interest.
But this is the trade off for faster time to the public market. The benefit is you are able to get the money quickly and with more certainty versus the traditional IPO method. Also in the new SPAC 3.0, the financial structures tend to be cleaner. Basically they do not have too many weird terms, like it used to be in the 80s & 90s when it was the financing of last resort.
Why are SPACs happening?
The answer is pure supply and demand.
On the supply side there are just a lot less publicly traded companies. In 1996 there used to be 7322 listed companies. In 2017, there were only 3671 publicly listed companies.
So for example in the Mid-70s, there were on average 280 Initial Public Offerings (IPOs) per year. Fast forward now it’s about 115 IPOS. One reason for this beside a higher bar for going Public, the most common exits for Private Equity and VC funded companies used to be IPOs. Now they are acquired either by strategics or financial players.
Add on top of this the massive wave of $$ that has come into public equities from investors from all over. Basically a massive way of demand which has driven the US Stock market’s total valuation to $38 trillion dollars. Yes, trillion with a “T.” (for tech folks, there is $480B invested in Venture Capital as asset class)
From a company perspective why do it? Why not go the IPO route?
Well, IPOs are bloody expensive as it could be up to 3-7% of the proceeds. There are also lots of regulatory hurdles. There is a big time element, a normal IPO process could also take more than a full year. It’s been shown how much $$ companies spend to go public.
Also how much $$ is left on table because of gross and systematic underpricing and un-aligned incentive structures with Wall Street i-Banks. Just look at the crazy spikes of the share price on day one. That means the IPO has been underpriced and that money has been left on the table for the company.
SPACs are happening because it can be a way better deal for founders. Yes, you have to give up 20% “promote” of the shares in the SPAC but at least you are better aligned on long term incentives.
What are considerations a founder needs to keep in mind when choosing a SPAC?
Your partner leading the SPAC ideally needs to have deep operational experience & credibility with public markets. As Alex Danco says “SPACs are highly centred around the cult of personality of the sponsor.” That is why I mentioned heavy hitters in the tech market like Reid Hoffman, Kevin Hartz, Marc Pincus and Bill Ackman previously.
When to do it?
$50M in revenue and high growth, like a series D. It’s a new and very feasible exit as well for founders and Venture capitalists. Queue the most recent SPAC, Opendoor for example.
I’m quite interested in this movement and think this is the one of the most promising new developments in the capital markets. As Marc Pincus describes:
“SPACs as “venture at scale,” letting companies go public in close partnership with experienced growth investors. The “scale” comes from SPAC founders pushing the companies they merge with to maintain a venture mind-set even after they list. “There’s an interesting entry point into a company at the point they’re going public,” Mr. Pincus said, “to help them think, ‘How do you go from $1 billion to $10 billion in revenues? How do you 10X and 100X your business long after you’re public?’”
There is a lot to like about SPACs and a very big difference from the sketchy investment vehicles they were decades ago. This is the future and think they are here to stay. Founders and investors rejoice!
Marvin’s Best Weekly Reads September 20th, 2020
“Life is either a daring adventure or nothing at all.”--Helen Keller
Classic. When this pandemic is over I'm going to travel like mad. I'm going to visit every EDM festival I've ever wanted to go to and visit all the places I've wanted to go to. And return to all the places I miss.
https://www.youtube.com/watch?v=WxfZkMm3wcg
"Rather than breaking even, almost two thirds of financings lost money in the past decade and less than 4% produced 10X or greater returns. Despite the historic market we’ve had in the past ten years and the huge deals often highlighted in the press, venture capital returns haven’t shifted much.
It’s as difficult today to find big winners as it was ten years ago and it remains just as important to find those deals if VC firms and their partners are to stay successful."
Chrissy Teigen is a funny and cool lady.
"The 34-year-old has a full plate running two companies: Cravings by Chrissy Teigen—her lifestyle brand with a cookware and tabletop line at Target and Macy’s, a blog with videos and recipes, and two best-selling cookbooks—and Suit & Thai Productions, her production company, which has a first-look deal with Hulu (including an upcoming show with the working title Family Style, cohosted with David Chang) and the second season of Quibi series Chrissy’s Court with her mom, Pepper. After helping her mom with her Thai cookbook all quarantine, Teigen will tackle Cravings 3, which she describes as “how I eat now: brighter and healthier.”
But, most important, it’s the cookbook she’s having the most fun working on. “While writing the first, I was pregnant, and for the second I was deep in postpartum depression. I’m having a good time, and my confidence has grown. I fully embrace carbs now—like, putting sweet-potato spread on a baguette. A year ago, I would have said you can’t put a starch on bread; now I’m like, who cares? There are no rules.”
https://www.marieclaire.com/celebrity/a33864570/chrissy-teigen-interview-2020/
Good tips here for venture investors. I agree with most of them.
https://www.saastr.com/11-signs-to-tell-if-a-venture-investment-will-or-wont-work-out/
Talk about a shady grifter.
"Oancea is not your typical memorabilia collector. Vegas Dave, as he’s known to his millions of followers on social media, is a notorious gambling influencer, known for selling picks on which team will win a given game. Vegas Dave says he’s the best “sports information consultant” in the world, but if you dig into his past and his picks you’ll find a shady hustler who sells a service that has little, if any, value for his customers."
Love Netflix. Not sure I'd work there but they get results.
"I’ve read many CEO pontification books, and I always wonder what it’s really like in the middle of that organization. I’m always skeptical. That’s why we hired Erin Meyer, who was a business school professor first, [to co-write the book] and come in and interview hundreds of Netflix employees confidentially and then do the point/counterpoint — me pontificating, and then her doing the reality check.
It doesn’t make Netflix out to be perfect. There’s still plenty of issues. But it’s very real in that way. Our big media competitors are not going to be able to take advantage of [the lessons in the book] because they’re too well established… It’s not like some great trade secret and then they’re all going to adapt to it. It’s the younger firms that will."
We've all been here. Some of us get out.
"Show up, do good work and everything would be fine. I worked about 60+ hours per week plus commuting. Work was measured in time spent and perceived value.
The productivity gains I achieved turned into more work as I climbed the ladder. Becoming better resulted in doing more. All my energy went into being a well-greased cog in someone else’s machinery.
On the outside I had ”made it” but on the inside, my soul was quietly screaming in agony. The rewards and benefits started to pale in the light of living someone else’s life. Did I really want all these things and more? Was it worth trading my life for gold?"
https://mailchi.mp/6731318ffbad/fewer-better-things-no-9377732?e=f5dfcce6c6
"While Hollywood measures people’s offices by their totems and grandeur, the analytical Hastings, a Silicon Valley interloper, values functionality over trappings.
Netflix currently functions, by any measure, at a world-class level. As the year of the pandemic upends entertainment companies—Disney’s crippled theme parks, Warner Bros.’ furloughed blockbusters, AMC’s shuttered theaters—Netflix is having a moment.A moment of prestige, with a record 160 Emmy Award nominations, eclipsing the long-dominant HBO, and more Oscar nods than any other media company.
A moment of influence, adding almost as many customers in the first six months of the year as in all of 2019, extending its reach to nearly 200 million subscribers in 190 countries. And a moment of profits, with sales up 25% year over year, earnings more than doubled and its stock up 50 percent, as most of the market gyrates wildly just to scratch back to even. Recent market cap: $213.3 billion."
This is pretty neat.
"The surrounding lands of the Svalbard archipelago are sparse and desolate. It is a place where there is a 1:10 polar bear to human ratio, where the sun doesn’t rise for 4 months per year, and the northern lights dance across the sky.
But on the side of a mountain in Spitsbergen, there’s an abandoned coal mine. And inside — some 250 meters below the Earth’s surface — you’ll find a steel vault that contains an archive of film encoded with hundreds of thousands of open-source projects from around the world.
Run by a for-profit company called Piql, the Arctic World Archive is aiming to preserve the world’s digital materials — music, literature, and lines of code — for 500+ years.
Recently, Github, an open-source coding platform, donated it’s entire trove of code to the archive — some 21 terabytes of data posted by millions of users since 2008.
Most press accounts have dubbed the Arctic World Archive a “doomsday vault.” The archive prefers the term “vault of hope.”
Either way, it’s an effort to incubate our data from human and environmental catastrophes in the long-term. And it may just be our best shot at telegraphing our present-day story to future generations."
https://thehustle.co/arctic-world-archive-svalbard
"The Peloton founder understands the power of software/SaaS to drive return on investment and not surprisingly is focused on that part of his business.
You may be asking at this point: “Why is Peloton making hardware at all if software/SaaS is so valuable? The one-word answer to this question is: distribution. No one is making low cost exercise bike or treadmill “clones” or “blanks” that Peloton can rely on. Bill Gurley described how hardware in some cases can be important for distribution in his 2003 essay: “Software in a Box” which today might be called “SaaS plus a Box.”
https://25iq.com/2018/03/10/peloton-the-saas-plus-a-box-business-case/
Fascinating and absolutely critical in America in 2020.
https://story.californiasunday.com/mail-in-ballots-election
We need more of this.
"Andrew is a partner at Tiny where he starts, buys, and invests in internet businesses. Over the last few years he’s built it into a thriving collection of companies — over 30 with about 600 employees collectively.
What Andrew has built is fascinating because he’s turned himself into a people router. He takes people who arrive in his inbox, and gets to decide where in the Tiny machine to put them. If he does that job well the machine will grow — like magic.
His job is to turn people into opportunities.
But here’s the conflict: even though his job is all about people, he doesn’t like to be on phone with them too often. He only likes to do 2-3 meetings a day — which is surprisingly few for a guy with 600 employees.
That’s where the templates with a hundred different polite ways to say, “No” come from.
But this habit of saying no spreads beyond his inbox. He’s really set up his whole life by saying no. He’s said no to venture capital, he’s said no to living in Silicon Valley, and at his company he’s used delegation to say no to anything that will require him to do work that he doesn’t want to do.
In short, he’s said no to anything that doesn’t fit into his vision of success — and it’s working pretty well."
https://superorganizers.substack.com/p/the-ceo-of-no
All sadly true. Great write up from my friend Pierre. I wish i wrote this!
"Reality Check — There are no ‘mentor’ rules of engagement or code of conduct. Anyone can self-label and become a mentor and there is no litmus test or ‘Start-up’ Angel network to ensure how legitimate a mentor is. Even more troubling, for a lousy mentor, there are no consequences — despite leaving a trail of destruction in their wake.
The reality is that many mentors are charlatans, in it for themselves, and operating a fraud."
https://pierregaubil.substack.com/p/mentoring-sucks
"Mencius, the “second sage” of Confucianism, is believed to have said, “In abundance, prepare for scarcity.” While the philosopher was likely hammering the importance of foresight, if viewed with a squint, read more as koan than dictum, it feels particularly suited to our current era. In our age of tech-endowed abundance, we must still prepare for scarcity. We just need to invent it.
This is an old game. In precious stones, new pharmaceuticals, patents, copyright law, the planned obsolescence of devices, we see the hand of invented or artificial scarcity, dearths created to preserve certain products’ value.
In some, but not all cases, scarcity impacts our sense of status. It is not that “cool” to own a patent, but owning a large diamond may be. The object made scarce influences status earned."
https://thegeneralist.substack.com/p/scarcity-as-an-api
What an interesting accomplished man. I hope this works and he is able to distribute this soon.
I'm still bullish on long run for SF & other big metropolitan areas. Narrative on long term decline here is wrong. (altho SF is really poorly run though).
"Viewed from a macro level, then, cities that achieved near-cartoonish levels of desirability may simply be lurching uncomfortably into the next phase of an eternal boom-and-bust cycle.
Hamalian, however, remains bullish on their enduring desirability as places to live, work, and play.
“I grapple with the theme … that this could be the death of cities, the fear-mongering you hear thrown out there,” he says. “I try to check myself.
Our love affair with cities has waxed and waned many times over throughout history. We fall in love with them and grow to view them as too dangerous, too crowded, too dangerous, the schools aren’t good, whatever it may be that people use as for why cities are going to die and then they flee – and then they make their way back.”
"This is the era of no good choices. Take schooling, for example. Keeping children home robs them of education and socialization. It scars their futures, steals their joys. It makes it impossible for their parents to work, or even to rest. But sending them to school endangers their health, and that of their teachers and their families. The argument is so heated because the choices are all bad, at least by the standards of the lives we used to lead.
"In America, our ideological conflicts are often understood as the tension between individual freedoms and collective actions. The failure of our pandemic response policy exposes the falseness of that frame. In the absence of effective state action, we, as individuals, find ourselves in prisons of risk, our every movement stalked by disease. We are anything but free; our only liberty is to choose among a menu of awful options.
And faced with terrible choices, we are turning on each other, polarizing against one another. YouTube conspiracies and social media shaming are becoming our salves, the way we wrest a modicum of individual control over a crisis that has overwhelmed us as a collective."
https://www.vox.com/21432760/coronavirus-2020-trump-government-response-covid-19-biden-america
"if you’re serious about getting rich you should always choose to work from home at slightly reduced pay. Why? This gives you more than enough time to work on your side projects. While you will likely lose some career progression (office politics), the upside of equity in your own business is 1,000x more valuable. It isn’t even close."
"Are you excited? You should be. 1) better quality of life, 2) more autonomy, 3) more performance based work, 4) easier to control your schedule, 5) ability to cross state lines, 6) ability to maintain better tax structures and 7) significant long-term reduction in office politics if you’re in that position at this time. If we wanted to be ultra competitive about it, we’d highlight loss of competition as a lot of people have to start over but that’s over the top (it is a true statement, many smart people got wiped out). If you thought it was easy to get ahead in 2010 to 2020… Wait till you see 2020-2030."
https://wallstreetplayboys.com/looking-at-the-bright-side-of-the-lock-down/
Color me VERY skeptical. Feels like everyone literally everyone has a VC fund.
But they have some great LPs so what do I know. #PeakVC
So much to admire here from the founder of Duty Free Shoppers & Private Equity giant General Atlantic. Very impressive human being.
"Over the last four decades, Feeney has donated more than $8 billion to charities, universities and foundations worldwide through his foundation, the Atlantic Philanthropies. When I first met him in 2012, he estimated he had set aside about $2 million for his and his wife's retirement.
In other words, he's given away 375,000% more money than his current net worth. And he gave it away anonymously. While many wealthy philanthropists enlist an army of publicists to trumpet their donations, Feeney went to great lengths to keep his gifts secret. Because of his clandestine, globe-trotting philanthropy campaign, Forbes called him the James Bond of Philanthropy."
2 Interesting observations in the latest rant by Prof Galloway.
"The Uncola of a sector gains relevance around the time everyone throws in the towel, all new entrants mimic the leader, and the sector has the variance of your Dockers-wearing dad. The most innovative Uncola of the last decade is Shopify, who became the non-Amazon Amazon. Shopify taps into a reservoir of ill will from third-party retailers, who were forced to surrender data, custody of the consumer, and merchandising options so they could access the largest ecommerce platform in history."
"The analytics firm is attempting to position itself as the “Uncola,” the non-tech tech firm. A more apt metaphor is Zima. Palantir is all of the calories of Facebook (scaled sociopathy) with none of the great taste (profits)."
Totally agree here.
“If anyone says that they have predictive power in this industry and says they know where the future is gonna be, I just question the wisdom of this,” he said during a session exploring how VCs seek out new markets before they even exist. “Because if you could figure it out, you could come up with the idea, you’re capable enough to be able to put all the pieces together, why would you not found the business?”
Instead, the key to betting on the future is to learn to ask the stupid questions. “I think it’s actually perfectly fine in the venture industry to not be the smart person and to kind of train yourself to be stupid and ask the stupid questions,” said Kanji. “I think a lot of people are probably too shy to do that. And a lot of people [are] probably too risk averse to then write the check when they don’t really understand exactly what it is that they’re investing into. But a lot of this stuff is a light bulb moment.”
This is an excellent guide to making your company remote.
https://davidcummings.org/2020/09/19/5-remote-first-principles-from-brex/
"If you want to build a following online you can later convert into customers or advocates for a cause, you need a body of work.
Build first, flex later.
Because anyone can say anything. It’s what you’ve accomplished or survived in their life that gives it significance."
https://edlatimore.com/personal-branding-examples/
Never was a big fan of fish sticks but ate them a lot growing up. Fascinating story.
https://thehustle.co/how-marketers-convinced-america-to-eat-fish-sticks
Silicon Valley Companies should NOT be Role Models for Management Systems
It seems many companies these days use Google or Facebook or whatever well known Tech Giant as a model. I think this is a huge mistake. For most of the FAANG businesses, they tend to be Outlier businesses whose situations are not applicable to most companies.
They have Structural advantages and many tech markets are natural monopolies. They have tremendous moats which could be technical, distribution or whatever. As high margin software driven businesses with an excess of 40+ percent (usually more), they end up throwing off a lot of cash. This is why they end up with higher margin of error, an ability to try more things and have more products fail until they get things right.
In fact, if you want to learn more on good management, do that from companies in low margin businesses that have a lot of complexity, higher cost structures, ie. thin margins. Ie. the very challenging Airlines or retail businesses.
This is why I posit that out of Big 5, Amazon is the best managed organization. They have built an amazing business despite the complexity of their business (different business lines that also include extensive offline operations) and razor thin margins in the beginning. They are also in highly competitive sectors (retail, groceries etc.). I should also note that Amazon Web Services is a massive cash flow business that helps subsidize their other lines of business although it was started 2006, 12 years after Amazon began.
Markets matter a lot. Even if a company is poorly run, they may still succeed in a massive fast growing market despite themselves. High growth also leads Peter Principle at higher velocity. Growth hides a lot, including crappy managers. Especially as many founders mistakenly think they are the next Steve Jobs, acting & managing like jerks but without his talent. AGAIN growth hides a lot. Until it doesn’t but this can take a long time before it shows up.
Most Silicon Valley companies, even the famous ones are grossly mismanaged. Just pick any well known later stage startup or Big tech company and check their Glassdoor reviews. My point should become very clear.
Remember: An amazing business model and growth covers up a lot, so be careful who you make as your management role model.
Why Career Promiscuity Is Important in Silicon Valley
As i wrote before, the average job tenure in Silicon Valley is about 2 years. Normally that could be argued is a bad thing. But on the positive side, this is the reason that we have so many amazing & successful companies. This talent ends up bringing and sharing new best practices, networks and expertise to the next generation of blooming startups. We see the widespread distribution of expertise and learning across an entire ecosystem.
I believe that this is one of the reasons that Boston as an ecosystem during the 70s & 80s fell VERY far behind Silicon Valley despite being neck and neck when it came to talent, great tech companies (Wang, DEC), elite higher education institutes like MIT & Harvard among others. Massachusetts enforced non-compete contracts, while California did not. Hence this led to a flowering of the tech industry here in the San Francisco Bay Area where talent moved from company to company to company. Almost like Bees buzzing around spreading their pollen.
One example would be B2B Sales, Best practices from one of the giants like Oracle, were adopted by Salesforce. Salesforce refugees then fled to the next generation of B2B Giants and re-deployed & iterated on playbooks and best practices.
I can attest that Facebook and Google are full of ex-Yahoo! Engineers, Sales & Marketing people. Airbnb & Uber are full of ex-Googlers and Facebook people. And now we have seen more of these folks spawning out into new fast growing companies. I anticipate there will be some amazing companies coming out of Coinbase alumni. We even see this in Venture Capital as talent spins out of established VC funds to start their own new investment firm. It’s like a continuous Cambrian explosion of learning, new playbooks and talent development.
This is why clusters are important for any industry. You need this mixing. And this is why I continue to be bullish on Silicon Valley in the near 5-10 year horizon.
Marvin’s Best Weekly Reads September 13th, 2020
“Unless there is opposing wind, a kite cannot rise.”--Chinese saying
This is very much worth reading if you are a SaaS founder looking to scale your business. Lots of good frameworks for thinking thru growth.
The key misconception of B2B SaaS growth
This is absolutely fascinating. Love these profiles.
"The ASO is incredibly secretive about its finances. But over the years, researchers and French journalists have managed to piece together bits of data from public filings.
Sources The Hustle spoke with estimate the Tour’s revenue to be somewhere between $60m and $150m per year — about 50% of the ASO’s total annual income. Based on historical revenue data, the ASO has ~21% profit margin. So, a very rough estimate would be that the organization enjoys a $12m to $30m annual profit from the race.
“The Tour de France exists to make money,” says Jean-François Mignot, a demographer who has studied the economics of cycling. “It’s a commercial race, and it’s owned by people whose main goal is to make money off of it.”
But the organizer is only one moving part of the Tour de France: a second thriving economy has been built around the teams and riders who compete there."
The economics of the Tour de France
I like this term. Micropolitan work from home towns. Lots of cool towns listed here.
Keep calm, make sure you go out and vote. (have a plan B & watch how things develop.)
"But I think she — like a lot of other white, Gen X native-born Americans who’ve known mostly domestic peace and stability — is being entirely too blasé about the approaching storm.
As an immigrant who escaped to America from apartheid-era South Africa, I feel that I’ve cultivated a sharper appreciation for political trouble. To me, the signs on the American horizon are flashing blood red.
Armed political skirmishes are erupting on the streets, and scholars are tracking a rise in violence and instability as the election draws near. Gun sales keep shattering records. Mercifully, I suppose, there’s a nationwide shortage of ammo. Then there is the pandemic, mass unemployment, natural disasters on every coast, intense racial and partisan polarization, and not a little bit of lockdown-induced collective stir craziness."
https://www.nytimes.com/2020/09/03/opinion/im-doomsday-prepping-for-the-end-of-democracy.html
This shows how broken the housing market is in many big US Metropolitan areas. Also what a strange & sad story of real estate grifters.
"One reading of Brooks-Church and Gendville’s faltering empire is a tale of a couple who simply got in over their heads. From what Miller, the appraiser, can surmise, the math stopped working “well before COVID,” given the double whammy of falling retail sales and rising commercial rents. “They can’t keep it going without selling some of the assets,” he says. “They’re running into roadblocks of their own making.”
Another way to look at their downward spiral is as a parable of a housing market that is not primarily intended, or even incentivized, to actually house people. Brooklyn’s runaway success, it turns out, was built on an economic disparity so intense that it has created a microgeneration of gentrifiers like Brooks-Church and Gendville who are now being priced out themselves."
https://www.thecut.com/2020/08/1214-dean-street-brooklyn-landlords.html
Go Optimism!
https://seths.blog/2020/09/optimism-as-a-choice/
This is an excellent framework for thinking about marketing. From the master.
https://rishad.substack.com/p/strategy-frames-light-and-time
"Unlike other middlemen like Instacart and Uber Eats, GoPuff acts more like a retailer, buying directly from giants like Anheuser-Busch, PepsiCo and Unilever. It generates revenue not so much from the nominal delivery fee, but from slapping a hefty markup on the stuff and, increasingly, selling better placement on its app.
Business has been booming since the pandemic hit. Sales reached an estimated $250 million in 2019, and orders are up 400% this year, but it is not profitable and admits it’s still not making money on a fourth of its centers."
It is not a new idea—and not necessarily a good one. Essentially the same model (with the exact same financial backer: SoftBank) was tried out in the first dot-com bubble.
Turns out super-fast delivery of low-cost groceries is a very tough way to make a buck. GoPuff says it is different because of its $2 delivery fee (Kozmo was free) and $10 minimum (Kozmo had none). It also benefits from focusing on physical clusters of customers, which pre-Covid largely meant college kids on campuses."
This is a brilliant analogy. Coffee and Consultants. Worth a read.
"At the risk of over-simplifying this, for both coffee and consulting you could say:
First wave is the Silent Generation with a cronyist ethos and no taste.
Second wave is Boomers with a flashy charisma ethos, some taste, and a lot of stagecraft.
Third wave is Gen X with a retreating/self-effacing nerd ethos and skeptical but deeply held tastes. It’s obviously the best wave.
Fourth wave is Millennials with an ironic/kayfabe ethos and cynically performative tastes.
This shouldn’t be too surprising. Both coffee and consulting are products for minds. Psychoactive products that link to producer and consumer personalities. You should expect to see echoes of generational personalities. Both are also mid-career markets. Your coffee tastes settle down around when you settle down into an adult career."
https://artofgig.substack.com/p/fourth-wave-consulting
"Both journalists and venture capitalists struggle with mainly the same end decision; is the story worth publishing and is the story worth investing in. Approaching the issue from the notions of news judgement and investment decision, the two professions have striking resemblances when it comes to both upstream and downstream processes. Journalists rely on newsflow while venture capitalists depend on dealflow. The quality of it is key."
Love these kinds of unknown giant businesses. Great for Croatia and the region too. Profitable too!
"Infobip is one of those big companies that no one has heard of but everyone has used. If you’ve ever received a message from your bank, or from Facebook or Uber, you’ve used Infobip. The Croatian company provides the messaging platform for some 750 banks, and works with some 650 mobile operators around the world.
Silvio Kutic, founder and chief executive, estimates that some 5bn people, or ⅔ of the world’s population have used the Infobip service, which is still run from Kutic’s tiny home town of Vodnjan, on Croatia’s Istrian coast."
https://sifted.eu/articles/infobip-unicorn-ipo/
"Like money, status is about scarcity. It is an abstract but absolute representation of what you have. It is zero-sum, and backed by something tangible. Status is a flex.
Also like money, status is about reputation. It’s about trust, generosity, and about what you’ve given away, not what you have. It can be originated into existence, or destroyed. It isn’t like a gold coin here; it’s more like an IOU. It’s an adaptation to abundance, not to scarcity.
Status is both of those things. It’s a unit of what you have, and it’s also a unit of what you’re owed."
https://danco.substack.com/p/scarcity-status-versus-abundance
A great rags to riches story. The original Tyler Perry.
"The 51-year-old entertainer owns the entirety of his creative output, including more than 1,200 episodes of television, 22 feature films and at least two dozen stage plays, as well as a 330-acre studio lot at the edge of Atlanta’s southern limits. He used that control to leverage a deal with ViacomCBS that pays him $150 million a year for new content and gives him an equity stake in BET+, the streaming service it debuted last September.
Forbes estimates Perry has earned more than $1.4 billion in pretax income since 2005, which he used to buy homes in Atlanta, New York, Los Angeles and Jackson Hole, Wyoming, as well as two planes. Quite a lifestyle for a once-homeless playwright raised in poverty in New Orleans. Today, Forbes estimates his net worth at $1 billion, with a clear path to future membership in The Forbes 400."
“I love when people say you come from ‘humble beginnings,’ ” he says. “[It] means you were poor as hell.” It also makes success sweeter. “Ownership,” he adds, “changes everything.”
One of the most prescient books (and favorite ones too), "The Sovereign Individual", this world is starting to come to fruition 2 decades later.
"The basic thesis of the book is that technology, particularly the internet, will lead to unbundling & modularizing of government.
Put simply: We'll transition from being a "citizen" of government to a "customer" of government, where governments compete to earn our business."
https://eriktorenberg.substack.com/p/the-sovereign-individual-investment
"Zoom is the Napster of the event industry, the ease with which you can put on good-enough virtual events with a global audience, almost for free, much to the undercutting of the underlying economics of the physical events world. All types of business event — conferences, trade shows, conventions — are in danger of their revenues streams of tickets, sponsorships, memberships, and other types of fees being eroded as the world gets used to digital formats and alternatives emerge to physical networking, matchmaking and other tasks we get out of these events.
Billions of dollars have been sucked out of the industry this year as it is completely shut, and virtual is making up only a tiny fraction of that."
https://skift.com/2020/08/26/the-event-industry-is-being-confronted-by-its-napster-moment/
"We agree with much of the investing world. It’s hard to build conviction in most things, and these tech platforms offer an oasis of certainty. But buying their shares sounds expensive, and it’s a hard way to differentiate."
"Rather than own FB shares, we’d rather own Instagram accounts. Rather than owning Amazon stock, we’d rather own a bunch of third-party selling merchants. And rather than owning Google stock, we’d rather own YouTube libraries.
Why? Because all the tailwinds that make those stocks interesting to own are, in part, shared by the commercial actors on their platforms. And yet capital markets largely haven’t flowed into those spaces yet."
https://medium.com/@alibhamed/platform-economies-65d6714ca768
I like this new version of Wartime vs. Peacetime leadership. That analogy was not always the most appropriate for business. Routine Check vs. Emergency Room CEO.
"The “wartime” analogy gives people in power an excuse for poor behavior which is separate from making tough decisions quickly. You don’t need to look past the White House and other world governments to see how behavior and decision making can be conflated. Furthermore, many tech CEOs have not fought for our country. They have fought many many other battles and wars, but not the type that involves the military.
Also, the military has traditionally been exclusively for men (Mulan!), so I wanted to remedy that. [b] Finally, war implies a zero sum result (a winner and loser), but in times like a pandemic, the end result is not necessarily zero sum. In fact if one loses, we all lose."
https://foundermusings.substack.com/p/war-and-peace
"Since 2017, the San Francisco–based company has invested in more than 15 startups. It tends to take early-stage stakes of about 10% in startups that are led by its former employees or represent a facet of the financial technology sector, say investors who have worked with Stripe on deals.
Leveraging its success as a private company and the reputation of its founders Patrick and John Collison, Stripe has won deals, sometimes by outbidding traditional VC firms. That’s helped it emerge as a growing force in corporate venture capital, just as Google and Salesforce did in years past.
“There’s a halo effect around Stripe” because of its valuation and engineering reputation, said Ross Rich, who spent four years at the company before he co-founded Accord, which makes collaborative software for sales representatives. Stripe led its seed financing earlier this year after a competitive fundraising process."
https://www.theinformation.com/articles/venture-capitalists-newest-threat-stripe
"The lesson here for startups is that the imperative is to achieve a drumbeat of regular and repeated product-market fits, because PMF isn’t a single note you hit and then move on. It’s an ever-evolving rhythm of problems and desires and whims that you have to constantly play to, like great jazz."
This really spoke to me and I think it is timely for all of us right now.
"We’ve all been thrown off our track, to varying degrees. Some, more cruelly than others. It’s easy to assume we can just find the track again on the other side of this, if there is another side. But in listening to Boyd over and over in August, I have a slightly different view. I think most of us will need to work really hard to rediscover the track.
It may take years, in fact. It will require a significant amount of scenario planning, letting go of beliefs once strongly-held and/or accepted as immutable truths, a survivalists’ adaptability, and the willingness to be nimble and accept new environmental signals that may force us to make decisions we couldn’t have dreamed of just a few months ago.
That’s why I find Boyd’s metaphor so powerful. This year will force me to be even more alert, move alive, more aware of the signals around me. By paying close attention, there’s a possibility to find the track again. It won’t just reappear, like someone flipping the switch back. Rather, I believe it is a new track, and it has to be forged from scratch."
https://semilshah.com/2020/09/06/finding-the-track/
This is an excellent framework and idea for startup founders working on alignment of their team.
https://davidcummings.org/2020/08/29/startup-state-of-the-union-slide-deck
"The general population does not have internal motivation. They are more interested in being entertained and “chilling” with other people who won’t go anywhere. Therefore, they always want the short cut and they want it sold in an exciting manner.
If you attempt to sell with logic and without emotion, the losses you incur will force you to quickly realize the above. Short cuts and hype are significantly better sales tools compared to logical things such as more effort = more rewards. Make everything appear to be more entertaining vs. educational, hence why movies are more popular than books. So on and so forth.
If it sounds long/difficult like anything meaningful in life, you’ve done a terrible job with your pitch."
https://wallstreetplayboys.com/ignore-what-people-say-focus-on-what-they-do-specific-examples/
"And so with no good answers from authorities who should offer them, we have entered a golden age for anecdata about the state of the U.S. economy that I think is teetering on the edge of full-out denialism about the recession, the recovery, and how lawmakers and other officials ought to proceed with what happens next. And we’ve reached this moment believing what we see instead of what a sum of the economy’s parts tell us. We are in this position not because of economic data but in spite of it.
Because what the data really tell us is we shouldn’t believe our lying eyes. We shouldn’t trust that it looks like things are reopening with vigor, that the world appears to be. getting back to “normal,” that this crisis seems to have turned out to be temporary.
The economy is operating so far below capacity that we can’t help but make excuses for how “normal” things around us might seem."
https://mylesudland.substack.com/p/can-we-trust-our-lying-eyes
"Hu is part of a rising class of creators in China who are racing to get in on live-stream shopping, an emerging form of retail that has grown into an industry worth an estimated $66 billion. Although the trend has been part of Chinese internet culture for years, analysts say the coronavirus pandemic has made it mainstream.
Even the Chinese government has voiced its support, calling the industry the "new engine" of e-commerce growth and encouraging live-streaming as a solution to unemployment, which has risen sharply in China due to the pandemic.
Live-stream shopping is a blend of entertainment and e-commerce. Viewers buy goods online from people who show off their latest finds — from lipsticks to laundry detergent — in real-time videos. Many liken the concept to TV shopping channel QVC, but the Chinese model is distinctly more modern, mobile and interactive. Hosts can give their fans discount coupons and flash deals in real time, while viewers can click to send their favorite stars virtual "gifts."
I think this is a really smart move altho Tai Lopez has a mixed reputation.
"Tai Lopez — whose Web site hawks wisdom for Web entrepreneurs on “traffic mastery” and “Instagram hacks” — has launched a new company, Retail Ecommerce Ventures, that’s shelling out tens of millions of dollars for a growing assortment of down-and-out retail brands. And he’s been keen to broadcast REV’s deals to his more than 10 million social-media followers.
Lopez’s business partner is Alex Mehr, a 40-year-old, ex-NASA scientist who co-founded Zoosk, a dating site that sold for $298 million last year. Together, they’re buying the intellectual property of some of the highest-profile victims of the carnage that has engulfed the retail industry.
In addition to Dressbarn in November, Pier 1 in July and Modell’s in August, the duo’s Miami-based firm acquired Linens ’N Things and the Franklin Mint in June from Sequential Brands Group for an undisclosed price. Another three are in the pipeline, Lopez says, declining to identify them.
Their big bet: That these retail names have the potential to become cash cows online, even if the thousands of stores they used to operate are getting shuttered."
Josh Kopelman knows. In this day and age, it's the brand of the firm and the brand of the individual investor.
"When First Round was first getting started, there were so few seed funds that it was like walking into a Footlocker and seeing just three sneakers on the shelf. A founder could try on all three and kind of see which fit, then pick. But today, when you walk into that shoe store and you see 1,000 shoes on the shelf, it’s really hard to know where to go first.
And we believe that the brands that have proven their ability to create winners before really matter. Just like Nike is defined by the entrepreneurs who have benefited from its product, I think brand actually matters more now than ever before."
Yup! The absolutist policies make no sense as well as the lack of rational guidance from anyone in government right now in the USA. Basically down to the individual now to manage this.
"When we talk about outdoor risk of transmission versus indoor, we’re talking about like 20 times difference with indoor risk being 20 times higher. So it’s just a huge prevention opportunity.
And, as you said, we are not going to stop interacting as human beings. So let’s find ways to keep our contacts at a minimum and keep them outdoors. If we work with that framework, I think there’s a lot we can do. That is more sustainable than the approach we’re currently taking, which is fragmented and unproductive."
https://www.vox.com/2020/9/10/21430547/covid-19-julia-marcus-the-ezra-klein-show-outside-inside-risk
A successful bet gone bad. And now America & the world is paying for it.
"Although Thiel has been moving away from Trump for years now, his write-down on a presidential investment during an election year is due in part to the administration’s disastrous response to the coronavirus. As the economy tanked and millions got sick, Thiel became furious, as first reported by the Daily Beast. Two people close to Thiel have confirmed that the pandemic was a breaking point for the technocrat, who once hoped electing a political outsider would disrupt bureaucracy and bring about radical change and innovation in government."
https://www.buzzfeednews.com/article/rosiegray/peter-thiel-donald-trump-white-nationalist-support
When Revolutionary meets Revolution. This is awesome. Anthony "Pomp" Pompliano
"We are living through a time of great transition. These trends will lead to the creation of a new type of investor — the solo-capitalist.
These trends include:
A transition away from institutions
Increased need for individual identity
Decreased friction for audience building
Greater focus on a decentralized investor base
Increasing desire for removal of communication middlemen
A rise in solo-capitalist tools & platforms
My goal is to be at the tip of the spear of this transition to the era of solo-capitalists."
https://pomp.substack.com/p/im-launching-a-new-fund
"The teenage economy of cool is a savage yet intricately structured marketplace where humans have to work out how to survive in an open tribal landscape. There’s a reason so much YA fiction is dystopic and horrifying like The Hunger Games or The Maze Runner.
Why is it that cool is so often associated with teenagers?
I suspect it’s because teens live at a very particular juncture in life. They’re old enough to be conscious of the dynamics of cool and social status, their tastes are developed enough to have a more refined quality filter on things like music and fashion and other consumer products, but they’re not so old that their tastes have ossified or that they’ve become captive to years of conditioning from the advanced marketing apparatus of capitalism or the sophisticated social conformity pressures of adult society.
So we ascribe a more intuitive valence to their judgements of what is cool, what is not."
“This more agile understanding of the digital economy helps explain why Gen Z is so much more prone to Internet entrepreneurship. Instagram, YouTube, and TikTok are incredible tools for broadcast – and for building a business around that broadcast content. When it comes to messaging friends and expressing themselves, they’ll go to Snapchat, iMessage, Discord, and Instagram DMs.”
I hate this show but it is impressive how they leveraged the crap out of it as a business platform. We can all learn something from them regardless.
"The show allowed the family to establish themselves not just as celebrities but as characters with storylines that the media and fans hungrily devoured. They were able to then leverage this attention into billion-dollar businesses, the success of which was driven by the public’s sense of connection to them, of knowing them. The show was their secret weapon — a tool for promotion and personification, providing personal narratives and depth that influencers and even Hollywood A-listers could never achieve."
"It could be argued that the Kardashians no longer need KUWTK. After all, they have already leveraged stratospheric fame and wealth into lucrative businesses. Kim’s and Kylie’s cosmetics companies are currently valued at $1 billion and $900 million, respectively; Khloé’s clothing brand had one of the most successful launches in history; even Kourtney — the least enthralled by life in the public eye — recently launched a lifestyle website."
How The Kardashians Spent Years Destroying The Show At The Center Of Their Empire
Impressive group of investors, founders with grit & awesome product. Valuation seems really out of whack to me. WTF do I know?
"Roam Research, which has raised $9 million at a valuation of $200 million, or about 25 times higher than the median valuation for seed rounds.
Roam is tapping more than a dozen individuals and firms for the round, including Stripe co-founders Patrick and John Collison, True Ventures and Lux Capital.
"Other investors participating in Roam's seed funding include Coinbase's former Chief Technology Officer Balaji Srinivasan, Uber investor Tim Ferriss, Accomplice VC partners Sarah Downey & Jeff Fagnan, & individual investors Nikhil Basu-Trivedi, Josh Buckley, Brianne Kimmel & Harry Stebbings.
Excitement about this new crop of note-taking apps echoes the fanfare that rose around Evernote in its early years—& then largely evaporated.
It reached a valuation of more than $1 billion, boosted by a who’s who of Silicon Valley investors. Users topped 200 million. But its outlook dimmed as people turned to other free, cloud-based services, & Evernote went through rounds of layoffs. An expected initial public offering failed to materialize."
This one really spoke to me. 2020 has been tough on all of us.
"Surge capacity is a collection of adaptive systems — mental and physical — that humans draw on for short-term survival in acutely stressful situations, such as natural disasters. Pandemics are different — the disaster itself stretches out indefinitely.
“The pandemic has demonstrated both what we can do with surge capacity and the limits of surge capacity,” says Masten. When it’s depleted, it has to be renewed. But what happens when you struggle to renew it because the emergency phase has now become chronic?"
“I think we maybe underestimate how severe the adversity is and that people may be experiencing a normal reaction to a pretty severe and ongoing, unfolding, cascading disaster,” Masten says. “It’s important to recognize that it’s normal in a situation of great uncertainty and chronic stress to get exhausted and to feel ups and downs, to feel like you’re depleted or experience periods of burnout.”
“It’s harder for high achievers,” she says. “The more accustomed you are to solving problems, to getting things done, to having a routine, the harder it will be on you because none of that is possible right now. You get feelings of hopelessness and helplessness, and those aren’t good.”
https://elemental.medium.com/your-surge-capacity-is-depleted-it-s-why-you-feel-awful-de285d542f4c
Business Development (BD) & Partnerships Make NO sense for most Seed Stage Startups
I find this happens often for founders. They push for a partnership with a large distribution partner too early. The thinking goes like this.
“We have an awesome product and it’s so hard to get in front of customers. Plus I am not a sales expert. So we will just partner with XYZ BIG awesome company who have these customers and they help us sell it or use their channel to do it. Problem solved.”
On paper this seems like it makes a lot of sense. But I think it is a mistake. There are so many unknowns you need to figure out. Adding in a larger partner who may have different priorities adds complexity when you should be looking at some basic things first.
Oftentimes, your product is usually not awesome yet. We are talking seed stage here (ie. pre-Series A) where things are still half baked. There are most likely many issues and bugs. Something an established BD Partner will just not be able to tolerate or be willing to risk distributing to their valuable customer base.
I am a fan of BD/Partnerships for startups but only after they have figured out their own customer segments, have confirmed it by selling themselves and closing a bunch of deals. You need to have a clearer view on positioning: the story and value proposition and sales cycles. And you also need a decent sample set (10-50 customers yourself) and good basic sales process in place. This is the foundation to make BD work for you and you cannot short cut this.
Then and only then, does it make sense to think about and explore BD Partnership. Once you go down that path, you have to ensure you have the right people managing the partnership, educating the channel partners sales team, helping them craft messaging & marketing (that hopefully you will have from your own foundational work). You also need to think about how to manage commissions/revenue splits and track them.
You also need to have people on the team ready to jump in ready to fix stuff when something breaks on product, process or whatever side. Basic account management, otherwise known as channel management. If you do not do this, the BD/Partnership with XYZ Big company will not work because they will not trust that you help in future. Selling someone else’s product/service is always harder and commissions also do not always align to make it work.
So the point is you gotta sell this yourself, then build a team around yourself to sell it successfully. Then and only then, do you earn the right to engage in the BD/Partnerships route. And also more likely to make it work.
Turning of the Corkscrew: from Burn to Bust
From “Startups” to “End Ups”. I recently heard a talk about the cycle of life of companies here in Silicon Valley. It’s a good perspective of the different stages and evolution of a company.
In the beginning, you go from the stage of trying to reduce “Burn” rate. So everyone you hire is irreplaceable. In this stage you need people who are iconic, unique and who take the initiative and just get S--t done whatever it takes. Sometimes it is ugly but they get the job done.
But as you become more successful and scale, the goal of the company shifts to trying to reduce the odds of going bust. Hence the “Bust” stage. You need to make sure you have processes, add in code ie. automation, make sure everyone on your team is replaceable. Basically standardization (or some people prefer to call it bureaucratization) by making sure people fit in their box and do not deviate from the processes that make the business work.
That is why you see so much churn of staff as companies grow. And this churn and continual move to critical mass in new companies and industries is what keeps Silicon Valley so competitive & interesting. Knowledge and best practices spread all over. Almost like bees flying around and pollinating their spores around.
So an older example, would be the folks who left Fairchild Semiconductor and started Intel. Or how refugees from Ebay seeded many of the future massive marketplaces and ecommerce businesses. Or how many ex-Yahoo! People seeded Google, Facebook and many present digital media and adtech giants. More recently you see how many ex-Facebook employees have ended up in the world of Crypto.
At present times, I’m super excited to see where top people from Airbnb, Square or Coinbase end up.And the new awesome startups and ideas they kick off or join. It’s the wonderful virtuous cycle that drives innovation in Silicon Valley.
Marvin’s Best Weekly Reads September 6th, 2020
“Wherever there is oppression, there is resistance” --Zhou Enlai, 1972
“But the pandemic and the subsequent ‘new normal’ across Europe has pushed neobanks to the edge. With not a penny of profit yet between them, the pandemic was an opportunity for the startups to strengthen their relationship with users, and come out of the lockdown having proved their value over the big banks they sought to disrupt.
This simply didn’t happen. Instead the prospects of the European neobank withered, unused and unloved in the wallets of their users. For years, no one has had reason to question the claim that the bank of the future would be a neobank, but as revenues dwindle, regulatory obligations sap energy and long-serving staff wave goodbye, the basic promise of Europe’s neobanks to deliver on this is fading fast.”
"You cannot be a successful investor by believing what everyone else believes, otherwise you would (literally) miss out on every single increase in value. The best investors I know are not necessarily the great spreadsheet makers (no shade to spreadsheets, I love spreadsheets!), they’re the people who have really unique perspectives and strong intuition + conviction. You have to do real analysis and work to make a call about what the future might look like. I think you have to look outside of just “data” too. Like you said, everyone has data."
https://alexdanco.com/2020/08/28/the-se-suite-an-interview-with-julie-young-gift-culture-part-2
What a crazy story. A Must read.
"The case had come to remind Reed of the saying “perception becomes reality.” It seemed to him that Ted Wright had almost willed this character of “T. R. Wright” into existence. From the time he was a schoolkid wearing a suit, he was determined to become a larger-than-life persona, projecting the confident James Bond image in the stories he told his friends and, later, in his social media feeds, even when he might have been struggling financially. By the end of the period under investigation, Reed said, T. R. was “pretty close to everything he was representing himself to be.”
“I got to the point where I was probably too arrogant and cocky for my own good,” T. R. said. “I thought that I would never be arrested, or that I could buy my way out of it. That’s how things work in the rest of the world.”
https://www.texasmonthly.com/articles/it-was-never-enough/
"28% of restaurateurs are shrinking their menus because of the pandemic. That number is so large that New York Magazine recently asked, “Is It Time To Get Rid of Menus For Good?”
The underlying reasons for this are financial: Restaurants can’t bother with low-margin dishes. They have fewer employees on the payroll, so they want to be more efficient with a smaller set of meals. They’re prioritizing fewer — and cheaper — ingredients.
But rewriting a menu is no simple task. Every inch of text, from the typeface down to the order of items, must be workshopped for maximum profitability.
And when restaurants need help, they turn to a niche, little-known cadre of professional “menu engineers.”
https://thehustle.co/meet-the-menu-engineers-helping-restaurants-retool-during-the-pandemic
BTW: Most LPs will not do this because they are too risk averse.
"For LPs, being “defensive” means investing in existing funds, established funds, and large “index-like” funds. If an LP has already invested in a GP and they are doing well, it is very likely they will receive another check in 2020.
Yet, we know there are emerging managers (EMs) today who are building the next Andreessen Horowitz or Lowercase Capital. We know there are opportunities to ignore the conventional wisdom and build a new, more sophisticated venture fund.
“There is rationale for being thoughtful and aggressive,” said Conrad Shang, Director of the University of Texas/Texas A&M Investment Company (UTIMCO). “While some LPs are dragging their feet, use this time to invest in notoriously hard-to-access funds and back the new innovative batch of promising general partners.”
"To recap, this is a gaming company that launched one of the number one games on the planet, and also built an e-commerce platform… and a payments/wallet platform… And all three of these efforts gained huge traction simultaneously, despite requiring very very different types of talent, skillsets, and resources.
American investors and product people tend to flinch at diversification that appears orthogonal in this way. But when you look at Sea’s chosen businesses in the context of “How do we best engage the high ARPU internet user in SE Asia?”, these three areas make a lot of sense. Sea wants to own the wallet and all of the commerce that users engage with - both for physical items (Shopee) and digital entertainment (Garena)."
https://julieyoung.substack.com/p/thoughts-on-sea-limited
These are great predictions. Community will be huge in the present and post Covid World.
https://macredd.in/2020-community-predictions
The Bull case for New York City. Never count the place out. I personally cannot wait to visit when this Covid mess is over.
"More than one-third of the city’s inhabitants are foreign born! This diversity applies to industries: tech isn’t even in the top five for numbers of people employed! Since moving here four years ago, I’ve made friends in industries from art, fashion, journalism, media, politics and more. I love going to dinners with friends where no one talks about tech. This diversity of industries that make up New York will hopefully also make it more adaptable to the evolving economy in the years head."
https://medium.com/@robbailey/why-i-am-long-nyc-9e982d16078e
"Across each category of deep tech, we go through a hype cycle that leaves scars at the firm & market level, almost killing entire categories for VCs (try raising a VR series B+ over the past few years, for example).
Often these deep tech companies require patience as commercialization metrics lag traditional companies, with upside that is arguably not as asymmetric across all categories. This creates a valley of despair for many companies that were able to raise seed & A capital, but where series B firms struggle to gain $25M+ check size conviction without material social proof and company comparable metrics.
If a company is able to break through that barrier (often with great narrative and early signs of commercialization) then there is a secondary exhaust when it comes time to raise growth capital, as growth stage investors are even less primed to dream big without consistent revenue figures or scalable, decent-margin revenue, with a diversified customer base.
As Deep Tech has become a category, the universe of investors & well-funded companies has grown materially over the past decade. This has led to a large number of companies that are growth-ish stage, looking for liquidity.
Enter SPACs."
https://notes.michaeldempsey.me/post/627519998424907776/deep-tech-spacs/
Good advice for new VCs.
“Palantir’s core business, and probably its most profitable business, is its government business — especially work for three-letter agencies and the Department of Defense,” Garg said. “I don’t think that’s going to change.”
What remains to be seen, then, is if Palantir’s ability to marry 21st-century Silicon Valley disruption to 20th-century defense contracting will live up to its valuation when it hits the stock market."
https://www.vox.com/recode/2020/7/16/21323458/palantir-ipo-hhs-protect-peter-thiel-cia-intelligence
"Contrary to popular belief, Peter Thiel believes that technological growth has stalled, and that it has been this way for a while.
His claim is that we've had this narrow cone of progress around the world of bits—around software & IT — but not atoms. The iPhones that distract us from our environment also distract us from how strangely old & unchanged our current environment is. If you were to be in any room in 1973, everything would look the same except for our phones.
In the 50s and 60s, technology meant atoms and bits. It meant biotech and medical devices. It meant nuclear power, new forms of energy, underwater cities, the green revolution in agriculture, space travel, supersonic aviation, flying cars, etc. But, today, our only progress is in the realm of computers."
"Today, we live in a world where we've been working on the Star Trek computer in Silicon Valley, but we don't have anything else from Star Trek. We don't have the warp drive, we don't have the transporter, and we can't re-engineer matter in this cornucopian world where there is no scarcity."
https://eriktorenberg.substack.com/p/the-world-according-to-peter-thiel
This is really smart. Great for creative economy.
"Creator commerce platform Teespring is set to roll out the integration soon, and it’s currently being tested with a limited group of users. Thousands of TikTok creators have already partnered with Teespring to start creating merchandise they can sell to their followers. The integration will allow “creators to create their own products on Teespring, push it directly to TikTok, and then have fans be able to buy products directly through TikTok,” Teespring CEO Chris Lamontagne told The Verge. It marks the first time that creators can sell their own merchandise directly through TikTok."
Stripe is the company to watch in my opinion.
"Building the economic infrastructure for the internet, and ultimately the Metaverse, is a massive responsibility. I wouldn’t trust Mark Zuckerberg with it. But Stripe possesses another cornered resource - the Collisons themselves. Their demonstrated thoughtfulness, appreciation of nuance, and dedication to intellectual rigor make them the most appropriate stewards of a new economy."
"I’ve heard a variant of that idea from people who either wouldn’t work for anyone but Stripe or wouldn’t leave their current role to go anywhere except Stripe. PayPal and Adyen, while both seemingly well-run companies, don’t seem to inspire that same fervor. Over years and decades, the effect of hiring the best people and setting them loose on big problems together compounds and lengthens Stripe’s lead."
https://notboring.substack.com/p/stripe-the-internets-most-undervalued-ec3
Absolutely fascinating, platforms for indie rap artists. Creator economy is one of the more exciting areas to explode & underpins this.
"These new services address lingering pain points, especially in distribution. Stem and UnitedMasters help artists get their music on streaming services, simplify royalty splits, and gain access to brand partnerships. SuperPhone and Community show how far texting has come. Not too long ago, Mike Jones gave out his actual phone number and he got called 40,000 times a day. What a time. Long live 281-330-8004.
These businesses line up with the broader trends in the “creator” ecosystem. Email newsletter services like Substack were first built to breed more success stories like Ben Thompson’s indie publication, Stratechery. OnlyFans has evolved from an X-rated membership platform to an informal paywall for Instagram-style content. If there’s an audience to monetize, there’s a startup that’s on it.’"
https://trapital.co/2020/08/31/why-hip-hops-indie-economy-has-taken-off/
If someone can pull this SPAC off, this is the team. Very impressive.
I don't agree with everything in this article as it reflects the popular all tech rich are evil BS but it's definitely food for thought.
"For there’s the real rub with digital isolation — the problem those billionaires identified when we were gaming out their bunker strategies. The people and things we’d be leaving behind are still out there. And the more we ask them to service our bubbles, the more oppressed and angry they’re going to get.
No, no matter how far Ray Kurzweil gets with his artificial intelligence project at Google, we cannot simply rise from the chrysalis of matter as pure consciousness. There’s no Dropbox plan that will let us upload body and soul to the cloud. We are still here on the ground, with the same people and on the same planet we are being encouraged to leave behind. There’s no escape from the others."
The Privileged Have Entered Their Escape Pods | by Douglas Rushkoff | Aug, 2020
Prescient: nails the dangerous situation America finds itself in.
"Know who’s having fun tonight? All of the BLM “organizers” & all of the Antifa “cadres” & all of the Proud/Boogaloo “boys” & all of the MAGA militia “soldiers”, that’s who.
"How do we stop the violence & the carnage of these bullshit and criminal “fiery but mostly peaceful” night time waves of destruction, &– increasingly – the bullshit & criminal confrontations between rival political supporters?
How do we stop burning down the wrong things so we can get started on burning down the right things?
We change the narrative that these burners & looters & counter-burners & counter-looters tell themselves. We make it not fun, for the burners & looters as well as for the counter-burners & counter-looters."
We make it not fun by removing the thrill of the chase and the thrill of the fight – we contain the rioters and the night time looters – so that all that is left is the boredom of walking around and yelling into the wind all night. We accomplish this with numbers and curfews.
That’s how we work our way through this.
We accommodate protester voice through new elections/plebiscites, & we contain criminal tag-alongs with sheer numbers of trained public safety officers.”
https://www.epsilontheory.com/lucifers-hammer/
Damn, no wonder 2020 has been so rough. This year cannot end fast enough.
https://theirrelevantinvestor.com/2020/09/01/all-wrapped-in-one/
The man knows what he is talking about.
“When you’re first starting and you may or may not have a job, or you’re at a complete uncertainty about your career, what I learned early on is that if I put in the effort, I can learn almost anything,” he says. “I taught myself technology… it was time consuming, and painfully so, but that investment in myself has paid dividends for the rest of my life.”
Although it seems like an obvious solution, it’s actually the one piece of advice Cuban would give his 20-year-old self if he had to restart his entire career in 2020 with only a $20 investment. Given how the pandemic has impacted the job market, Cuban also has a thought about monetizing a form of tech everyone knows about but has no idea of all its functions: Amazon's Alexa.
“Particularly now with the pandemic, we’re trying to go touch-free,” he says. “The ability to use ambient voice to really help your business—nobody’s doing it very well. So I’d be all about that and I think I’d be able to build up a nice little business doing that.”
https://www.menshealth.com/entertainment/a33822107/mark-cuban-financial-advice/
I like this. It’s never too late.
https://schlaf.me/nevertoolate/
This is a fascinating tweet thread on Joe Rogan.
https://twitter.com/APompliano/status/1300963994258354181
This is a great thread on the brilliant Balaji.
https://twitter.com/dickiebush/status/1301241471782318080
This is why the Samwer brothers are scum. But to be fair the other investors are idiots for investing without doing DD on their rep of slash of burning previous investors.
"Imagine you and I own half each of a $100,000 sports car that has another $50,000 locked in the trunk. The problem is that I have the car keys, so you can neither drive it nor access that money. I offer to buy you out for about $50,000. Fair deal?
You’d doubtless feel hard done by. Yet Oliver Samwer, chief executive officer and founder of Germany’s Rocket Internet SE, is making a similar proposition to his fellow shareholders. He wants to take the web-investment company private again, and he’s offering to buy out other investors in a way that would let him and his family keep that nice little stash in the trunk."
This was an amazing teardown of an Emerging VC Fund Manager's deck. Super insightful.
https://labyrinth.substack.com/p/alpha-bridge-deck-review-by-superlp
"Vaccines, like most injectable drugs, need to be packaged in sterile glass. Glass is essentially impermeable to corrupting gases like oxygen while even high-grade plastic lets some air inside. Making these vials was a big business even before Covid-19 appeared in January. Last year, the global pharmaceutical industry purchased some 12 billion vials.
The Stevanato Group, a 71-year-old family-owned firm, provided more than 2 billion of those (The company is also the world’s largest manufacturer of cartridges for insulin pens). A Covid-19 vaccine, which likely will have to be administered in two separate injections, will require billions of additional vials. Stevanato expects the pandemic to drive up demand for its glass vials by 20% over the next two years."
This is gold for SaaS founders. Churn is a killer of businesses if you don't watch it closely.
https://davidcummings.org/2020/09/05/the-four-ways-to-calculate-saas-churn/
"This is why I think “no code operations”** is the next great job in tech. If I were thinking about how to break into a startup right now, I would start building with these tools immediately.
Even better, I’d start my own business on the side with only these tools. How far can you get with Airtable, Zapier and a website? Go for it, and develop your go-to-market chops and business building prowess along the way."
https://blog.usejournal.com/why-no-code-operations-is-the-next-big-job-in-tech-b8bb886378ac
“This is the VC version of the future of work,” said Bi, who managed a remote-only workforce for 10 years. “With Rolling Funds, micro LPs from all over the world now have access to invest in the next wave of underestimated innovators.”
https://angel.co/blog/super-angel-gp-launches-rolling-fund-with-global-lp-base
The West (coast) is the best?
"In the West, elites make their fortunes in building things (rather than collecting rents), and then rejoice in turning around and funding the nascent startups that challenge the very companies that made them wealthy, just for the goddamned lulz of it.
In the West, you are an individual. Whether your provenance be Boston or Bangalore, your family descended from brahmins or the actual Brahmins, the perceived value of your future arc matters more than your past or parentage.
In the West, hard-fought and daring failure is more noble and marketable than steadfast respectability.
In the West, dropping out of a storied institution to actually create something is more lauded than having graduated from it.
A place, in short, where the past, rentier capitalism, and “that’s just the way it is” trade at a steep discount, and the future, wild-eyed schemes, and “…one more thing” command the highest premiums."
https://pullrequest.substack.com/p/make-westing
Some impressive investors and people now striking out to do the Solo Capitalist thing.
“I felt like venture was changing enough that I could be a more independent player with a smaller vehicle but still go play with great companies,” said Sarver, who is restarting his venture capital plans after having spent five months setting up Frontline Foods, a not-for-profit delivery service for hospital workers and others on the front lines of the pandemic.
Sarver is part of a new wave of VC investors leaving bigger firms, many with plans to set up their own funds. It’s a growing list that includes Nikhil Basu Trivedi, formerly of Shasta Ventures, and Li Jin, previously a partner at Andreessen Horowitz. While venture capitalists have left established firms in the past, more appear to be taking the solo plunge these days."
https://www.theinformation.com/articles/venture-capitals-new-guard-goes-solo
Cool story.
"Soon after the coronavirus lockdown hit, some peculiar posts appeared on the New York City forum of Reddit, a popular discussion site. A user calling himself “meat boy” was offering crazy low prices on cuts ranging from drum sticks to pig lips at an obscure Chinatown butcher shop.
“Let your poor and broke ass friends know that they don’t need to starve in times like this,” he wrote.
The missives, which offered even steeper discounts to folks in need, were long, funny and rude. There were 26 F-bombs in one post alone.
They garnered thousands of likes and hundreds of comments on the usually curmudgeonly forum.
“Heart of NY right there,” was a typical response.
“Meat boy,” I learned when I called, is Jefferson Li, a 28-year-old military man who works at the butcher shop with his parents. His folks immigrated in 1985 from China’s Guangdong province and speak little English.
Mr. Li said he hoped to lure new customers to the struggling store, which caters largely to Chinese immigrants.
His dad worked long days at the shop for decades and drove a taxi at night. “I can’t stand to see all that effort go down the drain,” he said."
Why is none of this surprising?
Dan Bilzerian=Fyre Festival.
Fake it till you make it is a real thing. He is a character and have definitely enjoyed the show.
https://www.forbes.com/sites/chrisroberts/2020/07/09/dan-bilzerian-is-a-renter/#4de474547df5
The Right Leader at the Right Place & Time (or NOT): The Crucible of History and Business
Been watching a lot of World War 2 documentaries while in Shelter in Place these last few months.
Two clear examples in history stand out to me. These two pivotal battles could have gone either way with the outcome literally turning the war around. For non-history folks, these were the battles of Midway in 1943 with Japanese Navy versus the US Navy. At Stalingrad in 1942, it was German army versus the Soviet army. I guess we were lucky that our enemies had very conventional leaders such as Paulus (at Stalingrad) & Nagumo (at Midway) at the helm. These were inflexible commanders who followed the book & war plans to the tee. Not only this but they were not flexible enough or independent minded enough to take initiative or question orders.
At the critical point in time, the “by the book” Japanese & German leadership, could not step out of the doctrine and take the initiative.
I’ll give specific examples, at Midway when the Japanese had located the American fleet, they had part of their air wing ready loaded and ready for attack. But doctrine stated that only air attacks could only happen when there was full air wing ready. So Nagumo waited. This cost them time and allowed the Americans to launch their airwings earlier and beat them to the punch.
Both compounded bad decisions even when the data showed their original decision was wrong. Both put off the hard decisions to correct this ie. they were indecisive.
The original plan was to attach the land base at Midway island for 3-4 days, but when there was confirmation that the US Navy was closer than expected. Nogumo still decided to continue the land attack because that was the plan.
In the Eastern Front, by the end of 1942, it was clear Paulus and his German 6th Army was surrounded by the Soviet army. They were fast running out of ammo, food and winter supplies. Paulus continued to follow nonsensical orders from HQ to fight to the end. He refused to take initiative and break out of Stalingrad. He was trapped and his army was destroyed. From a number of 300,000 at the beginning of the battle, 91,000 were alive to march into captivity.
So why do I talk about history. There are plenty of lessons here. One lesson is that there are different leaders for different times. Both Paulus and Nagumo were “peacetime leaders” who came up through the ranks in peace time but when the crisis hit, it became clear they were not the right people. And their followers and soldiers paid for it. This is no different than a founder at a fast growth startup who then hits a major crisis whatever it is.
A crisis crystallizes what kind of leader you have. You literally cannot hide. Most folks crumble at this time or just disappear from sight. That is my frustration with these kinds of peacetime, bureaucrat leaders. They are so risk averse they just sit and wait or even worse, go into analysis paralysis mode. This critical point is when the rank and file need clear strong leadership as an example & to keep morale up. Your job is to show that there is light at the end of the tunnel.
True leaders step up during this time, are front and center of the organization and take the initiative to get through it. They take strong decisive action because they know that even if the decision is wrong at least there is movement. I’ve learned that being decisive is important. There is a 50/50 chance you could be right. In most situations, sitting around and waiting for more perfect information, it is almost always a 100% chance you are toast in the end.
Reminds me of the Prepper saying “What do you call people who overreact during a crisis? You call them Survivors!”
The Evolution of SaaS
The “Invest Like the Best” podcast interview with Eric Vishria of Benchmark Capital was probably one of the best recent ones I've listened to.
Businesses have gone from using software to businesses actually being encoded in software.
So business interactions happen through Application Programming Interface (APIs). Eric highlights a great framework to understand the different generations of SaaS in a fascinating discussion. David Cummings does a great job summarizing this here: SaaS Generations 1, 2, and 3
- Gen 1: Better delivery (vendor hosting) and economic (recurring rev) models
- Gen 2: Better adoption model (user-friendly, easy, cheap = bottom-up, "micro adoption")
- Gen 3: Encoded in software (from GUIs & price/user to APIs & price/usage)
Source: https://twitter.com/joaohlisboa/status/1291158198523699200
I’m going to give some more details below.
First generation of SaaS: Big ticket, enterprise sales and major implementation. The key customer segment is Fortune 2000. High cost to failure. Single instance & macro adoption where the executive level and entire organization needs to buy in. Business model Seat & licence and maintenance model. More Sales led. Moats are systems of record & large enterprise sales team.
“The huge innovation is the ability of the software vendor to abstract away most of the customer headaches that come with managing software and deliver it as a monthly or annual fee. This, combined with more efficient product development, due to customers always being on the same version, makes for an excellent business and customer model.”--David Cummings
Oracle, SAP, Salesforce, Servicenow, Peregrine are examples here.
Second generation of SaaS: where the competitive edge was great User Interface UI) /Graphic User Interface (GUI). Human lead and thus go through UI. Very cheap and low cost to failure. Micro-adoption model: “Try and toss mentality.” where only a small part of the organization needed to buy in. Opens up mid-market and SMB market. Huge new changes in pricing model from seat based to transaction & volume based. More marketing led.
“2nd generation SaaS is bought differently than 1st generation SaaS and feels more natural as both a buyer and user of the product.”--David Cummings
Economic model has a much more consumer type level of adoption where the user base is very large. Defensibility has become more like a platform for customers where there are network effects of data or customer usage.
Examples are Zendesk, Asana, Docusign, Slack etc.
Third generation of SaaS: is the extension of second generation SaaS strategies. But the new competitive frontier has shifted to API (Application Programming Interface). So it’s software talking to software via API. The people are being abstracted away. This is pushing the automation of processes in companies and enables speed of digitization in all businesses.
“APIs are the building blocks of modern software development representing re-usable components that make programming faster and more productive. APIs can now power many aspects of software that 5-10 years ago would have been custom.”--David Cummings
Because of this we see the rise of specialist software going after narrow customer segments. Ie. Twilio, Stripe, RapidAPI, ANAplan, Zuora
The big untapped opportunity for more customer value (and lock in) is a cross customer perspective that only the 2nd & 3rd generation SaaS companies can do. If you take some of this anonymized data you can come up with benchmarks or leverage relevant data points to help another customer. This is similar to what Stripe Radar is doing by leveraging anonymized customer IP data from their customers and helping prevent fraud for other customers.
2020 is the exclamation mark to this.
Data on the magnitude of cloud acceleration in 2020 (WSJ): In Q2 2020 alone, enterprises spent $35B on cloud software and services, up nearly $8B compared to Q2 2019.
https://twitter.com/chetanp/status/1295058029071671296
The Cloud is just getting started, so we are just at the beginning here. VERY Exciting times ahead for SaaS founders and investors.
Taiwan: The Hinge of the Global Artificial Intelligence (AI) Arms Race
“AI will be a huge technological revolution, even bigger than the Industrial Revolution. It will have a lot of consequences, create a lot of value and wealth, but it also brings about a lot of challenges.”1 --Kai Fu Lee
The leaders of the world’s great powers have made themselves very clear. They believe they need to dominate AI technology. The United States is the leader for now. Yet America’s rivals are working hard to reduce this edge.
Vladimir Putin remarked in 2017: "Whoever becomes the leader in this sphere will become the ruler of the world."
China’s Xi Jianping has said “he wants China, by year’s end, to be competitive with the world’s AI leaders, a benchmark the country has arguably already reached. And he wants China to achieve AI supremacy by 2030.”2
AI will be used not just for commercial reasons but also for the military. This is crucial for cybersecurity, for autonomous driving & flying and robotics.
“For China’s part, mounting investment in autonomous weapon development is a key plank in its ongoing effort to usurp American military dominance. Almost all large-scale AI programs in China benefit from massive governmental support and a huge trove of data, and it’s autonomous weapons program is the jewel in Beijing’s AI crown.
A further dimension to China’s AI strategy is economic, with Beijing seemingly interested in profiting from its autonomous weapons program as a new export product.”3
This is no different from the goals of the USA or other major powers; AI dominance is THE MOST important strategic initiative for the future. But the critical piece that often goes unrecognized is Artificial Intelligence’s dependence on microchips. This is especially so in the case in China.
China’s Chip Gap:
“China will still lag behind America in computing hardware in the near term. Just as data must be processed by algorithms to be useful, algorithms must be instantiated in physical strata—specifically, in the innards of microchips…..The most sophisticated chips are arguably the most complex objects yet built by humans. They’re certainly too complex to be quickly pried apart and reverse-engineered by China’s vaunted corporate-espionage artists”.4
“What AI chips do is optimize performance for specific tasks further down the AI stack. For instance, an AI chip can be tailored specifically for facial recognition, autonomous driving, or cloud computing. The best of these chips represent the bleeding edge of global semiconductor technology, and have grabbed the attention of Washington and Beijing. The Trump administration sees Chinese semiconductor progress as a grave economic and national security threat, and hopes to use a combination of sanctions and incentives to slow down China’s work on AI chips.”5
America used to be the leader with big chip players like Nvidia and Intel. But this expertise is slowly degrading in the USA, as best exemplified by US Chip giant Intel. A Chip giant who “admitted….. that it could actually partner with another semiconductor foundry to help with its next-generation manufacturing technology, as it announced a delay in its next process technology for future chips.
That was a huge admission of defeat for one of Silicon Valley’s most iconic companies. Intel is one of the last remaining semiconductor companies that still uses its own fabrication plants (also called fabs) to manufacture most of its chips.”6
It should be clear that Microchips are now a major chokepoint for China’s AI ambitions. The critical component of microchips and microchip parts are becoming a big tool used by the present US Administration to hammer the Chinese. One the most public examples, the American government has spent the last half decade undercutting the big Chinese telecom equipment provider Huawei by cutting them off from big global chip suppliers.7
“China needed to build more advanced and sophisticated products on par with the United States. However, most of these products required custom chips — and China lacked the domestic manufacturing capability to make them. China uses 61 percent of the world’s chips in products for both its domestic and export markets, importing around $310 billion worth in 2018. China recognized that its inability to manufacture the most advanced chips was a strategic Achilles heel.”8
China’s Big Chip Push:
China is not sitting back nor taking this quietly. They have made concerted efforts to build their own capabilities in microchip production. Officials in Beijing have made it their priority to build a self sufficient industry that will withstand American sanctions and compete at the global level. They are doing this by different levels.
At one level through legitimate means in big government policy and investment. A clear example being the push and support of Cambricon Technology.
“China's flagship artificial intelligence chip startup Cambricon Technologies is set to raise 2.58 billion yuan ($368 million) in its initial public offering that Beijing hopes will accelerate its challenge to dominant U.S. rivals.
The IPO on Shanghai's STAR tech market would be the first by a Chinese homegrown AI chip startup and would underline Beijing's commitment to facilitating capital flow to strategic chip developers. It follows a plan by Semiconductor Manufacturing International Corp. -- China's biggest contract chipmaker -- to raise at least $6.55 billion in the biggest-ever offering on STAR, which China touts as its version of the U.S. Nasdaq market.”9
At another level they are bridging the skill gap and hiring experts. Two newly established Semiconductor firms in China, Jinan and Hongxin Semiconductor Manufacturing Co (HSMC) have poached about 100+ engineers from the big Taiwanese semiconductor giants in a push to develop 14 and 12-nanometer chip process technology. This technology is still 2-3 generations behind Taiwan but still cutting edge for China.10
And at a more base level, the old fashioned way of stealing that knowledge through industrial espionage and cyberhacking. As recently as August 6th, it was reported by cybersecurity firm Cycraft that there was a hacking campaign that specifically targeted at least 7 Taiwanese chip firms over the last 2 years. This campaign was “aimed at stealing as much intellectual property as possible, including source code, software development kits, and chip designs.”
“CyCraft concedes it can't determine what the hackers are doing with the stolen chip design documents and code. And the more likely motivation of the hacking campaign is simply to give China's own semiconductor makers a leg up over their rivals.”11
This is a national priority for China as semiconductors are now among their most critical technology bottlenecks. “Semiconductor Manufacturing International Corporation (SMIC), the country's largest chipmaker, remains stuck anywhere from three to five years behind industry leaders Intel, Samsung and TSMC, according to Triolo, of Eurasia Group.”12
Three to five years is a very long time to be behind in technology years. So this is leading to even more global dependence on the giant Taiwan Semiconductor Manufacturing Company (TSMC). So let me explain the fascinating world of the Chip industry.
The Chip Industry=Taiwan:
“There are two types of semiconductor manufacturing companies in the chip industry. Some (like Intel, Samsung, SK Hynix, and Micron) design and make their own products in factories that they own.
There are also foundries, which fabricate chips designed by consumer and military customers; TSMC is the largest of these in the world. The chips that TSMC makes are found in almost everything: smartphones, high-performance computing platforms, PCs, tablets, servers, base stations, game consoles, internet-connected devices like smart wearables, digital consumer electronics, cars, and almost every weapon system built in the 21st century. About 60 percent of the chips TSMC makes are for American companies.”13 “In short, TSMC is the best chipmaker in the world, no matter what vector of performance you care about.”14
TSMC had a dominant 50% market share in 2019. Another big Taiwanese Chip player United Microelectronics Corporation’s (UMC) has 7.5%. If you include some of the other global players who also have microchip fabs in Taiwan, Taiwan’s centrality to this industry becomes very clear.15
For those who are fans of “Dune”, Taiwan is the new “Arrakis”, a place that is the only source of a material critical for everything! In this modern case, Microchips replace the Spice.
Ben Hunt goes on to say:
“There is no future where the United States can both maintain its existential national interests and allow the world’s principal supplier of semiconductors to come under the direct political control of China.
And there is no future where China can both maintain its existential national interests and allow the world’s principal supplier of semiconductors to remain outside its direct political control.”16
Net Net: If Artificial Intelligence is the next BIG strategic initiative for all world powers, Taiwan has become the linchpin in the global AI Arms Race.
As a business person and biased Taiwanese- American/Canadian, it is critical for the United States and western countries to ensure the future of Taiwan’s independence against China’s growing belligerence. Look no further than at China’s despotic acts in Hong Kong or Xinjiang to be concerned. “The West probably would like to help protect Taiwan not just geopolitically, but because of this technical prowess and technical capacity there," said Brad Swanson of the American Enterprise Institute.
Strategically, the USA needs Taiwan, as much as Taiwan needs America’s military and economic support. From an Information Technology perspective, Taiwan has always been a crucial piece of the consumer technology industry (PCs and Laptops). Just think back to the delays in the supply chain caused by the major earthquake in Taiwan back in 1999.
Taiwan has now become even more central, with the growing importance of Microchip manufacturing.
Investment Analyst Gavin Baker states:
“Modern semiconductor manufacturing is at least as important to the economy as oil was in the 1970s — at least in the case of oil, it was available all over the world albeit at higher prices than in the Middle East. If the overwhelming majority of leading edge semiconductor manufacturing is concentrated in Taiwan with the rest in South Korea, then the geopolitical implications are significant as there is no cost curve with leading edge semiconductor manufacturing — either you can do it or you cannot. It would be as if the Middle East was the only place in the world with oil rather than simply the region with the lowest costs.”17
It is quickly becoming the next flashpoint between China and the United States as it was in 1949. If the United States does not prioritize Taiwan’s independence and defense, they will be undercutting America’s own long term national security, economic and military interests but that of much of the democratic countries in Asia and Europe as well.
Big Thanks to John Lanza and Jason Scott for their valuable feedback and helping me get this to readable form.
Sources:
(Source: Kai-Fu Lee on the Future of AI in the United States and China)
(Source: https://www.theatlantic.com/magazine/archive/2020/09/china-ai-surveillance/614197)
(Source: The AI Arms Race in 2020. The UN says we have entered… | by Matt Bartlett | Jun, 2020)
(Source: China's Artificial Intelligence Surveillance State Goes Global)
(Source: Intel admits another defeat with unprecedented manufacturing issues)
(Source: U.S. moves to cut Huawei off from global chip suppliers as China eyes retaliation)
Steve Blank
(Source: China's top AI chip unicorn to raise $368m in Shanghai debut)
(Source: China hires over 100 TSMC engineers in push for chip leadership)
(Source: Chinese Hackers Have Pillaged Taiwan's Semiconductor Industry)
(Source: TSMC walks tightrope between US and China as Intel falls behind)
(Source: The Chip Wars of the 21st Century)
(Source: Chips and Geopolitics)
(Source: TSMC is outperforming the shrinking foundry market)
(Source: TSMC is outperforming the shrinking foundry market)
(Source: Investing Mistakes, Chapter 1001. Investing is a difficult, humbling… | by Gavin Baker | Aug, 2020)
Marvin’s Best Weekly Reads August 30th, 2020
“At the end of hardship comes happiness” — Korean saying
This is an Amazing tweetstorm. Josh Waitzkin is one of the most brilliant individuals around. Here are some of his mental models.
https://mobile.twitter.com/george__mack/status/1292206014746558471
2. Talk about a rags to riches story. Love reading these kinds of immigration stories.
“In the local real estate rags, Lo is a misfit in a sea of manicured headshots.
He sports a jet black, Elvis-like pompadour, ostentatious spectacles, and bespoke pinstripe suits. He poses in outrageous positions. He plasters his full-page ads with slogans like “I caught a fish!” and “Wild and scary good!”
But if you take a look at the sales records of all those mansions, you’re likely to see his name.
Over the past 4 decades, Lo has sold nearly $6B worth of houses in the San Francisco Bay Area. Last year alone, his sales volume topped $347m — good enough to rank him in the top 5 broker-owned firms nationwide. In the process, he’s helped reshape the demographics of some of America’s priciest neighborhoods.
Who is this guy? And how did he rise to the top of one of the most competitive real estate markets in the world?”
Silicon Valley’s eccentric real estate king
3. This shows how broken the programmatic ad world aka adtech is. And at the expense of the advertisers and news publishers too.
https://www.wired.com/story/she-helped-wreck-the-news-business-heres-her-plan-to-fix-it/
4. The Toy company no one knows about. MGA. Amazing.
“In 2001, MGA encountered their first massive success with the launch of Bratz Dolls. In 2006, they acquired Little Tikes (makers of this thing). And in 2016, they launched the one-and-only L.O.L Surprise! dolls.
I’m guessing MGA has been doing $5–6 billion in revenue per year for the last few years, driven almost entirely by LOL dolls. Given that the US toy industry is relatively small (~$27 billion), it’s insane that MGA has captured such a big percentage of market share.”
“Today, there is more IP that exists in a transmedia way. Some obvious examples include Marvel and Pokémon. Less obvious examples include the Kardashians, the Hype House, Sesame Street, hit Roblox games, and Miquela. The characters we know and love can live on many platforms concurrently.
We familiarize ourselves with these worlds, and we watch narratives play out, to some degree, with our own time and space. Increasingly, we are also able to interact with them on “metaverse” platforms such as Roblox, Fortnite, and Niantic [games].”
“Insane Companies No One Talks About” Episode 2: MGA Entertainment
5. Robinhood doing very well. Interesting business model that does not totally fit its name.
“The pandemic forced millions of future Robinhood customers home to shelter in place, free from diversions like sports and armed with fast internet connections and free money from the government.
The result was unprecedented growth for the upstart brokerage. Robinhood now has more than 13 million registered customer accounts, nearly as many as venerable Charles Schwab, which after 49 years has 14 million funded accounts, and more than twice as many as E-Trade, with 6 million accounts.
“The secret sauce of Robinhood’s success is something its founders are loath to publicize: From the beginning, Robinhood staked its profitability on something known as “payment for order flow,” or PFOF.
Instead of taking fees on the front end in the form of commissions, Tenev and Bhatt would make money behind the scenes, selling their trades to so-called market makers — large, sophisticated quantitative-trading firms like Citadel Securities, Two Sigma Securities, Susquehanna International Group and Virtu Financial. The big firms would feed Robinhood customer orders into their algorithms and seek to profit executing the trades by shaving small fractions off bid and offer prices.”
6. “We’re no longer dealing with a world of scarcity, where exchange economies are the default way we assign and trade value. This is an environment of abundance. There’s no material scarcity or friction at work here, but there’s still a lot of work to do. And so a new value model emerges: gift culture. And with it, a really good metaphor for how we develop and share knowledge on Twitter: “Homesteading.”
“Abundant environments may surprise you: even though they’re lacking in material scarcity or literal friction, there’s still plenty of work to do. It’s just a different kind of work: the work of dealing with complexity, clarity, curation, and especially synthesis. The effort and value being traded here lend themselves far more naturally to a gift culture economy, which is still very much an economy. It’s just not a transactional one.
The other obvious kind of work to do in an abundant environment, of course, is achieve and maintain positional scarcity. Status is clearly scarce, and in a gift culture like the free software community — or on Finance Twitter — the way you earn status is by putting in real effort, and then giving away the fruits of that effort.”
https://alexdanco.com/2020/08/21/homesteading-the-twittersphere/
7.“At YouTube, Pappas was, in part, responsible for scaling massive, worldwide growth, but at TikTok she is tasked with the opposite: Take a Chinese-owned product and tailor it to U.S. consumers, which, regardless of TikTok’s current quagmire, she’s unquestionably done. In November 2018, the month Pappas started, TikTok reportedly had 20 million U.S. users, according to Wallaroo Media; today, that number is 100 million. In the six months from October 2019 to March 2020, monthly users nearly doubled.
She might not be an influencer or a creator, but Pappas is influencing and creating. The future of technology. The future of social media. The future of how Americans connect…or don’t. The future, period — no matter where that might lead her or where she might lead it.”
https://www.marieclaire.com/career-advice/a33485889/tiktok-vanessa-pappas-interview/
8. Culture is the most important thing in companies. Organizational Leaders should be aware of this & actively shape it.
“It has been said that “culture eats strategy” and often when companies decay (Wells Fargo) or resurrect ( Microsoft) or have distinctly different outcomes in the same industry ( Southwest versus United Airlines) a key determinant is the culture. What it is like, how it is improving or how it is getting worse.
Once I read that the culture of an organization is revealed in how people behave when no one is looking or monitoring their behavior.
I do believe that this is right in the fact that culture is about people. Yes it requires leaders to set, correct and support the culture but it is how they treat people and how people feel about themselves, their company and their colleagues that is the fabric of culture.”
https://rishad.substack.com/p/leadership-culture-and-libraries
9. Great thread on an unknown but super impressive investor.
https://twitter.com/APompliano/status/1297666709944512514
10. “The role that eCommerce has played in consumer habits over the last six months doesn’t really validate anyone’s eCommerce ambitions but instead creates opportunities for more customers to be exposed to janky, half-baked online selling solutions because of a pandemic. (Shopify, AGAIN, is there to make sure these experiences are not bad!)
The chances for a business to lose customers online has never been higher. And while the TAM for many businesses has expanded on paper, never have physical-turned-online sellers had so many unhappy and desperate customers sent their way.
So as the economy normalizes, we’re going to see millions of consumers faced with a simple question: do I want to go back to my old habits or keep my new ones?
The answer to this question is the biggest threat online sellers have faced.”
11. Good discussion on the tech press in America & the lingering after effects from dominance of the big platforms.
“I think there are three algorithms that have reshaped the American press in ways that we are just now starting to confront. You have Google and Facebook, which can serve up this incredible fire hose of traffic to publishers so long as they cater to the ever-shifting whims of that algorithm.
And that has just resulted in a lot of really cheap-to-produce content like “what time is the Super Bowl” and “John Oliver destroyed this industry last night. Here’s the clip.” And all of that stuff is mostly harmless, but it has robbed publications of their individual identities. So, every website is just a version of every other website, and I think that has kind of undermined trust in the press generally because there’s just kind of a sameness to it.
Then, the third algorithm is the Twitter algorithm, where in a world that is full of calamity, only the sort of noisiest, most scandalous, most outrageous stories break through. And because that’s where reporters are hanging out all day, and where they’re flogging their stories, I do think that that has led all of us to underline the elements of scandal and outrage in everything. And that has a wearying effect.”
12. Some big changes happening in the media space.
“A new class of content creators has emerged that is writing, recording, filming, and producing incredibly unique and compelling media and then connecting directly to audiences to showcase and sell their creative products. I call them Digitally Native Vertical Creators or DNVCs. And just like their retail DNVB counterparts, DNVCs are also building off a new wave of technology platforms that have democratized access to capabilities across the entire media product lifecycle for this new breed of content creators.
To run a creative business today, Digitally Native Vertical Creators (or DNVCs) have to manage far fewer things than traditional media creators of yesteryear because they can turn to a variety of enabling platforms to do those things for them.”
New media platforms are enabling a new creator type: Digitally Native Vertical Creators
13. Exciting times.
“The rise of the micro LP should result in the need for more GPs. And more GPs should mean more funding for entrepreneurs. It will create a virtuous cycle of sorts.
It will take awareness and education before serious dollars flow to venture but I suspect in 2030 the number of accredited investors with an allocation to venture will be far higher than 3%.
The next decade is sure to be an eventful one for founders, solo GPs, and micro LPs.”
https://thecuriousinvestor.substack.com/p/rolling-funds-and-the-rise-of-the
14. “Overall I don’t think the underlying desire to become financially independent is going anywhere. In fact, I think people may become even more interested in taking control of their money and time after living through this difficult situation.
While I don’t think FIRE is going away, I do think it will change.
Short-term it’ll be harder to FIRE given the market and overall economy. But long-term my guess is that we’ll see some positives come from these hard times. I could see things changing in a few ways which all are positive:
Financial plans get dusted off: Most people roll their eyes when they think about creating and maintaining a financial plan. I suspect even many FIRE people have let their plan sit idle for a while. The downturn will push more people to create a financial plan and get back to basics when it comes to money.
Making money online will boom: The combo of job losses and everyone being cooped up at home will lead to a lot of lucrative new online businesses being created. More people will realize that creating a life changing business online is within reach.”
15. “While many companies get ahead of themselves, often targeting partners based on name or site traffic, they do not agree on broader standards to evaluate the opportunities that exist in market on a fully loaded cost basis (hint: cost does not just mean money). This is classic measure twice/saw once.
Agreeing on standards ahead of time and socializing this evaluation will save you downstream headaches and conversations, both internally (“why did we partner w/ X when it only yielded Y”) and externally (“why is this not performing like you told us it would”).”
https://medium.com/@hoff/how-to-do-bd-right-cc7b31664513
16. “In my view, however, the business of influencer bundling has only just begun. Curators are the new creators, and as consumers, we’re going to be willing to pay someone with good taste to help us sort through the ever-growing mass of information at our fingertips……..looking at the current information overload we all face on a day-to-day basis, I think there’s room for a new market of creators as curators.”
https://femstreet.substack.com/p/curators-are-the-new-creators
17. I am always impressed by what I see in the tech ecosystems of Nordic and Baltic regions. Maximum bullish here.
Diving into the Nordic and Baltic 2020 Venture Capital Landscape
“Moskovitz, 36, who is worth $14.2 billion, is best known as cofounder of Facebook with Mark Zuckerberg. He was the world’s youngest billionaire for a few years starting in 2011. But for the past dozen years since he left the high-flying social network, Moskovitz and his Asana cofounder, Justin Rosenstein, 37, have been lying low, quietly toiling behind the scenes to solve an age-old problem: how much effort we waste in the meta-work around work.
“We were just kind of shocked and frustrated at how much of our collective time was going toward trying to establish clarity and getting everyone on the same page,” Moskovitz says in a recent video call.
Today Asana’s software is used by employees at more than 75,000 companies including AT&T, Google and NASA to help them take back control of their days by managing everything from writing a memo to planning an event. (Soon its AI-powered app will even set agendas and suggest ways to make workdays more efficient.)”
18. I really like this. It’s hard not to feel like you are stagnating when you are stuck at home for months on end.
https://www.linkedin.com/feed/news/how-to-stay-forever-employable-4194585/
19. “I was interested, I said, in his life, which was marked in equal parts by tragedy and luck, populated by a gallery of figures — Richard Feynman, Philip Glass, Joseph Campbell, Forest Whitaker, Steven Spielberg — too numerous and random to fully list.
I was interested in his work too — as a creator (of video games, VR, facial-recognition software, medical-training devices), as a thinker, and as an author of four acclaimed books in the past decade about the promise and perils of technology, books that suggested he might be the last moral man in Silicon Valley.
At a moment when our tech overlords seemed bent on consolidating power and taking over whatever parts of our lives they hadn’t already taken over, Lanier — a tech insider who has been part of the industry for nearly as long as the industry has existed — had chosen instead to speak out against his peers and to suggest a different, more human logic for how they might treat the rest of us.”
https://www.gq.com/story/jaron-lanier-tech-oracle-profile
20. “Is San Francisco as a tech capital over?
There are clear short-term headwinds. Pre-Covid real estate costs in California, and San Francisco, were very clearly acting as an increasingly dissuasive force for either tech companies expanding in the region or new companies located there. All the major Bay Area tech companies had either relatively shifted hiring outside the Bay Area, or, in some cases, ceased net hiring in the Bay Area, and most of the expansion was happening elsewhere.
Overall, however, my expectation is it will return to the trend
where the Bay Area is a major locus. Human capital network effects and the benefits of agglomeration are just so strong.
At the same time, the longer-term outcome is less clear.
San Francisco has somewhat analogous long-term headwinds [with] its version of the local challenges from property prices, and then somewhat similar dynamics and international competition as other people just get good at building technology companies. But I think that’s going to be a multiyear, multi decade story. My expectation is that in 2022 to 2023, its relative position is not really that different. You don’t get many retweets for that, I know.”
21. “If you want to improve your productivity, everything should be focused on earning more. You shouldn’t focus on “learning” as you will end up going down the rabbit hole of meaningless factoids that are not applicable. The way to focus on earning is by aligning everything you do to either 1) building a reputation or 2) generating a profit. Most people ignore the first step & just want to make money “now now now”. Well, in order for people to trust you… Value needs to be added & a reputation needs to be built. The “freemium” model is one of the best ones to follow if you’re a newbie.”
“If all of the above seems mean or intense, you’re probably not going to make it in life. We’re not here to lie to people. If you cannot keep yourself accountable it just means you’re not interested in improving.
Successful people don’t day dream about scenarios that are unlikely. They don’t need hand holding to get started. They don’t ask questions that they can answer themselves in a few minutes. They don’t burn tons of time with entertainment. When you’re set for life you can increase the amount of entertainment (since you are no longer in the accumulation stage of life). Until then, best to focus on productivity.”
https://wallstreetplayboys.com/significantly-improving-personal-productivity
The “Rise” & The “Grind”
I remember coming into the office every day to an electric environment. So much energy, surrounded by super smart people. Everyone was excited. Crazy busy but excited. Hours felt like minutes. The feeling of tremendous growth and momentum. The promise of a bright future.
Contrast this with the “Grind”, where growth and momentum has disappeared. And regaining momentum is VERY hard. Just ask any startup or big company where this has happened. Turning this around is brutal. You are coming into the office where everyone is tired or worn out. You are in survival mode. People you respect are leaving for other places. You dread coming into work because you know there is probably more bad news. Or that you have to fix so much stuff that’s broken due to “startup debt.” This is the cultural, the organizational and technical issues that were overlooked during growth.
I was very fortunate to experience both in my career multiple times. The “Rise” at Alibris from May 1999 to September 2000 where we went from 18 people to 150 people. The “Grind” from September 2000 to February 2001, when we went to 110 people with the first lay off due to the Dotcom Bubble popping. I did not survive the 2nd culling which happened at the end of January 2001 where the company went down to like 75-80 people. Lesson learned, first things that get cut are marketing and customer service roles.
I experienced the “Rise” at Yahoo! Inc from 2001-2008 at the company overall and for my specific business group and region from 2008-2011. Unfortunately, what I learned here was that even if your P&L (Profit & Loss) of your Business group was great, it did not matter when the rest of the organization was in free fall. Yahoo!s nadir really started around 2009 with the loss of a tremendous amount of top talent at all levels and groups. It’s really tough when so many smart friends you have worked in the trenches with end up leaving. Looking back in retrospect, the end of Yahoo! was clear back in 2009. I remember the loss of momentum, and painfully low level of energy vividly whenever I was in our HQ in Sunnyvale. This was a MASSIVE contrast from my first 7-8 years there.
3rd times the charm right? I joined 500 Startups when we were ~30 people and saw this place boom to 150 people by mid 2017. This corresponded with a crazy amount of startup investment activity. Incredible time. All the learning, excitement, growth, surrounded by smart mission driven folks. Well, then mid-2017 hit and we were in survival mode. Those “Grind” years were really tough & stressful. I admit that. I am still processing this even after 9 months being out of the place. (This is why “Fallow Time” is important)
Both of these kinds of experiences are important to your career. You learn so much when a company scales quickly (and usually poorly). Most people are not lucky enough to see such crazy fast growth in their career. It’s like drinking from a firehouse. And it’s why you see people jump around to different companies and chase this growth throughout their careers. It’s not just about monetary rewards, although that is a very possible outcome. It’s about the excitement, the learning and fun from working with the tailwinds behind you.
But i would argue you probably learn as much from the “Grind” too. Maybe even more. You learn what you are made of. You learn what your values are and “What” matters to you. And as an executive you see all the things broken that were ignored during the high growth years and then you have to fix them. I don’t respect people who don’t stick around during the tough times to try to make things work. It shows a lack of commitment.
On the other hand, don’t do what I do and stick around much longer than you should. Loyalty only goes so far and you don’t want to go down with the ship. From a career perspective, you risk having your brand tarnished by staying at a sinking company too long.
This is where the “Goldilocks principle” comes into place: the “just about right” point in time to leave. This is something I have gotten wrong several times. And this is not a dig at any of these companies. Sometimes you just are not a fit anymore for where the company is going, or you are just too tired or burned out. And other times the company is also clearly toast and you see the writing on the wall. So take action accordingly and move on.
Startups, Do the Foundational Work: Taking Shortcuts Cut You Short
What drives me crazy is all the crappy advice and articles out there sharing hacks for startup growth. Growth is great but it needs to be built on strong foundations. Speed and a sense of urgency is definitely important.
Yet to really make this work you need to be systematic at the same time. There is a ton of homework to do. This includes Insight development, doing customer development and building. And it takes a long time. Every founder talks about Product Market Fit. But in my experience I've never seen a startup hit this Product Market Fit point faster than 2 years. It takes a LONG time to get here.
I can’t tell you how many startups I’ve met who have grown to $100k or $150k in MRR but yet still have no idea who the “Ideal Customer Profile” is, have not set up analytics or which channels work best for them. It’s like driving a car with a blacked out window and without a steering wheel. No surprise this is when the business eventually stops growing and stalls out. Or worse, goes in reverse as customers churn. There is little they can do because these founders have no idea what the drivers of their business are.
I liken building successful startups to that of building Skyscrapers. We had a lot of them being built in Vancouver where I grew up. It would be a year or more while the sand and concrete foundation was being compacted into the ground. But lo and behold, once the sand was removed and the foundation was set, the metal frames went up. Within that next year, an entire 5-10 story building was built and completed.
This is exactly the same process that my best founders go through.
They are systematic.
They do the groundwork of development insights and deep knowledge about their customer and their market.
They learn the main drivers of their business.
Sustainable growth is the consequence.
PLEASE BE THIS KIND OF FOUNDER!