It’s A Great Time to Be Alive: Opportunity is Everywhere
It’s so easy to be gloomy about the state of the world these days. War in Europe and the Middle East, economic recession, deglobalization, job loss, a breakdown of law and order. It’s a scary time.
But there I saw this amazingly illustrative series of tweets by @leadspacer:
“There have never been more opportunities to live the life you want if you are clever enough.
Most of the things we are told we should be concerned about don’t affect us.
With all of the fragmentation taking place in the world right now, it's an opportunity for adventurous risk takers to make huge strides.”
“In great chaos lies enormous opportunity.”
This is all spot on. With everything changing, there will be massive new problems and consequently big opportunities to fix and solve this. It’s an amazing time to be a builder. You can leverage all the amazing technologies and marketing tools that are coming out. Just look at the software tools or ChatGPT or even AutoGPT.
Additionally, there is so much knowledge and expertise that you can access through online classes, podcasts or even just on Youtube alone. You can learn from the best and have it all at your fingertips via your PC or mobile phone.
So don’t be too worried by the scaremongering media headlines. It is scary and bad things are happening. But also remember that you have agency and control of your mindset. You have an opportunity to make things better around you, by providing the services and products that are needed.
If you provide true value to others in the world and approach life as being in service to others, you will be rewarded monetarily and spiritually. That is one thing that has not changed and will never change in the world.
Maximum Bullish: Travels to Ukraine
After a long hiatus due to the barbarian Russian invasion in 2022, I finally made it back in September 2023 for the excellent Lviv IT Arena tech conference. The event for tech startups in all of UKraine. It was excellent and full of positive energy and optimism.
I’ve been coming to UKraine since 2007 and I’ve witnessed an amazing transformation of the country over the last almost 20 years. And I can tell you I’m even more bullish on this country and the people than I ever have been. I love this country.
The number and high quality of excellent tech people has been a badly kept secret for the last decade in tech circles, providing the tech back end for great companies like Ring, now part of Amazon, Grammarly. Also, talk about home grown giants like Genesis, Readdle and McPaw of CleanmyMac fame, this was a tech startup center in the making. The trajectory was incredible especially since 2015 when I came back after Maidan in 2013.
Unfortunately the war has massively disrupted this and caused mayhem. But like the resilient people that they are, Ukrainians are using their intelligence and creativity to keep building. Founders in Silicon Valley have no idea of the challenges these founders face and overcome every day.
Random missile attacks against civilian targets, having to work underground in bomb shelters, having team members called up or volunteering for military service on the front line to defend their country against a vicious enemy. An enemy determined to stamp out their way of life and culture. Yet they keep going without complaint.
I admire them so much and I feel so guilty that I can’t do more than I do now. That I did not sign up for the Ukrainian Foreign Legion to kill Russian invaders or do something beyond donations and charity.
Remember, Russia invaded Ukraine. This is the most black and white, good versus evil situation since world war 2. There is no gray here.
And my guilt also bleeds into massive hate for pro Putin supporters or those who try to undermine support for Ukraine. The hard right GOP, Vivek Ramaswamey, David Sacks, Scott Ritter, Douglas Macgregor, Tucker Carlson are absolutely traitors to America & the West as well as being useful Idiots to Russia. You are either part of the solution or you are part of the problem. History will judge them all very severely. May these people burn in hell.
But I say this now, when this war is over, I cannot wait to move over and help grow this tech ecosystem and rebuild this country to something amazing. The actual trajectory and destination that it was on before Putin engaged in this awful war. The amount of brilliant people who left the country will come back with their networks and knowledge. The middle class professionals who volunteered and fought off the barbarian Russians will not tolerate going back to a corrupt oligarchic system. And the world will be admiring and supportive as they rebuild Ukrainian infrastructure and integrate them into the EU.
I’m obviously biased and apologize that this has turned into a personal rant but I am massively and maximum bullish on this country. My radar tends to be pretty good on this stuff, especially emerging companies and emerging countries. So support and watch Ukraine. Slava Ukraini!
Marvin’s Best Weekly Reads November 12th, 2023
"It is not the strength of the body that counts, but the strength of the spirit." ― J.R.R. Tolkien
"Everyone thinks they are being discriminated against and that the world is “unfair” to them.
Instead of wasting your time complaining about reality, just recognize reality and play accordingly.
At the end of the day, the buyer determines the value, not the seller.
If you are selling a house, you cannot complain that “people should not care about the broken walls and leaky roof”. The buyer decides what he cares about in the house he buys.
In life, you are selling yourself and you have to go work on what the buyers consider valuable. It’s that simple."
https://lifemathmoney.com/men-are-success-objects-and-women-are-sex-objects/
2. "Instead of underwriting to the idea that some other investor will understand these companies and mark them up, we find ourselves underwriting increasingly to at least one of two other things: (1) breakeven and/or (2) our own convictions. Either a company has a path to get to sustainable growth on its own or it has the ability to achieve milestones such that we ourselves will be able to continue to support them in their growth path — with or without other investors.
Unlike Sam, however, we are not completely convinced that the venture factory is completely shut down. We do continue to occasionally find a company where we think the next step is likely a traditional Series A. It’s just that we increasingly find ourselves backing companies that are building optionality around other pathways to success.
I want to be crystal clear: we remain convinced that now is the best time in recent memory to build a large multi-billion dollar business from the seed stage. That is why we are here — and we continue to see companies that meet that bar. What has changed is not the scale of potential outcomes. What has changed is the way the pathway from seed to huge exit might look. The whole entrepreneurial journey will be far more artisanal and less factory-like."
https://medium.com/angularventures/the-end-of-entrepreneurship-by-autopilot-de4a068b5d0f
3. "Understanding the average net worth by age and how it changes is more than just a financial exercise—it’s also a way to gauge your financial health in the context of your peer group. While the average net worth figures shown above can be skewed by outliers, looking at the distribution of outcomes—and particularly the median—can offer a more relatable snapshot.
Regardless of whether you are at the 25th percentile or the 90th percentile of the wealth spectrum, it’s crucial to remember that these are just benchmarks. Your financial journey is yours alone and will be influenced by a variety of factors such as career choice, inheritance, and luck."
https://ofdollarsanddata.com/average-net-worth-by-age/
4. Xi has squandered China's potential. Well, kind of like the political class in USA but much worse.
"In less than five years, the Party has hobbled industries that once supplied tax revenue, jobs, inspiration, and global stature. For a generation, the Party found ways to put practicality ahead of ideology. “It doesn’t matter if the cat is black or white,” Deng said, “as long as it catches mice.” In the Xi era, that principle has become, in effect: It doesn’t matter if the cat catches mice, as long as it’s red.
For all of China’s ambitions to greatness, it faces a consuming struggle to restore the trust and vigor of its own people. The stagnation could pass, as it did for America in the nineteen-eighties, or it could deepen, as it did for the Soviet Union during the same years."
https://www.newyorker.com/magazine/2023/10/30/chinas-age-of-malaise
5. "There is no chance of a rate cut any time soon. As long as unemployment is below 5% or so, there is absolutely no shot of rates being cut. Also. If you look at the commentary he says “over the coming quarters” this suggests the fed is planning to keep rates elevated or even raise them if they don’t get the results they want.
All year we’ve basically said the same for the majority: 1) short term t-bills for your future down-payment and 2) crypto on the other side BTC/ETH ($25Kish and $1,600ish as proxies)."
https://bowtiedbull.io/p/end-of-the-long-cycle-print-or-dont
6. I don't agree with this guys views on Ukraine or his generally anti-Pax Americana view. BUT he has a very good view on global macro.
"And the end game, when yields get too high, is for the Fed to end all pretence that the US Treasury market is a free market. Rather, it will become what it truly is: a Potemkin village where the Fed fixes the level of interest at politically expedient levels. Once everyone realises the game we are playing, the Bitcoin and crypto bull market will be in full swing.
This is the trigger, and it’s time to start rotating out of short-term US Treasury bills and into crypto. The first stop is always Bitcoin, then Ether, and finally my beloved shitcoins. I’ll start small in case I’m wrong, but you can’t sit on the sidelines forever waiting for the perfect setup. The perfect setup is usually staring you right in the face, and you are just too preoccupied with the past to notice."
https://cryptohayes.substack.com/p/the-periphery
7. "We won the first Cold War. And 2022 was a good year for the U.S. and its allies — we set Russia on the back foot in Ukraine, while China’s economy was weakened by Xi Jinping’s mistakes and by the contradictions in its system. But the authoritarian powers — or the continental powers, or the New Axis, or whatever you want to call them — are not out of the fight.
The expansion of proxy conflict to the Middle East, a region where the U.S. lacks strong dedicated allies and moral authority, is bad news, because it threatens to bog American resources and attention down in a conflict far away from the all-important theater of Taiwan and East Asia.
So I think the framework of Cold War 2 isn’t just a useful way to make sense of the blizzard of news right now — it’s a reason for alarm, and for getting serious about addressing the external threats. This is not a situation in which our usual political divides and ideological differences should take precedence."
https://www.noahpinion.blog/p/a-lot-of-what-you-see-in-the-news
8. "If you haven’t fundraised before or your last fundraising experience was in the Good Times™ of 2020-2021, expect to have a very different experience than what you’ve read about or previously experienced. VCs are still looking to cut checks, but they’re slower moving and more cautious than during times of heightened activity.
Be prepared and stick to the basics. It might take extra work to overcome their inertia, but if you come correct you’ll get the result you’re looking for."
https://chrisneumann.com/blog/the-adrenaline-of-vc-deal-flow
9. "Part of the premise for the rise of seed VC funds in the late 2000s was that cloud computing, other technical innovations, and lean startup thinking meant that startups could get to validation points earlier. Many articles were written about how we would see a generation of capital-efficient startups that would do more with less as a result. This capital-efficient ethos never really took root as it happened to coincide with an unprecedented explosion in the venture ecosystem's access to capital and historically low interest rates. There was no need to be capital-efficient in an era of capital abundance.
With the era of capital abundance coming to an end, the stage might finally be set for the era of the capital-efficient seed stage company. Seed-stage startups are likely to confront a world in which raising Series A rounds of investment remains difficult for quite some time. There will be a premium on execution and doing more with less capital. The necessary pieces might finally be in place to push companies back toward the hoped-for levels of capital efficiency.
There will be money for our very best companies. However, This change opens space for us to look at companies where a seed and pre-seed round will give the company the money it needs to become a high-growth company with minimal go-forward external capital needs. This is not about finding small, break-even companies that don’t build to scale. This is really about making sure we find companies where we are aligned with the founders on the long-term capital needs of the business. Those who have joined me on pitch calls of late have probably heard me ask this question of the founders who pitch us."
https://chudson.substack.com/p/the-big-reset-in-seed-to-series-a
10. "Being long-term bullish on crypto is a bet on the following: gambling, degeneracy, greed and desperation. Seems like a pretty easy yes from us. The most important part is staying in the game for a long time and rotating into more risk when you see an opportunity. That is the core working thesis."
https://bowtiedbull.io/p/history-of-crypto-cycles-etfs-and
11. Eric is a friend and this was an excellent interview. So many nuggets of insight. Recommend his books.
https://www.youtube.com/watch?v=2mAL_aQqWMQ&t=1939s
12. Masterclass from one of the best tech investors on the planet.
https://www.youtube.com/watch?v=cnDrFBzRfgc
13. Impressive young man. Makes you question your own momentum and ambition level.
https://www.youtube.com/watch?v=46903vxfn-c
14. "Russia is often portrayed as the invincible military power. And yet, this reputation is based on two wars - Napoleonic and WWII. In both cases Russia won only thanks to the alliance allied with *the* leading economic powerhouse of that era.
Napoleonic Wars were won because of the Russian alliance with the UK. WWII - because of the alliance with the US. In both cases the leading economic, industrial and technological power of the age supported Russia, giving it almost unlimited credit and supply line."
https://kamilkazani.substack.com/p/why-russia-cant-win-against-the-west
15. "Eventually what I decided to do was try and show just how a supply based campaign would be the most effective thing for Ukraine, by talking about the issue of ammunition supply for Russian artillery—which has received a great deal of coverage lately. Long story short, if Ukraine could damage/destroy even a relatively small percentage of the ammunition heading to Russian guns, it would make an outsize difference in the war in 2024.
This is because Russia is not actually a great economic power and is generating relatively little new force (this is also true for tanks and other armored fighting vehicles and artillery pieces). Basically Russia is using and losing far more equipment than in can replace on an annual basis."
https://phillipspobrien.substack.com/p/what-is-the-way-forward-in-a-war-777
16. "While most Christians would say the devil is the best liar in the world, I think the best is the person in the mirror. Self-delusion is perhaps the most challenging aspect of attempting the fuller lifestyle. Avoiding work because you're being negligent and avoiding work because you are achieving balance look identical from the outside.
Getting this right means you have to be able to confront the full breadth of your weaknesses to ensure you aren’t being controlled by them. The hard part of living fuller, not bigger, is being honest with yourself. That there is no answer is the answer. You have to believe that you have the intelligence and grit to figure it out yourself."
https://every.to/napkin-math/live-fuller-not-bigger
17. "While Musk may not be in the business of convincing people he’s less capable, he is hurtling dangerously toward the classic failing of all great hustlers — playing outside of the odds that made him rich in the first place.
Musk’s successes — SolarCity, Tesla, SpaceX and Starlink (which has only recently hit profitability) — come from buying into or building companies that sell something, juicing their revenues and valuations by extolling bright futures of eternal growth, the kind that the market adores.
Anything that Musk talks about is automatically covered by the media, which is something that inherently boosts any company that actually sells something, because there’s a call-to-action at the end of whatever churlish statement he chooses to make. When motivated by greed, Musk can be incredibly effective, because there’s something (theoretically) valuable at the end — Elon Musk has endorsed this product, the product does this, and you should either buy the product or the associated stock.
Every product decision he’s made feels like every time I’ve seen a desperate man lose thousands at a craps table “trying to make his money back,” mumbling that he “has a system” as the dice seem to work against him with every roll. Musk’s playbook has always been to sell the sizzle - that you’re buying into the future of something, even if that future is murky and the something kind of sucks - but it hinges heavily on there being something tangible and “cool” to own.
Musk has ultimately made the biggest mistake one can in gambling or hustling — letting emotion take the wheel. Acquiring Twitter was never about making money."
https://wheresyoured.at/p/junk-bond-trader
18. "At hyperscale, the companies with the deepest AI exposure are enjoying faster growth rates as enterprise demand for these products accelerates."
https://tomtunguz.com/ai_reacceleration/
19. "Mining and processing graphite is an especially dirty business, and China doesn’t mind getting dirty when it can accumulate geopolitical advantages in the process.
The global production share chart for graphite is indistinguishable from countless others we have encountered over the decades. If a commodity is deemed critical and producing it is environmentally taxing, China inevitably comes to dominate it."
https://doomberg.substack.com/p/geopollutical-warfare
20. Always enjoy these conversations. Why do founders stay in their company even after F-- You money.
https://www.youtube.com/watch?v=bBE0eDh8CNk
21. "RAADfest’s opening keynote speaker—and a big reason why I am here—is Bryan Johnson, a wealthy tech entrepreneur who has lately become an object of media fixation, owing to his colorful Twitter presence, absorbing diet and fitness regimen, and the fact that he spends most of his time and money on his attempt to live forever. To do so, he has created “Blueprint,” an algorithm using data about Johnson’s various organs that recommends protocols for his health, diet, and fitness.
Johnson is a big deal for the immortalist community. He is a lot younger and richer than most of the other RAADfest presenters, and due to a series of recent articles in The New York Post, Bloomberg Businessweek, and Time Magazine, he is kind of famous. He gets recognized in public a lot. People say things like, “Yo, vampire bro! Can I get some of that blood?” Johnson loves this."
https://www.gq.com/story/raadfest-live-forever-or-die-trying
22. "But in recent years, it was his intense familiarity with those daily rhythms of his in New York City that made him realise it might be time for a major pivot. “After one too many days of doing the same thing, I just got this overwhelming sense that I was still playing the same hand of cards I’d had for a long time – but that I had a better hand to play,” he said. “I was living in this rental place that didn’t feel like home. I was getting the same bacon, egg, and cheese at the same deli. Resisting any lifestyle change.”
All the while, his circumstances had changed. He had grown older. The films were bigger. His profile was immeasurably larger. But he was holding onto something. Why? He had seen it up close in Hollywood. The man-child. The people who so loved playing characters that they played characters in their real lives, too, without actually transforming themselves into more mature human beings. He knew the cliché about celebrities staying developmentally the age that they were when they became famous.
But how is a beloved movie star meant to change the right way? How is he supposed to grow up? How does he meaningfully evolve his life and art without killing his core? This was the most important thing there was for Timothée Chalamet. It might be worthwhile to chart the course. “All I knew,” he said, “was it was time to level up.
It’s difficult to underscore how polar opposite the two ways Timothée Chalamet experiences time are. There are the long stretches during a movie production, during a press cycle, during a fashion campaign, when every minute is scheduled for days or weeks or months at a time. But there are other long stretches, in between the making of films and promoting them, that are seemingly devoid of time as we experience it, with infinite opportunities for developing a film character or developing himself.”
https://www.gq-magazine.co.uk/article/timothee-chalamet-cover-interview-2023
23. This is a good state of the seed vc investing market, I like the concept of inception investing rounds. Some very useful frameworks.
https://www.youtube.com/watch?v=lIx1vnNYj2c
24. "Where does that leave the magical 250m population figure in reality? For many business models, especially those which are common in more developed markets, the real addressable market is perhaps only 10.6m if we include all of Groups 3, 4, and 5. While still a $43bn opportunity, if we factor in the propensity and ability of different ages within those groups to adopt technology, the number may be only half of that.
To build a scalable consumer-focused business in a market like Pakistan requires novel business models and go to market strategies that must be highly localised to succeed."
https://sturgeoncapital.substack.com/p/how-big-really-is-250m-people
25. "Given another few years at this pace of innovation, it’s not unreasonable to expect blockchains to be cost-competitive to classical databases.
More than that, they offer different types of promises to developers for data sovereignty, mathematical proofs, resiliency, & resistance to attack.
It’s the gas gas revolution. As the gas costs fall, more applications will be built on blockchains."
https://tomtunguz.com/aws-eth-cost-reductions/
26. "The starting point is WiFi Money (Online Business).
Once you’re making money from the internet, you can quit and most of the other things in the “good life” list come pretty much automatically.
WiFi Money is the starting point to freedom.
All I can say is, I’ve worked for others and I’ve worked for myself, and I like working for myself far more."
https://lifemathmoney.com/how-do-people-live-like-this/
27. "But, failure to recognize that we are already in a worldwide war and that we can resolve it with innovation and generosity of spirit are equally serious problems. All this is a reminder of Winston Churchill’s book While England Slept and John F Kennedy’s take on the same period called Why England Slept. Amazon ought to get both up on Kindle asap! Both leaders warned us.
But, we sleepwalked into WWI and WWII and further conflicts from the 1960s. Are we sleepwalking into another such situation? Are we asleep when we should be awakened to technological possibilities (something Marc Andreessen calls “Techno-Optimism”)? We exited WWII through technology. The atomic bomb unleashed destructive power so great it ended war. Could we release a constructive power so great that it begins a new era that would be post-geopolitics? I want everyone not just to wake up, but to start dreaming about what the future could and should look like before it is too late. The task is hard."
https://drpippa.substack.com/p/wwiii-winning-the-peace
28. "A year ago, Netflix was losing 1 million subscribers per quarter and had shed 75% of its market cap. It was the worst performing stock in the S&P 500. Fast-forward one circumnavigation of the Sun, and Wall Street is “gushing” over its “beautiful” results while the rest of the industry flounders."
https://www.profgalloway.com/the-netflix-effect/
29. "The sweet spot is to find a strategy that works, which suits your temperament, and which interests you because…
Good investing is mostly ‘boring’ working with brief moments of excitement. I say ‘boring’ because the research process is boring to most people, but not to everyone. It is an endless loop of keeping up with the world and trying to understand things — a company, an industry, a trend, a technology, an event — by reading, crunching data, and talking to people.
Every once in a while, things get exciting. Like when you find a great idea or when the market punches you in the face. And in exactly those moments, you have to resist and remain calm. It’s the inverse of how most people go through life: they run from the grind of mundane work and throw themselves into thrills.
If the process of learning about companies and markets feels like keeping up with your favorite sport or celebrities, you’re ahead of the game."
https://alchemy.substack.com/p/11-things-i-learned-about-investing
30. "One thing should be clear: allowing price fixing to occur through shared software rather than an explicit agreement is not just a technological change — it’s a legal change. Indeed, judges are simply rewriting the law to legalize price-fixing.
When it’s extremely hard to bring a complaint because the burden is just too high for plaintiffs - as is happening in the Rainmaker case and potentially the RealPage litigation - judges have created a liability shield for corporations to collude. “Nobody thought you could win” is a devastating and avoidable sentiment in the face of clear and pervasive harm."
https://www.thebignewsletter.com/p/the-banality-of-price-fixing
31. "Every founder tells themselves a story about why they’re heading to the gold rush, but the executive coach I would eventually hire says there are really only two. Do you want to be rich, generating wealth in service of some further end? Or do you want to be king, with money a mere byproduct of trying to make the world the way you feel it should be?
At the time, I told myself I wanted the freedom of being rich. I thought I’d be able to recognize a winning hand fast or fold. Now, several years later, I’m still waiting for the river card that determines my fate. You could call me a middle-class founder: proprietor of a business you may or may not have heard of, tenuously wealthy on paper, by no means a failure but not yet a success, chugging along in the twilight of an era that minted more giants and more waste than any other in history, with no exit in sight.
Today, the market has turned for everyone. We’re growing slower than I want, but other start-ups, even the hot companies that dominated fundraising in past years, are showing far more signs of strain. Some have already flamed out spectacularly, and for those that survive, the gobs of money raised from megafunds come with a catch: It needs to be paid back first, which means that employees and early investors who expected millions won’t make any money unless they deliver on their tall tales.
The culprit is technically rising interest rates, but you could argue it began when founders and investors started to see the downside of swinging for the power law. The first venture funds formed as a way for savvy investors to help innovators create fundamental technologies like transistors, which required huge outlays of time and treasure before they could produce value. But in the past few years, causality inverted: Start-ups and entire markets were manufactured from whole cloth to meet the demand of overcapitalized venture funds searching for a home run.
At work, there’s some sense that we’ve missed the windfall, the easy IPO, the fairy godmother of acquisition that taps some lucky people and makes them rich. You’d think that would suck for morale. But from what I can tell, our team seems happy. What venture capitalists are now telling startups to do — forget “growth at all costs”, be profitable — is what we, partly by accident, have been doing all along. With the exception of the new wave of AI companies, the skies are full of Icaruses crashing to earth, but we’ve been here the whole time."
https://nymag.com/intelligencer/article/venture-capital-backed-startup-founder-confessions.html
32. "Taking all these factors together, one must wonder about the efficiency gains for a software company. Will it be 20% cheaper or even 50% less costly to run a software company? This will undoubtedly impact the costs, scalability, and efficiency of running a business. Will it lead to the creation of more software companies or result in more mergers and acquisitions? Will the market competition offset these efficiency gains?
The exciting aspect of technology and considering the future is that these advancements are inevitable. From the perspective of software companies, using AI to enhance business operations, not just the products they offer, will be an intriguing area of innovation over the next decade."
https://davidcummings.org/2023/10/28/ais-efficiency-role-in-running-software-companies/
33. This is such an important discussion. The West is our own worst enemy due to our luxury beliefs/bad thinking and being afraid of exercising power.
It's worth listening to. (skip the part on language and transgender/gender stuff, which was incoherent). Rest is excellent.
https://www.youtube.com/watch?v=H10fH6Zy-ew&t=1594s
34. Learning from Founder Led Funds. Always stuff to learn.
https://www.youtube.com/watch?v=PTaOfh1_N8s&t=2027s
35. "Venture capital is an existentially flawed, yet powerful, economic system that could kill the thing most VCs purport to love: startups. Just like the person who doesn't want to take a life on the boat — you're staring at a deadly thing. The deadly outcome isn't something you want. But the failure of that outcome threatens your own life. The dissolution or rapid revolution of the venture capital industry threatens to kill a generation of tried-and-true VCs. So what's to be done?
That's the key to survival. Adapt. Venture capital is dying because it has adapted to focus on returns. The model has crafted an engine that generates returns, not necessarily enduring, generational companies. The same is true of things like the oil industry. Eventually, companies will be forced to bear the brunt of their own externalities. Venture capital is no different."
https://investing1012dot0.substack.com/p/surviving-the-death-of-venture-capital
36. "Expect this consolidation to continue, especially where platforms are emerging, and complementary products integrate well. Over time, we’re going to see more consolidation, but not as much as some might think.
The nature of SaaS, with its predictable cash flow, recurring revenue, and great gross margins, means that companies can remain in a “zombie state”—not growing rapidly but not dying off either. They don’t have to transact, and they don’t have to be acquired. So, the majority will not consolidate, but for those that align well with a larger platform, look for more M&A activity, especially over the next two to three years, as larger, well-funded platforms look to expand their total addressable markets more aggressively."
https://davidcummings.org/2023/11/04/saas-unicorns-expanding-their-tam-through-acquisition/
37. "You aren’t successful because you say you want to help others, but you won’t learn the skills that allow you to help others.
You aren’t successful because you focus too much on art, and then blame the market when they don’t see the value in what you have to offer (because you couldn’t articulate it with marketing and sales).
You aren’t successful because you “focus on your craft” rather than getting your craft in front of potential customers. Your websites, designs, writing, and other projects do not count until other people see them. You are delaying the time to feedback. Without feedback, you can’t make it valuable. Your first iteration will not be valuable.
You aren’t successful because you have an incomplete perspective on what business is. It is how you participate in the advancement of humanity by creating a product that raises the collective consciousness.
You aren’t successful because you took these points as personal attacks, closed your mind to your potential, and allowed your conditioning to rule you.
You aren’t successful because you don’t create something valuable that the market wants to pay for. People don’t want what your ego wants, they want what Mother Nature wants, and who are you to act like you know what that should be?"
https://thedankoe.com/letters/making-money-is-spiritual-if-you-learn-these-unethical-skills/
Kazakhstan & Central Asia is Hot: The Re-Emerging Silk Road
When you hear about Kazakhstan everyone’s thoughts go to Borat, the fictional character who completely mischaracterized this country and region. But the joke is on all of us. Kazakhstan is one of the most interesting and important places in the world. Centered between the voracious giants of Russia and China it plays an important role in the world.
For anyone who studies history, or has any curiosity about geopolitics, Kazakhstan is one of the countries at the center of Eurasia along with Uzbekistan, Kyrgyzstan, Turkmenistan & Tajikistan. The old Silk Road connecting Asia with Europe.
It’s not a big country by population with only 19 million people but it is large by mass, just like Canada. And like Canada it has a tremendous amount of valuable natural resources like oil, natural gas and minerals like chromium, lead, zinc, manganese, copper, gold, iron and coal. Maybe more importantly they provide 22% of the world supply of uranium. Which is absolutely critical in the age of nuclear energy.
But what is probably more interesting is the growing tech scene that has been encouraged by the technocratic government that has been investing in infrastructure, education and policy. As the theme of a recent Strategeast conference there said: “knowledge as a new energy.”
I have not been back to Kazakhstan since 2018 and after an almost 6 year hiatus, it’s been really interesting watching the growth of the startup ecosystem. You have the giants of Kaspi and Freedom Securities dominating the Fintech world. These are the serial acquirers and possible exit strategy of many local startups. And we see an emerging venture and startup community.
There is also a generation's strong experience in aerospace and space. Remember that most of the space launches outside the USA are done in Kazakhstan by international private companies and even other countries like Russia.
It has a growing young population just like in their larger neighbor Uzbekistan, but many more resources to educate and invest in their populace.
Thanks to a decades-long program established in 1993 called the Bolashaq program, promising young graduates have their education in top western universities paid for by the government in return for 3-5 years of service in government agencies or ministries. There have been almost 15,000 young Kazakhs who have gone through the program and it’s a cadre of trained and smart people who end up in the private sector after.
Kazakhstan is an exciting place and unique in the world. I heard a great saying while there. Kazakhstan is WARM. Western oriented, Asia centered & Asian-looking, Russian speaking but Multicultural, Multi-ethnic and Multi religious. Having been there I would say it’s not just warm, but it’s HOT. (If you include the even more populous neighbor Uzbekistan at 35 million people, this region is becoming even more interesting.)
It’s fast becoming a critical geopolitical player as it balances its own interests with those of its big closest neighbors of China, Russia and its far neighbor of the USA. Watch this ecosystem and country. I look forward to returning soon.
Prague Flashback: Reliving The Past
I had a chance to visit Prague this year, after getting invited to do the keynote speech at the Engaged Investments Conference, a new event specific for Venture Capitalists in Central & Eastern Europe. Of course. I jumped at the opportunity to visit one of my most favorite places. A place of fond memories and of my personal growth.
Back in 1996, I had just graduated from university in Canada and could not wait to leave. I had gotten into a summer studies program 8! Medieval Warfare actually at Cambridge University and the original plan was to come back to Canada and look for work or start studies again. Or at least that was the plan or what my parents expected.
I decided to buy a one way ticket to Prague after Cambridge. And my life was never the same again. Yes, I've done travels to the USA, the UK, Taiwan and Japan. But they were either with family, school or orchestra.
So this was the first trip at that time in my life where I was truly alone and independent. Bear in mind, I had never cooked or cleaned or done laundry at that time because my job was just work and school. The trip was a crash course in life. Finding a place to live, managing money as I had very little of it and finding my way around.
When I landed in Prague it was like a fairytale. Beautiful architecture as it had never been affected by war for 500 years at least. It was so physically beautiful to me that I literally could not speak for a day. I was in literal awe. The place was magical, and even now I feel the same way. I spent almost 2 months here, exploring Prague and taking day trips by train all around the country like Cesky Krumlov, Karlovy Vary, Kutna Hora, Telc, Marianske Lazny & Ceske Budejovice among many other beautiful places.
I learned about my personal finance. I was able to stretch my 1 month budget to 6 months, although I admit I had to call home in early December to ask for money so I could eventually get back home. My mom was mad. But it was worth it. My bubble of naive suburban Canadian innocence was bursted quite violently. I ran into racist a—holes, almost pick pocketed by gypsies and was even attacked a few times by neo nazi skinheads. Interestingly, looking back, this rough and tumble crash course mentally prepared me well for my life in America.
Most importantly, I met so many interesting & nice people as well who showed me immense kindness. Business people of all types, retirees, students, fellow backpackers and travelers from everywhere in the world. I really grew up fast.
I’d been back to Prague over the years but always under a tight schedule for work or business. This was the first time in 27 years that I had time to wonder and explore. And it brought back wonderful memories. In the end that’s all we have. It’s also a great reminder of how far I’ve come and how much my life has changed. Overall for the better I think. It’s so easy to forget sometimes when you are so caught up in everyday life.
So here is to travel, to personal growth and to having great memories. And also to Prague. I really need to spend more time here in the future as it holds such a special place in my heart just like Japan does.
Marvin’s Best Weekly Reads November 5th, 2023
“The smallest deed is better than the greatest intention.”--John Burroughs
I'm enjoying this series of interviews with Tai Lopez. Excellent life and business insights.
https://www.youtube.com/watch?v=zzwj2CrRuY0&t=2548s
2. Building Audiences and Holding Cos. Excellent conversation.
https://www.youtube.com/watch?v=lGX30whbJ1s
3. "In most industries, competition is a knife fight—it’s fast and dirty. In contrast, B2B SaaS is a chess match, cerebral and drawn out. And it’s because rather than merely guessing about what their foes will do, founders can forecast with a spooky level of certainty what is going to happen.
At its core, the software universe is paradoxical: common playbooks that should herald predictable commoditization instead yield unpredictable successes. This might be unsettling for the traditional economist, but it's a fascinating phenomenon for the astute founder.
Where does this leave us? First, it's essential to recognize that the uniqueness of software strategy isn't rooted in what companies do but in how they do it. In a world where everyone has access to the same roadmap, the differentiator becomes the vision, culture, and adaptability of the company itself. It's not just about selling a software solution; it's about selling a belief, a future perspective that entices and resonates."
https://every.to/napkin-math/every-software-business-has-the-same-playbook
4. "If we were to write Triangle Investing again the entire cover of the book would be changed. For the majority it would say: 1) Corporate bonds, 2) Crypto and 3) Emerging Companies/Tech. The entire idea of buying stuff like dividend aristocrats, the S&P 500 etc would be thrown out the window. It just doesn’t make sense today and until the government decides to either go back to ZIRP or print tons of money, you can’t justify holding them.
Hopefully we can all agree that the government really only has three options: 1) wealth tax, 2) print and 3) cut rates to zero. Crypto is the lotto ticket for Gen Z, Gen Y and perhaps a good chunk of Gen X as well. All three of these long-term conclusions benefit crypto.
If they try to use a wealth tax, people will self custody. If they print, money will flow into crypto due to inflation (we saw this in covid). If they cut rates suddenly to zero, unemployment will be high… desperation sets in and people turn to crypto as their “last shot” at making it."
https://bowtiedbull.io/p/rewriting-triangle-investing-in-2023
5. "At a time like this, some people might see it as dismissive or callous to talk about the long-term economic future of Gaza. Perhaps it takes a terminal case of Economist Brain to look at a land in the grip of endless war and say “You know what this place needs? Some GDP!”. But I think it’s an important exercise, because economic development provides a nation with a purpose other than the catharsis of violence.
Finance is another industry where Gaza could conceivably shine. Arab countries are a big market, with about $3.5 trillion in GDP. Currently, the Gulf Countries and Israel are the main financial hubs for the Middle East, but Gaza could ultimately challenge their dominance. It could be a gateway for investment in countries like Egypt, Syria, Lebanon, and Jordan, using its cultural affinity to cut Israel out of the loop.
Software and finance take a lot of skills, and Gaza will need a big increase in education to master these complex, high-value industries. But Gazans overseas can take advantage of already-existing education systems in rich countries, and learn practical business skills from working at foreign companies. These skills could then be transferred back to Gaza, along with investment capital, to create software and finance industries in the territory.
In any case, it’s a bit of a pipe dream to look at the devastation and dysfunction of today’s Gaza and imagine that one day the strip could be a wealthy hub of software and finance. But it’s exactly that sort of pipe dream that makes stability, peace, and good government worth fighting for in the present."
https://www.noahpinion.blog/p/economic-possibilities-for-gaza
6. "I’m repeating myself, because I want to stress this: on a long enough timeline, everyone (individuals & brands) will learn trust is only real currency of the internet, and so the world. It has to be this way as there's essentially infinite content, people and brands online and we need a filter. These aren’t human-created rules, they’re immutable, universal laws.
A thing too many haven’t realized yet is the internet isn’t some magical, distinct place separate from the real world, it is the real world (as mirror reflection). Where do you guess people and brands who run around screaming fire in crowded theaters end up? There’s a children’s story about all of this if you need a hint (for what happens to them, and also those who endorse them).
So I ask very seriously, why anyone would want to be left holding the bag of the subprime attention bubble online? You’re basically actively working to kill your credibility and any future chances to compound (productive) attention, reputation and trust — the things you actually need to survive. It all will come crashing down and end poorly for many. And it’s even worse than an investment bubble, because there was never actual liquidity potential for participants, it was always worthless."
https://www.hottakes.space/p/the-subprime-attention-bubble
7. "Today, the Department of Defense released its annual report to Congress on Chinese military power. This report has been around for more than two decades and is always an interesting read, but I don’t think I’m alone when I say this year’s report was more detailed and more responsive to evolving threats than in previous years."
https://www.breakingbeijing.com/p/10-takeaways-from-the-pentagons-2023
8. Sober perspective on Gaza and Israel. Thankfully not WW3......yet......
https://www.youtube.com/watch?v=OagYlYna75Y
9. I hate Orban but love Hungary and Hungarians. I'm hopeful for this country and market.
"In the 1990s, Hungary was one of the most open economies in Eastern and Central Europe and widely regarded as a benchmark for the changes that took place across the region.
Right now, its reputation is mixed, at best. The country is admired by some, and despised by others. It has had real economic issues to deal with, and being known as the country with the highest inflation rate in Europe is not conducive to attract investors.
Equally, within the region, Hungary is cheaper even than its peers. All the bad factors that the country is known for should already be priced in – and then some. In addition, according to Raiffeisen Bank's analysts, inflation is seemingly on the way down."
https://www.undervalued-shares.com/weekly-dispatches/hungary-investor-trip-what-we-learned/
10. Some more on Hungary as an investment. Worth watching the video included.
11. "Rather than hiring as a first resort, you should focus instead on building the systems and processes that will enable your team, existing and new, to operate more efficiently and effectively. These will scale and are easier to build when the team is small and agile than when it has ballooned and established biases and habits.
These systems and processes are one of the core things to do after raising your Seed round in order to be able to raise a Series A. You probably haven’t done this before, but your investors, fellow cofounders, mentors or advisors should be able to help you with this.
So, as that dust settles and you smile at your bank balance with more zeros (good ones!) than you have ever seen, take a moment before you hit the big red hiring button. What made you successful till now was your ability to do more with less, and that shouldn't change just because you have money in the bank.
As a seed-stage company, you do not have a scalable growth engine into which you can pour the fuel of VC capital. That is what you need to figure out now so that you can raise a Series A and realise the full potential of your startup."
https://sturgeoncapital.substack.com/p/processes-before-people
12. "When people seek advice, it often isn’t advice they want, but someone to listen. A good listener — someone who is present, who asks probing questions, who doesn’t use the person’s pain as a starting gun for them to speak — is a balm for anxiety. That’s why a good listener makes a useful partner in problem-solving. Some of the best mentorship moments I’ve experienced, on both sides, have been when the mentor doesn’t offer advice, but expresses affection by focusing solely on you and what you are saying.
The best advice you can give is to listen, which is to tell that person that they matter. The most effective treatment for anybody’s grief or anxiety is time and care. The former takes care of itself, and the latter can be achieved when we tell someone we love them, without words. By listening."
https://www.profgalloway.com/listen/
13. "The enemy of techno-optimism isn’t sustainability; it’s short-termism. Humanity should not build new things to pump up quarterly earnings; we should build them so that our descendants, in whatever form they come, will own the worlds and the stars. And if we are to own the worlds and the stars in perpetuity, we must take care not to despoil them, starting with the one we now sit upon.
Techno-optimism is thus much more than an argument about the institutions of today or the resource allocations of today. It’s a faith in humanity — and all sentient beings — propelling ourselves forward into the infinite tomorrow."
https://www.noahpinion.blog/p/thoughts-on-techno-optimism
14. "In San Francisco, techies have been pumping their chest about AI, spending days attending “Cerebral Valley” events and nights partying at AI hacker houses. In Seattle, the vibe is more work, less play. Locals say that’s characteristic of the city’s resident tech workers, who are more pragmatic—a trait often instilled in them navigating bureaucratic Seattle mainstays Microsoft and Amazon—and less interested in showboating, even when they ought to.
“Seattle, to a fault, is OK being underappreciated,” said Matt McIlwain, a managing director at Seattle-based venture firm Madrona Venture Partners, during an interview last week at the firm’s headquarters. “The Seattle story is a great story. And it continues to need to be told better.”
https://www.theinformation.com/articles/seattles-more-pragmatic-and-quieter-ai-boom
15. "Though Convoy had been frequently hailed as the “Uber for trucking,” it turns out that the $800 billion U.S. market is incredibly difficult to disrupt. Building a profitable business involves navigating volatile trucking prices while inking both short-term spot deals for customers and longer-term contracts—dynamics that leave little margin for error. And Convoy, led by co-founder and CEO Dan Lewis, a leader with an Amazon pedigree but no experience as a trucking executive, couldn’t figure out how to play the game.
Convoy’s shutdown, which wiped out the equity investors that poured $900 million into the company, marks the most extreme downfall of a once-high flying startup in recent years, amid a contraction of venture funding that has left many money-losing startups struggling to survive. It also puts the spotlight on investors’ past willingness to pump money into companies despite management's lack of experience in the industry and questions about their business model."
https://www.theinformation.com/articles/how-trucking-startup-convoy-drove-itself-into-the-ground
16. "One question for entrepreneurs to ask prospects and customers: does this solution solve your most pressing issue? They might see this as a nice-to-have while a must-have is on the tip of their tongue. Prospects and customers are always the best source of ideas.
Many talented entrepreneurs work on startups that will never succeed, no matter the circumstances. If we can guide them toward more opportunity-oriented thinking and encourage ways to find even better needs in the market, everyone will benefit. Entrepreneurship isn’t a zero sum game and we need to move the world forward, faster."
https://davidcummings.org/2023/10/21/talented-entrepreneurs-working-on-the-wrong-idea/
17. "Was I getting pushed out? Was I running away from something I didn’t like?
And while it was a demanding job, that wasn’t really my motivation to leave.
Instead, I was feeling the pull. The pull towards something new. Something exciting. Something different."
https://radreads.co/david-solomon/
18. "When you step outside the city, you realize you’re in a rat race with no end and that you need very little to be happy.
Don’t get me wrong. You should not become lazy and complacent. We are men and we should strive for more.
But it needs to be done in a sustainable tempo. You don’t want to become a high stress type A person who dies of a burst artery at 32.
Build. But enjoy the process of building.
Don’t burn yourself out.
If you do get burned out, step outside of the city to get some fresh air and climb some mountains."
https://lifemathmoney.com/appreciate-the-simple-things-in-life/
19. "And once you realize you can stay for a month you realize it’s even cheaper to stay for three months, so why not? While these kinds of possibilities can become overwhelming it’s also freeing in that I know I’m not living my life downstream from my relationship to work anymore.
In fact, it is flipped. Where I live dictates how much I have to work. If I was living in a place like New York, I’d need to worry a lot more about money and I’d have to constrain the things I’d think about and work on to make sure that I can actually make money. And I might actually opt into a place like that if I was feeling that it might be fun to tap into the raw ambition of the city.
But I’ve also lived in places that cost 10% of what it would cost me to live in New York and I noticed how much that actually freed me to experiment, not worry as much about money, and do things just for the sake of it. And it has been those kinds of experiments that have actually led to more money in the long-term, which reminds me that I still don’t really know what is best for “work” and that’s okay."
https://boundless.substack.com/p/on-travel-living-abroad-and-losing
20. "Your offer to help is only really warranted if the founder finds you, as a firm, attractive. So that's the very first step. Communicate your vibes. But if you've done your best to articulate to the founder why your offering is attractive? Then all you can do is your best to offer well-intentioned calculated help.
It's up to the founder whether they choose to be transparent and receptive to the value add. Otherwise? Maybe it is just a Jedi mind trick that's stopping them from leaning into the value add."
https://investing1012dot0.substack.com/p/you-dont-want-my-value-add
21. This is an excellent interview with Chris Williamson who is one of the best interviewers around and Codie Sanchez.
https://www.youtube.com/watch?v=cG8ih5DwOlM
22. "When investing, I’ve done my fair share of stupid things.
And like everyone else, I always found a way to justify those absurdities, especially when it paid off, one out of a dozen times under the fact that Venture Capital is a power law where 95% of the returns are driven by 5% to 10% of the companies we invest in."
https://2lr.substack.com/p/absurdity
23. "This is the evolution of ESG - it is now a social good to invest in domestic energy production, in the raw materials sectors - and I don’t think it’s a stretch, but in defence and security.
Whether bullets or batteries - the lack of supply will continue to trigger rising prices, and a wave of capitalists will rush to finance the gap.
The importance of raw materials, metals and energy has never been more important than it is right now."
https://jaymartin.substack.com/p/pray-for-peace-vote-sensibly-and
24. "Almost everywhere, our taxes continue to rise. But instead of life getting better because of handing over more of our money to the state, life is becoming demonstrably and statistically worse for almost everyone at the bottom levels of the Western world. The cost of living continues to rise, and we’re constantly hearing how the quality of basic services like healthcare, public transport, and utilities are getting worse in most developed countries.
If you’re a part of today’s modern workforce, it’s the first time in generations that you’re statistically likely to be worse off financially and economically than your parents or grandparents were. And good luck attempting to afford a home.
Peasants in 14th century England revolted against their masters based on paying barely above 20% of their total income in estimated taxes. So why do we accept paying 50%, 60%, or 70% of our income like this should be a normal part of everyday life?
Why don’t we protest? Why don’t we revolt? Why don’t we rebel?
Because we’ve been raised to believe since birth that this is normal. Because we’ve been made dormant, fat, and slovenly by entertainment, culture, and an industrial food system that poisons our bodies and numbs our minds."
https://abundantia.substack.com/p/slave-nations
25. What a speech. Choose a life of strength by giving up your life of hate. Worth listening. Conquer your mind!
https://www.youtube.com/watch?v=jsETTn7DehI
26. "Here’s the craziest part: we ironically trust these faceless accounts more than we do personal brands. Without the face, all we know is the intention — get you from point A to point B."
https://latecheckout.substack.com/p/the-guide-to-faceless-brands
27. "Despite Halloween’s ever-increasing popularity, haunted houses are risky endeavors, labor-intensive businesses that must earn a year’s worth of income over a few weekends in September and October.
Only a small number of haunted houses see more than 10k visitors annually and stick around for longer than a few years. Even for the established houses, survival isn’t guaranteed.
“In a seasonal business,” says Amber Arnett-Bequeaith, VP of Full Moon Productions, which owns three haunted houses in Kansas City, Missouri, “you are gambling your livelihood every single year.”
https://thehustle.co/the-frightening-economics-of-haunted-houses/
28. "Between USV selling 30% of their Twitter stake, Menlo selling half of their Uber, Benchmark only selling 15% of their Uber pre-IPO shares, and Blackbird recently selling 20% of its Canva stake, it feels more like the former than the latter. Then when Howard Marks says selling is all about relative selection and the opportunity cost of not doing so, it seems to reinforce the artistic form of getting “moolah in da coolah” to borrow a Chris Douvos trademark.
Everyone seems to have a financial model for when and how to invest, but part of being a fiduciary of capital is also knowing when to distribute – when to sell. When RVPI turns into DPI. And we haven’t seen many models for selling yet. At least none have surfaced publicly or privately for us.
The best thought piece we’ve seen in the space has been Fred Wilson’s Taking Money “Off the Table”. At USV, they “typically seek to liquidate somewhere between 10% and 30% of our position in these pre-IPO liquidity transactions. Doing so allows us to hold onto the balance while de-risking the entire investment.”
https://cupofzhou.com/the-science-of-selling/
29. "The problem I’m seeing with many managers is that they’re seeking transactional relationships. The urgency to get to their first or final close leads them to optimize for LPs who can close fast. And I get it, that’s been the game historically.
But it’s leaving a massive opportunity in the market for those who have the time and are willing to educate their and prospective LPs. Who are willing to spend time building a relationship through giving first."
https://cupofzhou.com/to-define-or-to-be-defined-by/
30. The great unbundling geopolitically. Or shattering of the world order. General systems collapse. Important discussion.
https://www.youtube.com/watch?v=XkutC3XT6e4&t=1323s
31. "The biggest surprise in modern warfare is that small players with almost no resources can overcome big players with big resources using recycled materials and 3D printers. Ukraine is fending off Russia with 3D printed “Candy Bombs” that cost “$3.85 on a 3D printer that cost about $1,200”. They are also deploying cheap and fast underwater “Sea Baby” drones that inflicted an estimated $1b of damage on The Russian Fleet and forced it to pull back from its Black Sea position.
Technology has completely reversed The Malmgren Ratio and forever changed the nature of war (See our joint piece in UnHerd “Gaza Will Change the Future of War.”) This means the military doctrines we relied upon in past wars simply no longer hold true. (See: Gaza and The Future of War). This means the reporting on this WWIII is way off the mark.
This means we cannot answer the critical questions: How long will these wars last? Who will win? How many will be hurt or killed? How will these wars be won? Can they be won? What is the definition of “winning”? These questions are relevant whether one is working in financial markets or militaries or a regular person trying to figure out day-to-day living, whether you are far from the conflict or right in the middle of it. Yet, imagination is always lacking.
We revert to known scenarios, even though technology always profoundly changes possibilities. We cannot bring ourselves to believe what always proves to be true. Technology gives the greatest advantage to those with the least money and the greatest imagination. It may seem unimaginable but, when faced with overwhelming technology, the only answer is to embrace our opponents and reconfigure hate into love."
https://drpippa.substack.com/p/a-hot-war-in-hot-places
32. "Despite my seemingly negative bias towards the US (which mostly comes from my view on the desperate fiscal picture and cultural degeneration), I always enjoy my trips to the United States.
The United States remains one of the world’s preeminent industrial powers, and reshoring seems to be a real trend. The current macro environment is interesting, and in many ways resembles the 1970s (rising yields, high inflation, rising energy consumption, and major geopolitical instability). Continued reshoring should only accelerate this trend. I would continue to avoid bonds and favor assets that perform well under inflation, like energy assets.
I think money managers still fail to appreciate the magnitude of this trend. Three money managers (one claimed to manage over twenty billion dollars) I had dinner with in Charleston weren’t even aware of the Treasury maturity schedule. One 30 year RIA was pounding the table on buying bonds. I don’t think people get it yet.
My assessment of the coal mine was mostly favorable, and I have no worries that my subscribers who invested in it will get paid back and make money for a long time. For my personal portfolio, I don’t see the usurious returns I usually seek (like in Petrobras and Ecopetrol) to justify the illiquidity, but I do see a very safe investment that will likely cash flow for decades."
https://calvinfroedge.substack.com/p/coal-and-machining-summary-of-us
33. Have always thought of Ann as being one of the more thoughtful VCs in the industry. This was a great interview.
The One Person Billion Dollar Company: A Possible Future of Business
This was a concept that I’d been thinking and pondering about for a long time. But was pointed out by Anand Sanwal most recently:
This absolutely made me think about all the bad ideas that happened in Silicon Valley recently and the counterpoint: what we are overlooking? Technology ultimately is about scaling and leverage. Yet we went the other direction. Adding people instead of technology and outsourcing to scale. This recession is forcing us to rethink “business as usual” here, in a very good way. Auren Hoffman was early to this.
Auren goes on to say correctly: “In the future, those who achieve the greatest results with the least number of employees will be admired above all others; the key statistic to look at is the go-forward net revenues per employee because it best encompasses the company’s leverage. What matters is each employee’s productivity and how the business itself can scale?
“If you start stripping out everything that is not unique to your company, you’re left with just a few people who make the unique parts of the company. And then add a few people who need to explain its unique benefits to the market. Imagine your 100 person company going to 6 people. Imagine your 1000 person company going to 20. How much faster could you move?”
The key question is why haven’t companies adopted this mindset 25 or 50 years ago and how does one start to outsource non-essential tasks? Primarily, corporations of yesteryear were full-stack – they rarely used vendors and instead opted for adding many heads into the fold, creating a hierarchy and thus a stringent bureaucracy. This is changing: today, vendor selection is becoming a rare and prized skill as it frees up time and money that businesses can invest in higher ROI activities like R&D.” Source: https://summation.net/2020/02/11/the-new-status-game-for-companies-fewer-employees/
I remember reading this book by Elaine Pofeldt, called “The Million Dollar, One Person Business” a few years ago. It was eye-opening. It almost broke my brain but it showed me what is possible.
As entrepreneurial Naval said once 10 years ago: “the actual efficient size of a company is shrinking very rapidly. So the future of the world will be almost all startups. Like I think most of the world, most businesses will adopt a startup mentality. In the sense that, there will be small companies, loosely coupled and connected to each other, all through APIs and processes for their needs. I think we will see more billion dollar businesses built by 4 or 5 people and it will stay at that.”
https://www.youtube.com/watch?v=rIXx617xVMo
But I’d go even further. So $1M is definitely possible. Why not a one person $1B business? Maybe we are far from that. But there definitely will be a very tiny team company worth a billion dollars. My friend Jeremy talks about this and it’s excellent. This is recapped here:
“PREDICTION: The next billion-dollar startup will have only 3 employees.
By Ben Parr Chris Saad and myself, Jeremiah Owyang on a recent podcast on #AI for startups.
The culture within the AI startup market is "AI First" where the first instinct is to use Autonomous AI agents as the first method to get a job done. Automate all the things. Fully remote.
Here are the key duties for each of the three roles:
CEO:
-Vision, strategy, drive growth
-Lead public-facing marketing
-Also be involved in engineering, hands on coding
Will occasionally represent the company in public, but most of the digital marketing and sales functions will be handled by AI agents, which may replicate their likeness.
Product Leader:
Will work closely with AI agents to accomplish:
-Collaborate with customers & team to construct roadmap
-Drive development and delivery or product
-Refine and iterate
Operation Leader:
-Manage marketing and sales automation, finance, supply chain, and legal functions.
-Responsible for company-wide AI agents and generate single source of reporting.
-Ensure smooth operations across all functional areas of the company.
SUMMARY
-We expect to see this 3-person team form by end now by end of year, with it hitting stride in 3-5 years.
-This is just the start of the journey, we expect to see fully-autonomous companies that may not even have humans at the helm.”
Source: https://www.linkedin.com/feed/update/urn:li:activity:7058821822867202048/
It’s an interesting idea and concept whose time has finally arrived. Instagram and Whatsapp are some great examples of these kinds of companies in the last decade, albeit they were in the teens or dozens of employees (Instagram at 18 employees and Whatsapp at 55 employees). But directionally these two companies set the tone for this future.
I anticipate that with a large global pool of contractor talent & expertise plus the rise of even more distribution platforms, tools, APIs coupled with the larger trend of generative AI and “Low code and No code” tools, we are closer than ever to this becoming easier and a much more common reality.
Doing The Hard Thing: Staying Positive & Taking Action When The World Has Gone Mad
It’s been a few weeks since the horrifying Hamas terrorist attacks in Israel. I stress, horrifying, as we watch the GoPro videos of Hamas terrorists going door to door killing civilians. The interviews of captured terrorists talking about killing children and the rape of women like they are buying groceries. Talk about the banality of evil. I mean these terrorists killed little helpless children and babies. That can never be justified by anyone or any cause. October 7th is Israel’s 9/11 but population wise, it’s proportional to the USA losing 40-50,000 people.
But what has been extra horrifying is the response by crowds of ignorant college students and people across the West, protesting and justifying these atrocities. Blaming Israel and showing their anti-semitism. As usual the extremists on the brain dead left and right have shown their true colors.
And then we go to social media and the level of insane stupidity is on another level. I think we have our answer on whether social media has been a positive or negative to society. Overall, probably a negative. It’s easy to lose hope in the state of the West and humanity when you wade through the cesspool of commentary here.
I admit I was in a strange state for 2-3 weeks after, between a funk of depression and pure rage at the senseless attack, the rising anti semitism as well as the pure stupidity and ignorance of the pro-Palestinian students who wander around blaming the victim.
I don’t not want to see Palestinian civilians killed by the Israel Defense Forces but I certainly think Hamas leadership and militants are fair game. These animals should be hunted to the ends of the earth. Nothing justifies what they have done on October 7th. This is the behavior of rabid beasts, not civilized humans.
My sense however is that this may be the straw that breaks all of our brains. Our brains were already overwhelmed and this is how the system/elites or matrix or whatever you choose to call it wants it. Confused, angry, divided and feeling helpless.
Our first instinct is to go tribal, focus on your family, get supplies and arm up. At least this was mine and it’s actually what I did. But since Covid and the Russian invasion of UKraine, I realized the best way to move forward is taking action.
One: I’ve donated to the International Rescue Committee (https://www.rescue.org/) and World Central Kitchen (https://wck.org/) which are important organizations helping refugees and victims of war and natural disasters.
Two: I’ve tried to learn more about the background of conflict so I won't be swayed by the mass disinformation out there.
Three: I think like a good venture capitalist investor and look at the long term possible solution to this crisis. Initiatives like the one Dror Peleg proposes is a good start. The Old New Fellowship, a venture approach to peace:
https://www.drorpoleg.com/a-venture-approach-to-peace/. As is Noah Smith’s idea here for economic development in Gaza after the conflict: https://www.noahpinion.blog/p/economic-possibilities-for-gaza
Sitting around doing nothing, moping or even worse complaining, helps no one. If we want to make the situation better we have to take real action, even if they are small steps. We are entering a new world of disorder as Pax Americana is ending and we go toward a multipolar world. So every little bit we can do to make things better for our fellow man and woman is needed right now.
Marvin’s Best Weekly Reads October 29th, 2023
"If I cannot do great things, I can do small things in a great way." —Martin Luther King, Jr.
"Every time I talk about psychology when it comes to investing, it comes back to incentives. That's not a coincidence. The same is true of most psychology. We often believe what we want to believe because of what we want to come to pass.
Human empathy matters more than human associations. In everything I want to be involved in, my hope is that it leads to less suffering than more. Net positive outcomes. We should want to eliminate suffering, from the slightest tweak in someone's expense management software interface to the alleviation of poverty, starvation, and violence."
https://investing1012dot0.substack.com/p/the-inescapable-debate-of-human-nature
2. "many PLG companies combine bottoms-up & top-down selling motion. Those motions target different buyers. It’s possible to achieve this with the same product.
But, it’s easier to achieve with two different products. Atlassian sells Jira to engineers to help them manage their features & bugs. Confluence, the internal communication tool, targets managers & leaders. To achieve this type of sale requires a long-term view or a willingness to acquire products to bolster a suite."
https://tomtunguz.com/plg-trap/
3. "In any case, the larger message here is that neither the U.S. private sector nor the public as a whole, nor even the government, is properly prepared for the risk of a war with China. That war may never come, and I strongly hope it never comes. But being caught unprepared would be a disaster, not just for the U.S. and its allies and global security and freedom and all that, but for the American people themselves, who would suddenly find themselves without consumer goods, shut out of key global markets, etc.
It’s simply better to prepare, both mentally and with policy. If the wars in Ukraine and Israel have taught us anything, it’s that we live in a much more volatile and dangerous world than we did five or ten years ago."
https://www.noahpinion.blog/p/were-not-ready-for-the-big-one
4. "The son of an engineer and a government administrator, Cerezo was encouraged to get an economics degree in college. But between his studies, he’d fly to Asia and pay a few bucks to hop on a fishing vessel bound for a remote island.
Islands became his obsession.
He began to develop an extensive knowledge of archipelagos in Indonesia, the Philippines, Polynesia, and Micronesia. After he graduated, he began to wonder if he could make a living out of his hobby.
“I wanted to do this every day of my life,” he said. “I had no idea if there were others out there who wanted to travel to these remote islands, but I decided to see.”
In 2010, Cerezo launched Docastaway (a combination of “do” and “castaway”) and billed his service as an escape from the clutter and digital chaos of the modern world. Travelers would pay Cerezo to dump them alone on an island, where they could spend time in complete and utter isolation.
The timing for this service was fortuitous.
Interest in extreme wilderness tourism had taken off, thanks to TV shows like Man vs. Wild and Survivorman, and a growing number of YouTube channels dedicated to “bushcraft” — wilderness survival skills like foraging, building natural shelters, and starting fires.
People wanted to test themselves — and there was no better test than being marooned on an island without food, water, or shelter."
https://thehustle.co/the-wild-business-of-desert-island-tourism/
5. "My life, until now, has been the era of globalization. Trust existed, fragile as it may have been, for the world to function as one global marketplace. If you had the money (or credit), you could buy whatever commodities your country needed.
But on the back of currency wars, trade wars and now hot wars, that era is over.
I don’t think the transition to whatever comes next will be simple, quick or predictable. But I do think that our supply of commodities will become more vulnerable than it has been in my lifetime.
Understanding the world of commodities gives you a unique lens through which you can view global events - because the distribution of these raw materials is what leads to the distribution of power.
If you understand which commodities are most important - who has them and who needs them, then you understand a lot about the world.
Predicting geopolitics is harder than we think. I usually find truth by following the money - but in the case of global power, the money follows commodities."
https://jaymartin.substack.com/p/if-the-king-looks-weak-every-pawn
6. "The past few years were fun, people were raising and spending without even thinking how efficiently they would invest that money. The party is over, and regardless if you are in the hype of artificial intelligence, building the next boring SaaS an industry needs, or trying to crack the next social consumer cool thing, your job is to build intentionally with financial independence in sight, whether it’s going to take 1 million or 1 billion.
Higher Goals x Positive Yields on Actions, the rest doesn’t matter if you’re not intentional about that equation."
https://2lr.substack.com/p/new-normal
7. Part 1 of the interview series with Sahil Bloom. It is so good. How to make your life better and happier. Worth listening to as well.
https://www.youtube.com/watch?v=eqIL0VgFqOc
8. Love this important conversation. Learned a lot on how to live better and more productively and happier.
https://www.youtube.com/watch?v=NdxFctWShtc&t=1s
9. "The sudden emergence of fictive kinship didn’t just increase sympathy and support for Israel; it turned millions of unrelated people outside of the Jewish community (both in Israel and the diaspora) into active partisans engaged in moral warfare with an existential enemy.
Weak nation-states and non-state actors will find ways to manipulate this tribal dynamic to amplify their ability to wage war. Ukraine is an excellent early example of success in this area, and Israel is catching up fast.
Israel is also pioneering ways to blunt fictive kinship formation. They cut off Gaza’s power and telecommunications capacity when they began bombing to prevent the upload of empathy triggers. So far, this has been successful in slowing the global spread of fictive kinship production. However, it’s unlikely to last if the campaign stretches on for long."
https://johnrobb.substack.com/p/fictive-kinship
10. "As the nation-state becomes weaker, alternatives arise to exploit the opportunity. These corporations, wealthy individuals, criminal groups, NGOs, rogue institutions, and tribal political networks find ways to exacerbate crisis events and loot and coerce the system as it becomes vulnerable.
The capitalist Western nation-state, the victor of a five-hundred-year battle for supremacy between alternative systems, has become a victim of its success. The globalization and networking it used to cement its victory at the end of the 20th Century is hollowing with each successive crisis.
The migrant crisis, like earlier similar events, will eventually fade, but the damage it did to the nation-state and its decision-making capacity will not. It will accumulate (from financial losses/budget overruns to increasing network tribalization to unaddressed criminality/corporate looting), setting the stage for the next event in the permacrisis."
https://johnrobb.substack.com/p/onward-to-the-hollow-state
11. "To make 10X possible, you must focus on expanding what Dan defines as your four most important freedoms — time, money, relationship, and purpose. As your time becomes 10X more valuable, you increasingly multiply the money you earn both in terms of amount and profitable satisfaction. As money becomes a tool you can increasingly access with greater ease, you will engage with a growing number of other freedom-motivated individuals."
12. "Because the traditional vehicle of the last few decades — the startup company — assumes a stable political environment that is no longer in evidence. For example, our literature on competition assumes founders are facing corporate rivals, not captured regulators.
Our models of investment assume that some companies may die over time from bankruptcy, not that many companies might die at once from a failed banking system. And our theory around international expansion assumes that countries actually want economic growth, not that they’ll fight it with trade barriers, product bans, and regulations.
Even more fundamentally, if you’re in the West, you can no longer assume the power will be on, the roads will be open, the fires will be put out, or the crime will be put down. You can no longer assume your bank account will be there tomorrow, your passport will remain valid tomorrow, or that your speech will remain free tomorrow. You can’t just start a space company, or even a taxi company, without worrying about the politics of it all.
At a fundamental level, the political environment we grew up with is transforming from constant to variable. So the model of ignoring politics to focus on technology is no longer applicable. That model worked in its day, but today innovating in tech requires somehow gaining the ability to innovate in politics, without getting entangled with DC. We can’t assume Western institutions are going to keep basic infrastructure — like banking, law enforcement, or even electricity — working anymore. So what do we do next?"
https://balajis.com/p/network-state-conference
13. "In the pursuit of greater intelligence and understanding, Jevon’s Paradox reminds us that complexity is an ever-present companion to most things in the world. You for sure have opportunities to simplify ornate processes and rules in your own organizations. We get more software and tech tools that are supposed to make things faster, but they can easily add more busywork that makes us less efficient and simply creates more red tape or boxes to check, applied incorrectly.
We create onboarding processes for new team members that are overwhelming during a time they are already emotionally overwhelmed. We make it impossibly difficult for customers to get the service they need or even figure out how to contact you. You can think of more examples here, I’m sure.
To overcome these challenges, we must harness the power of simplicity and think through issues from first principles, as well as be unafraid of tearing something up because it’s become unwieldy or makes no sense. Respecting your users and teams also involves not frustrating them with unnecessary complexity for complexity’s sake."
https://www.hottakes.space/p/jevons-paradox-and-a-world-of-spiraling
14. Another masterpiece by Andressen. A long one but worth a read and good call to action. Be a Techno Optimist.
"Our enemies are not bad people – but rather bad ideas.
Our present society has been subjected to a mass demoralization campaign for six decades – against technology and against life – under varying names like “existential risk”, “sustainability”, “ESG”, “Sustainable Development Goals”, “social responsibility”, “stakeholder capitalism”, “Precautionary Principle”, “trust and safety”, “tech ethics”, “risk management”, “de-growth”, “the limits of growth”.
This demoralization campaign is based on bad ideas of the past – zombie ideas, many derived from Communism, disastrous then and now – that have refused to die.
Our enemy is stagnation."
https://pmarca.substack.com/p/the-techno-optimist-manifesto
15. This is always good. Jason Lemkin is a sharp dude and glad he is my friend.
https://www.youtube.com/watch?v=i_xu9NK53E0
16. Part 2 of this. So much wisdom. Saastr AMA: so awesome. Net net: You will never fail if you don't quit.
https://www.youtube.com/watch?v=iMxDzn-1Wdw&t=425s
17. Always enjoy Zeihan's takes on the world. He has been more right than wrong.
https://www.youtube.com/watch?v=klzJyO2cXas
18. "But, these two sparse data points do suggest that the acquisition market is moving in synchrony with the public valuation environment. Benjamin Graham said over the long term, the market is a weighing machine, even if in the short term it’s a voting machine."
https://tomtunguz.com/initial-exits-2023/
19. Learning from the greats: Elad Gil. You have to have a great product and also a commercial mindset. And be capital efficient.
https://www.youtube.com/watch?v=JT9Q1KY-D5Y
20. "In other words, we should recognize that these two hot wars (the Israel-Hamas war and the Russia-Ukraine war) are not just between the parties directly involved in them—these wars are part of the bigger great power conflicts to shape the new world order—and they will have big effects on the countries who are allies and enemies of the four sides in these two seemingly irreconcilable wars.
These two wars will cost the allies of these countries a lot. For example, the US is now fighting proxy wars in Europe and the Middle East while preparing for war in East Asia. As these wars spread, they will cost more.
Fortunately, the progression toward a world war between the biggest powers (the US and China) has not yet crossed the irreversible line from being containable (which it is now) to becoming a brutal war between the biggest powers and their allies."
https://www.linkedin.com/pulse/another-step-toward-international-war-ray-dalio
21. "Liscovich is a strange, liminal figure produced by a novel sort of conflict. He is a civilian neck-deep in military work, a Silicon Valley emissary to battlefields beset by electronic warfare, a Thomas Friedman character cast into a Joseph Heller world. Having grown up in Zaporizhzhia, in eastern Ukraine, Liscovich went on to a PhD at Harvard and then a career in the San Francisco Bay Area.
For a while, he was the CEO of Uber Works, an Uber offshoot that helped companies find on-demand staffing. When Russia invaded Ukraine, he moved back to Zaporizhzhia and, through circumstance more than intent, became a personal shopper for the Ukrainian army. He deals only in nonlethal equipment—merchandise that’s available off the shelf to everyone, or at most classified as “dual use,” suitable for both military and civilian applications.
Generals and brigade commanders tell him what they need, and he roves the global tech souk, meeting manufacturers and inspecting their products. Then he cajoles wealthy friends or friendly nations to foot the bill and arranges for the matériel to be fetched to the front. In the year and a half since Russia invaded, he has wrangled everything from socks to sensors to Starlink terminals. The two downed Vectors were among his earliest acquisitions, paid for by a Ukrainian benefactor at more than $200,000 a pop.
Loosely speaking, Liscovich is an adviser to the general staff of the army, although the most he gets out of that is a military email ID. The army doesn’t compensate him for his service. Instead, Liscovich said, he cuts himself a paycheck out of donations from an American billionaire. (He wouldn’t say which one, but he assured me it was a household name.) He is one of at least 100 civilians who act as buying agents for Ukraine, an official in the general staff of the army told me.
His is the kind of role that aristocrats played back in the 1800s, when their unelected influence extended to statecraft. Over the past century, as war became a nationalized state function, that species died out. Liscovich is a throwback: a Victorian with an iPhone.”
https://www.wired.com/story/ukraine-russia-war-military-retail/
22. I think this is many of us this last week and half especially. It's been a rough year & many of us feel like crap.
"Make yourself sweat.
Your body is meant to be in motion. It didn’t evolve to sit all day under artificial light.
Exercise, sweating, and sunlight release endorphins in the brain which will make you feel “good”.
You will feel happier, more energized, and it will also reduce the feelings of stress/anxiety if you were going through them."
https://lifemathmoney.com/what-to-do-when-you-feel-like-shit/
23. More of the implications of India assassinating Sikh on Canadian soil. Multipolar world and great power politics now.
https://www.youtube.com/watch?v=rwpn7EwNmcs&t=360s
24. "War is unpredictable and devastating, making wealth preservation during such times a secondary concern at best. However, if you’re looking for ways to safeguard your financial future in the face of conflict, remember—asset portability and geographic diversity are key. You want to move a portion of your assets before conflict erupts or be able to move them if it ever does.
For those not directly facing conflict, you should focus your investments on those assets that do well during periods of higher inflation since inflation tends to be higher during wartime. Historically this meant investing in global equities, real estate, and short-term bonds, however, the future may not necessarily be like the past.
While no one can guarantee the safety of your wealth during wartime, the principles above can help guide you in making hard choices during extremely difficult circumstances. Let us just hope that you never have to use them."
https://ofdollarsanddata.com/how-to-invest-during-times-of-war/
25. "Quick Summary: 1) the *highest probability* way to make it into the $10M+ camp is by starting a small business, 2) the *highest probability* suggests that if someone is obsessed with their 401K or personal home that they are in the $1M or lower net worth range. They are emotionally attached to those two items due to the weight in their net worth, 3) the *probability* of bonds being this low in the future in terms of asset allocation is low given the rate change from 0% to over 5%+ and 4) stocks or real estate should be your preferred *next* step after your first business.
Read that again if you have to! Until you have a small business (even $20K a year is a fine start), you should not bother with investing. You should be investing in yourself to learn the skills needed to grow your biz.
The USA remains as the greatest country on earth to get ahead by practically every metric. **IF** you’re willing to self inflict massive amounts of pain and suffering while everyone else lazily goes through life doing the minimum since the quality of life is so high."
https://bowtiedbull.io/p/talking-about-true-wealth-and-entrenchment
26. "But the livestream e-commerce bubble has begun to deflate this year, with the saturated industry facing an economic downturn. Sick of dwindling salaries, longer working hours, and increasing competition to win over frugal Chinese consumers, livestream sellers are beginning to question their job prospects in the industry."
https://restofworld.org/2023/chinas-livestream-shopping-bubble-is-popping/
27. "That's what the Society of the Spectacle is kind of about, when everything becomes entirely predicated on the appearance of appearances. And we're seeing the response to that now, just based on how often we have to interact with social media, how often we have to interact with each other online, which the pandemic exacerbated.
Media headlines driven by monetizing and Twitter driven by monetizing false information, everything driven by making people feel insecure on social media, all selling you some image of what it is based on what it isn’t.
When we talk about the Society of the Spectacle and talk about the information that we're consuming, especially in a time of intense geopolitical conflict like we're in now, it's really important to check who we are getting information from."
https://kyla.substack.com/p/how-mrbeast-broke-the-economy
28. Learning from Founders Fund. The most iconoclastic & interesting VC fund on the planet.
https://www.youtube.com/watch?v=0L4CrAb73G0&t=82s
29. "It is time for a Marshall Plan-scale effort to rehabilitate the Palestinians, ensure their and their neighbors’ safety, and set a clear roadmap toward a Palestinian state. It should also dismantle Iran’s proxy militias — including Hamas, Hezbollah, and the Houthis — on the Israeli and Saudi borders. Such an effort should be secured and funded by all interested parties, in particular the US, EU, Saudi Arabia, and UAE.
For Israel, the price would likely be a commitment to relinquish control over Gaza and over most of the West Bank. For the Palestinians, it would mean relinquishing the dream of eliminating Israel and settling for a smaller but stable and, ultimately, prosperous country of their own. This effort should encompass Palestinian refugees in Lebanon and Jordan and help stabilize these troubled countries.
Is it too ambitious a plan? It certainly isn't modest. But this is the type of effort the world is now required to make. It would take years, and it would cost billions. But it would be a better investment than never-ending wars and instability."
https://www.drorpoleg.com/its-time-for-a-palestinian-marshall-plan/
30. Every fund manager should listen so they can learn how LPs think.
https://www.youtube.com/watch?v=Gwq16XuyVtg
31. "Have you ever looked at the U.S. and thought, ‘man, this looks a lot like the late stage Roman Empire’?
Powerful but divided. Rich but corrupt. Glamorous but dysfunctional.
A source of marvelous technological achievements but unable to build things as it used to.
Ruled by incompetent politicians, owned by a small elite, its masses trapped by unsustainable debt and distracting themselves with endless mind-numbing entertainment.
A nation struggling to meet the many challenges it faces. A people in deep spiritual crisis. In other words a vast empire about to tumble?
Of course you have. You, me, and everybody else.
To assess an empire’s age, Glubb focused on the changes in the minds and hearts of its citizens. He pointed out a shift in attitude “from service to selfishness” due to the “spiritual disease” of decadence. Empires ended with a mood of “cynicism, pessimism and frivolity.”
https://alchemy.substack.com/p/the-roman-empire-fallacy
32. This is the next geopolitical flashpoint sadly.......
https://www.youtube.com/watch?v=-hoyeJvge3A
33. "Most nontraditional LPs a.k.a. family offices have not been inclined to invest in venture funds, on the basis that they could do no wrong directly investing into companies themselves. Now that this has changed, we have a new challenge in the form of the current market environment. However, it is common knowledge that great companies are founded during challenging economic times. What this means is that well-managed venture funds of the 22'/23' vintage (incl. 24') are said to perform well — as valuations continue to fall.
“But remember, anybody can get it. The hard part is keepin’ it” — Dr Dre
The difficulty for family offices is not only PTSD from the performance of their direct investments, but more so the lack of access to high-potential venture funds.
According to data from a recent FO conference I attended, if they were to go it alone they would need at least $250M to properly source, evaluate and make direct venture investments - with due diligence requiring not just expertise but an expansive network and perspective.
All things considered, investing in a venture fund would make more sense, right? However, it is no longer a game of ‘the most established player wins’ which adds a new paradigm as emerging GPs come to the fore. This brings additional complexity through the challenges of fund diligence, relationship building and post-investment relationship management."
Train Ride Into A War Zone: Returning to Kyiv (Warning: A Political Rant)
One of the best memories I’ve had in my half year backpacking trip in Europe in 1996 was the wonderful train rides. The beautiful forest landscapes blurring in motion, the relaxing rhythmic clanking of the rails. Lots of time to think, relax and process your day. The communal feeling you get meeting random interesting people, either locals or fellow travelers. So much fun. It’s been decades since a train ride as my business schedule never allowed for this.
But I’m taking the train from Lviv to Kyiv in October 2023 as there are no flights now and I’m excited. Kyiv is a place I’ve come to love, full of great memories and lots of friends. It was my home for the latter part of 2020 and most of 2021. But now it’s also a war zone experiencing concerted drone and rocket attacks by barbaric Russians in a senseless war now going on for one and half years. This is how long it’s been since I’ve last gone there.
I’ve so many thoughts going through my head. At the Lviv train station, I saw so many young and old Ukrainian soldiers in uniform coming and going. Many of them being welcomed joyfully by family or being seen off to the front and the war. The faces of worry and sadness are hard to forget. I’m so heartbroken seeing this.
But as a Canadian Ukrainian friend told me, she recently had dinner with some childhood friends who recently came back from the front. 3 guy friends who grew up together and who had not seen each other since the war began. She showed me the picture and described the incredible joy they had meeting each other after so long. Knowing their friends were alive after the uncertainty of being at war. How can one not be affected by this?
It’s infuriating when I see blatant evil ignorance & lack of compassion from soulless people like Elon Musk, David Sacks, Tucker Carlson, Vivek Ramaswamy, the hard right and left of America and their efforts to mock the Ukrainians and withdraw support for this country.
It’s infuriating to see US & Western Europe slow drip advanced weapons in, giving UKraine enough not to lose but not enough weapons to win. All the while as the war grinds down the flower of the Ukrainian populace. If they had spent any time in this country they would know the Ukrainians will fight on with or without us.
Why? Because of the consequent genocide that would happen in Russian victory. If you want to know the evil things that would happen should Russia win just ask Poles, Estonians, Latvians, Lithuanians, Hungarians, Romanians, Czechs and Slovaks. Or even Germany. There is a reason statues of the Red Army “unknown soldier” are also called the “Unknown Rapist.” And ask Ukrainians who experienced Holodomor, a man made famine that killed and estimated 3-5M Ukrainians.
I hope this war ends soon. But in the meantime, I’ll be doing everything I can to help UKraine. And we in the western world need to continue supporting this amazing country with everything they need.
Remember Ukrainians are the ones being attacked and invaded (Just like in Israel by the Hamas terrorists for the record). They are the victims. This is about right versus wrong. If we fail Ukraine, then we have failed the free world we supposedly represent. But sadly as we’ve learned especially in this decade, the Kissinger saying seems to be true: “To be an enemy of America can be dangerous, but to be a friend is fatal.”
Feeling Like Crap: Surviving Personal Down Cycles
There are days and sometimes even full weeks or months where you just feel like crap. Low energy. Sad. Maybe even depressed. This is normal when you lose your job, facing economic issues or even socially isolated like many of us were in the cursed 2020 covid lockdowns.
But what is really strange is when you feel like crap with no real reason for it. I found myself feeling down earlier this year. And there really was no real reason for it. No clear direct cause for it. Business and finances were pretty good. My family situation overall at the time was good too. Directionally, things were good overall. Yes, admittedly we are in a financial downturn and more so here in Silicon Valley. But for the most part, was not directly impacted.
I’ve realized that it’s normal. And probably expected at some point in our lives. All of us have our own cycles, up cycles and down cycles. Our own sometimes unrealistic expectations cause us to naturally feel bad when we don’t meet them. Or sometimes you just feel like crap for no real reason. Life is not one unending party and newer constant levels of happiness as we see on social media. There is no light without dark.
When these moments of sadness or low energy happen, it’s okay to wallow. Or even take a short break to get your energy back. Stress on “short break.” Thankfully, I run my own show so I can control my schedule and use my time in whatever way I feel like.
I take some time off. I go to do my meditation, reviewing my mission statement and Vision board and increase my gratitude practice. I also try to exercise more: weights and cardio. No one ever regrets going to the gym. I know how deeply affected I am by the weather so getting more sun is important, which can be tough in San Francisco. That and getting my sleep in order and taking naps. In these times, I also watch standup comedy or watch some motivational talks from Jocko Willick or David Goggins.
I find this process absolutely key to my mental recovery. As they say, it’s mind over matter. And in the end, it’s fixing your mindset and morale that allows you to stay in the fight. You just have to last and get through it. Good times eventually follow bad times.
Marvin’s Best Weekly Reads October 22nd, 2023
“To err is human; to forgive, divine”–Alexander Pope
Hard to argue against any of these points. Only people who can reverse Russia's losses are the idiots in US Govt like Matt Gaetz and other appeasers.
https://timothyash.substack.com/p/so-much-winning-by-putin
2. This was an extremely valuable discussion on careers and having goals.(Systems are better). Recommend listening.
https://www.youtube.com/watch?v=FP8AlPI4gaY
3. Such a great show. Also worth watching if you want to know what's up in tech.
https://www.youtube.com/watch?v=HHlsBBrV94U
4. These are important discussions as seed VCs try to figure out whether their model and product to founders is useful or not.
https://www.youtube.com/watch?v=ZxT-23r5Yag&t=839s
5. "With no need for public-market financing, and more options for finding liquidity, private investors will continue to fund a company until the firm arrives at one of two stations: The company is strong but mature and the returns from its growth phase are fully harvested, or its model is suspect and existing shareholders need to deploy a series of false signals to greater fools so they can fling feces at tourists to the unicorn zoo.
And while private capital investors (aka the very rich) reap the gains, public investors (aka everyone else) have scant access to the markets where real wealth is created. As capital concentrates, so does power. The “shareholder class” has always been elite. But, at one time, it reached down to the merely affluent and then, through pension and retirement funds, to the masses — diffusing influence, and strengthening democracy. Public ownership’s transparency requirements are preventive against collusion, graft, and a steady march toward a dynastic society.
Instead we have bailouts of the rich, tech firms who capture trillions building a thick layer of innovation on top of public investments while decreasing R&D and paying less taxes, and an idolatry of innovators who, despite being absent fathers or just shitty investors, continue to capture our affection and capital."
https://www.profgalloway.com/private/
6. "People are alone, angry, and depressed. Something has to change. The world we're living in is simply unsustainable. The world that millennials were promised no longer exists. It is a lie to pretend otherwise. Millennials were raised to dream big, to believe that we could change the world. Now we are told that we are entitled for desiring more from this life, for asking for the things that we were promised growing up. We’re harangued that we should know our place before seeking to change things.
Yet, all the while, our elders, the Silent Generation and Baby Boomers, continue to cling onto power while keeping one foot in the grave. How else should one interpret the aging Senators who prefer to die in office of old age and terminal illness rather than relinquish their grip on power? Raised on the importance of competence and promoting the best-qualified people for the job, we watch as our President struggles to climb stairs and our Senate Majority Leader nearly has a stroke on live tv.
The abandonment of classical American civic virtues didn’t start with millennials, we merely mimicked what we saw in our elders. A few fall days, 9/11, 9/15, and 11/8, totally reshaped millennials’ perception of reality. The intervening years only solidified our cynicism."
https://www.shatterpointsgeopolitics.com/p/a-few-fall-days
7. "This notion of “right-to-left” thinking aligns with other ambitious growth strategies, like the “triple, triple, double, double, double” approach championed by Neeraj Agrawal. The underlying message is clear: set ambitious goals, understand what’s needed to achieve them, and then work backwards to make them a reality.
Adopting this right-to-left methodology where you work backwards from exponential growth is an invaluable approach for entrepreneurs. It emphasizes expansive, long-term vision over incremental, short-term gains. The most significant accomplishments stem from the boldest ambitions."
https://davidcummings.org/2023/10/07/think-about-the-growth-curve-from-right-to-left/
8. Lots of global implications for the barbaric Hamas attacks on Israel.
https://www.youtube.com/watch?v=I7TGj7iLpoA
9. "Like tigers eyeing their prey. The world is starting to revert into a jungle, where the strong prey upon the weak, and where there is a concomitant requirement that every country build up its own strength; if your neighbor is a tiger, you should probably grow some claws of your own. Old scores that had to wait can now be settled. Disputed bits of territory can now be retaken. Natural resources can now be seized. There are many reasons for countries to fight each other, and now one of the biggest reasons not to fight has been removed.
Anyway, Pax Americana always had an expiration date. If the U.S. had avoided the Iraq War and maintained its defense-industrial base, it could have prolonged its hegemony by about a decade, but ultimately the rising power of China would have ensured the return of the multipolarity that existed before World War 2. In any case, it’s over now, and until and unless a new dominant global coalition of nation-states can be forged — either a Chinese-led global order or some kind of expanded democratic hegemony that includes India and large other developing nations — we’re going to have to re-learn how to live in the jungle.
Over the past two decades it had become fashionable to lambast American hegemony, to speak derisively of “American exceptionalism”, to ridicule America’s self-arrogated function of “world police”, and to yearn for a multipolar world. Well, congratulations, now we have that world. See if you like it better."
https://www.noahpinion.blog/p/youre-not-going-to-like-what-comes
10. "Although the people who spanned the Inca empire once boasted a range of varied opinions, ideas, expressions, customs, and even gods, Pachacuti ended that within just a few generations. All he left the people with were the ideas, beliefs, and expressions he mandated were acceptable.
I fear if we allow the laws I’ve outlined here to propagate and be further accepted into society, we’ll be faced with the same thing in only a generation or two. We’ll be living in a world of state-sanctioned ideas. A world that our children, or grandchildren will believe is normal, because that will be the world they were born into, and the world that has shaped their ideas and beliefs. The only world they have ever known.
Do you want that world to come to pass? I don’t."
https://abundantia.substack.com/p/you-will-obey
11. Hamas are pawns of Iran (and the axis of Russia/China) and not just terrorists.
"The theory is, Hamas would do do whatever it takes to instigate Israel into doing warcrimes in an attempt to sour their relationship with the Arab world. This would also be great for Iran geopolitically because it could potentially puts the Saudis in a dilemma. It could diminish the Saudi’s influence in the middle east for being friendly and not calling out Israel, or ruin their relationship progress if they do call them out.
Iran is still in the game to be top dog in the middle east."
https://bowtiedhitman.substack.com/p/wtf-happened-in-israel
12. That was a good trip and glad to see the Ukrainian startup scene thriving.
https://ain.capital/2023/10/10/how-to-pitch-the-startup-properly-marvin-liao/
13. "Coming at a time when foreign policy debate in Washington is consumed with the question of whether the United States should focus on the Indo-Pacific or continue its support for Ukraine, the Hamas attack should perhaps also have been expected. The deepening conflict between the world’s democracies, led by the United States, and the de facto Russian-Chinese-Iranian alliance made what is now happening in the Middle East not only possible, but likely."
https://www.city-journal.org/article/a-wake-up-call-for-america-too
14. This was surprisingly interesting and really educational from the controversial Tai Lopez. Be a prince, king or emperor. Most billionaires are warlords.
https://www.youtube.com/watch?v=W8tVACv4w1I&t=435s
15. This is worth listening to for startup founders. Angellist has built something very special there culture and organization wise.
https://www.youtube.com/watch?v=8Q6a0Smrots
16. I find this therapeutic somehow these days.
https://www.youtube.com/watch?v=RFbWXP-zAQQ
17. "Carey Smith, the founding “contrarian” at Unorthodox Capital has explained how VC is built on bubbles. I’m not suggesting that any of the recent raises are ill-deserved. I wish each company the greatest of success; I know that the DoD needs these products. I do worry, however, that we’re seeing a shift from the deployment of purely “patriotic capital” to the deployment of “momentum capital.”
https://andrewglenn.substack.com/p/hot-in-herre
18. Every creator entrepreneur should watch this. It’s such a master class on building online.
https://www.youtube.com/watch?v=yVnAsulQAl4
19. Mexico will be the place to be it seems.
https://www.youtube.com/watch?v=hYSwKaGWZKU
20. What an interesting and impressive dude. Great interview with doctor and businessman.
https://www.youtube.com/watch?v=3K43YBxUp0I&t=307s
21. "So Hamas it seems was the dog that caught the car. We have reports coming in they wanted to do just another attack on Israel. However, they caught what is now seeming to be the perfect storm with: Israel having less military assets due to supporting the front lines in Ukraine, some reservists not showing up due to political rhetoric, bureaucratic red tape with Israeli Intelligence and perhaps some construction corruption.
This resulted in them in just inciting chaos and destruction rather than any informed or coordinated strike on any high value targets within Israel. Because they had no strategy beyond the wall.
The balance of Power within the Middle East has shifted.
These attacks and retaliations underscore the idea that no one can live in harmony with the enemy on their doorstep. Ukraine is perhaps another example of this… We are now entering an era where hard power is returning, the era of Globalization and Peace is ending, where old wounds will be exposed, and borders redrawn.
We are living through History."
https://mercurial.substack.com/p/holy-war
22. "Thanks in part to a massive, well funded influence operation in the West, the Qatari regime has succeeded in branding itself in western circles as an intermediary force that can help to negotiate between jihadists and western governments. Of course, that couldn’t be further from the truth.
Qatar is not only protected by its army of lobbyists, which include former U.S. military officials who have sold their soul for jihadi blood money, Doha is geopolitically protected by the Al Udeid Air Base southwest of Doha, which hosts the U.S. Air Force and other foreign air forces.
What often remains unspoken, through the fog of Qatar’s well-funded influence campaign, is the reality that these jihadist forces are protected, celebrated, and advanced by Doha. It’s not difficult to discover Qatar’s longtime funding and arming of several internationally recognized terrorist organizations."
https://www.dossier.today/p/the-qatari-elephant-in-the-room
23. What an interesting perspective on the global economy. From an Irish hedge funder based in London.
https://www.youtube.com/watch?v=2HdKCC31nOI
24. "what remains of the civilized world can. It can arm, it can stand together, and it can steel itself to inflict violence differently than the barbarians do, but to far greater effect. The civilized nations are enormously wealthy, have large and capable armed forces and behind them vast reserves of talented men and women. They have the capacity, should they care to exercise it, to contain and push back the barbarians—who, let us remember, will never entirely go away, and who will always haunt our nightmares."
https://www.theatlantic.com/ideas/archive/2023/10/barbarism-israel-gaza-hamas-russia-war/675613/
25. "To placate its proletariat — who just wanted their good-paying manufacturing jobs back — former US President Trump started a trade war with China. Current US President Biden has continued the onslaught by signing into law the CHIPS Act and Inflation Reduction Act. These acts give generous government subsidies and outright payments to companies for building domestic semiconductor facilities and clean energy infrastructure. These outlays will be paid for by issuing more debt in the form of bonds, which in turn are purchased by the US’ trading partners.
America is cheating by using the savings of China, Japan, and Germany to rebuild domestic industry so that American firms can make goods for America. Obviously, that diminishes the market for Chinese, Japanese, and German goods. As expected, many export-focused nations have cried “protectionism” (as if American politicians give a fuck when faced with losing at the ballot box).
Predictably, US Treasuries have lost value in energy terms, as the amount of debt in circulation has grown exponentially. If I were a large holder of these pieces of trash, I would be fucking pissed. China, Japan, and Germany obviously see the writing on the wall, which is why they have ceased re-investing their export earnings into these bonds. That is cheating as well.
Errbody’s cheating, and for valid reasons. It is obvious that a new global economic system will eventually be created, whether the elites like it or not. The imbalances cannot continue. But as long as those in charge refuse to acknowledge reality, money will be printed in hopes that “growth” is just around the corner — and we can thus Make America, China, Japan, and Germany Great Again!"
https://medium.com/@cryptohayes/double-happiness-18c6533c22ca
26. Older podcast (2 months old) but still very relevant. End of VC Epoch.
https://www.youtube.com/watch?v=ybMPkzKVKEk
27. This seems sadly descriptive of the West, especially America.
https://twitter.com/NeckarValue/status/1712563533341462965
28. Tai Lopez is back. It's a really fascinating conversation.
https://www.youtube.com/watch?v=_Qn07rX79pU
29. "In addition to outmaneuvering the Biden administration, MBS restored ties with Qatar, made moves to end a war he had started in Yemen, and, most unbelievably of all, patched up his relationship with Recep Tayyip Erdoğan, the president of Turkey. It was Erdoğan who had released secret recordings that exposed MBS’s involvement in the Khashoggi murder in 2018, and photos of the two men shaking hands last year proved that the crown prince was willing to put political considerations above personal grudges.
The secret to MBS’s power is his ability to spend lavishly, without checks and balances. It makes Saudi Arabia and its powerful sovereign wealth fund, the Public Investment Fund, one of the world’s most sought-after financial institutions. On top of remaking the country’s economy, Saudi Arabia is plowing billions of dollars into sports, entertainment, and gaming, all areas that improve the country’s standing with young people around the globe.
It may be that, by simply appearing open to the deal, MBS has been able to put Jamal Khashoggi’s murder behind him in the eyes of the diplomatic community and recast himself as the Middle East’s most consequential figure."
https://www.vanityfair.com/news/2023/10/saudi-israeli-deal-likely-off-mbs
30. Both experts in Personal Holding Companies. Build or Buy. Do both.
https://www.youtube.com/watch?v=9g6ErC0O9g0&t=819s
31. "My point is that a lot of complexity is required just to meet today’s baseline expectations. When you meet them, a user doesn’t scream out in joy—they just use it. Maybe that’s one reason why software development has become slower."
https://every.to/p/why-we-don-t-ship-software-as-fast-as-we-used-to
32. "If you scroll back through previous issues of this newsletter, you’ll find a recurring theme: societal ills resulting from cravings. From meme stocks and Robinhood to TikTok addiction and Twitter enragement, to obesity itself, human weakness subjugated to our brain’s reward circuitry is no less a threat to our well-being than climate change, authoritarianism, or cancer. According to Harvard’s Grant Study on happiness, the factor most commonly present in the least-happy cohort was alcohol. It’s that fundamental.
A drug that rewires these reward circuits could be an epochal step in human evolution. And why not? We’ve compensated for evolution in many other ways, from the protection of clothing to the assistance of eyeglasses to the power of wheeled transport. Perhaps we’ve reached the point where a salt/fat/dopa drive, evolved on the savannah of scarcity, can give way to a motivational superstructure suited for our era of superabundance. GLP-1 innovation may be scaffolding for instincts in need of updating."
https://www.profgalloway.com/seconds/
33. "The Israeli demand for Palestinians in north Gaza to move south in 24H surely is inhumane, infeasible and worrying when combined with suggestions from some in Israel that Palestinians from Gaza should be relocated to Sinai in Egypt.
This smacks of ethnic cleansing which I would have thought the West understood from its experience from the wars for Yugoslav succession. Our governments seem to learn nothing from history.
Surely no civilised country can punish a whole nation for the actions of a minority. The language being used by many and, indeed actions on the battlefield would suggest otherwise now.
It is sad to see the lack of humanity from the extremes on both sides.
Our leaders fail to learn that much from history - sad, and worrying."
https://timothyash.substack.com/p/reflections-on-developments-in-the
34. "From an entrepreneur’s standpoint, it’s easy to become engrossed in the thrill of securing funding, expanding the team, and growing the business. Yet, more growth doesn’t always equal a better business. Some markets just aren’t that big. Some markets take longer to develop. Furthermore, personal priorities evolve, and one’s perspective on opportunities can shift over time. And, every round of funding shifts the goal posts further out.
Entrepreneurs shouldn’t keep raising money just because they can, especially after a $100M valuation. Instead, entrepreneurs should continually evaluate what they’re signing up for and what outcomes are required to be successful."
https://davidcummings.org/2023/10/14/100m-valuation-and-no-more-funding/
Becoming a Complete And Better You: The New Modern Renaissance Man
Aubrey Marcus’ “Own your Day, Own Your Life” was one of the most important books I read.
A great book that showed you how to have command of every aspect of your life if you want to have a true life. Your diet, exercise, physical health, family & relationships, mental health, business and financial and romantic life. If you aren’t working on these all the time it will come back to haunt you.
This is exactly what happened to me. I focused too much on my career and let myself and my family life decay. It took a lot of personal work to fix it over the last few years. And a lot of it was because I lost the respect of my wife due to me losing respect for myself due to issues at work. Indignity after indignity at work eventually bleeds into your home life.
There is a funny scene in the excellent movie “Crazy Stupid Love” where a family man finds himself mentored by a playboy Jacob after getting cheated on by his wife. Jacob tells him: “Your wife cheated on you because you lost sight of who you are as a man, a husband and probably a lover.”
Now I’m lucky, I did not have infidelity issues with my wife but we were separated & apart for a while. It wasn’t good for a few years. But it was a wake up call for me to sort myself out.
So many men let themselves go. They say they did everything right, by society’s standards. And they probably have. But they stopped developing and growing personally. They stopped investing in themselves and improving on every level that matters. No surprise, their wives begin to look down on them or disrespect them.
The reality is they only respect you if you are strong and have your Sh-t together. No one respects the weak or stupid. There is no excuse to have a dad bod or be out of shape. Go do more sit ups and push ups! Learn a martial art or do some hard physical training.
Jack D Coulson tweeted: “Don’t be rich and fat. Don’t be fit and poor. Have both.”
Have big massive goals and figure out your personally inspiring life mission. Be interesting and aspire to become greater.
There is no excuse to be financially unstable. Read a book, learn business and Go Do the work.
You have to be both tender and capable of hard physical activity. Justin Waller said that: “you have to be able to slit throats and also hold a baby.”
Honestly, there is no point having great wealth without the corresponding health & vigor. There is no point having a powerful body without financial resources and a powerful intellect. It’s about becoming a full & complete man. Jordan Peterson adds: “Become a Controlled Monster.”
Why? Quoting Peterson again: “It’s Better to be a warrior in a garden than a Gardener in a War.”
And make no mistake, war is coming. It is always coming. Mark my words, life is going to become much tougher for everyone. It might not be imminent but it’s inevitable. So all men have a duty to prepare and toughen up. And while doing so, maybe their lives will get better at the same time.
Life Without Constraints Leads to Crazy: Love the Process
I’ve tracked Tony Hsieh’s career and life and reading about him again in the new book “Wonder Boy” helps me recall his greatness but also his tragic last few years.
It’s a reminder of how easy it is to destroy yourself. Especially when you are massively rich. Living life without any checks and balances. Surrounded by cloying yes men. They have almost infinite resources to satisfy any of their whims or desires.
This is why overnight wealth and success is usually highly destructive. They did not develop the mindset nor the discipline to manage it properly. The best example are big lottery prize winners. They almost always end up poor despite winning a massive cash prize.
I used to wonder why I wasn’t successful earlier in life. Curse why I did not have the courage or brains or luck to get there faster. Now I feel I am fortunate that it’s taken decades. For me and my personality, especially in my younger days, having this wealth and success early would have been a fast lane to tremendous personal and professional mistakes. In my youth and arrogance, I would have made too many bad decisions and probably wasted it.
The great philosopher Naval said: "Making money through an early lucky trade is the worst way to win. The bad habits that it reinforces will lead to a lifetime of losses."
Or worse, indulged my darker instincts. My anger management issues would have certainly become far worse. At minimum, I would have become complacent and stopped learning and evolving. This is a form of death in itself.
The point is always be patient and do the work. Learn to be grateful for what you have and for where you are. At every point in your life. Embrace the struggle and lessons along the way. Don’t stop being so goal driven, as that’s the key to success and excellence. But also make sure that you enjoy the process along the way. It will provide you peace, and dare I say, some grace in your life. It certainly does make life more enjoyable.
Marvin’s Best Weekly Reads October 15th, 2023
“Don’t fear failure. Not failure, but low aim, is the crime. In great attempts it is glorious to even fail.” – Bruce Lee
This is enlightening. Syed has built an online empire at a very young age.
https://www.youtube.com/watch?v=gzHdrQ5pDFo
2. Unbelievable fund and impressive performance. Semil and Haystack Ventures.
https://www.youtube.com/watch?v=vxmSyVVhazg
3. "Wifi money by definition is location-independent income.
You have no boss and no financial reason to stay in the U.S.A. if you don’t want to.
So if you want to relocate to a lower-cost of living location with a more traditional culture then an online business is really the only way to do it.
The problem?
You have to go through years of pain to get to that point.
I’ve talked over and over again about the years of struggle you’ll have to go through to get to the point where you have complete wifi money freedom."
https://www.tetramarketing.io/p/online-businesses-and-passport-bros
4. "The net effect of these developments has been a major Ukrainian advantage in the artillery war.
Massive losses have forced a change in how Russia uses its artillery guns. Whereas pre-war doctrine placed brigade artillery assets 4km from the front, Russian artillery units now hide 15-20km behind the frontlines, advancing only for brief periods to conduct fire missions.
While this may improved the survivability of those Russian guns, their continued communication problems mean that Russian units on the contact line suffer from poorly timed and coordinated fire support.
It is now Ukrainian artillery that operate close to the frontlines with impunity, and Russian batteries that have largely been forced back to a safer distance."
5. This was a great interview, some valuable frameworks for looking at startup investing. Especially for AI.
https://www.youtube.com/watch?v=ZZgerlKINHA
6. Volatile future seems to be an understatement.
https://www.youtube.com/watch?v=ddWh5rI7Mw8
7. "If one thing is never happening, it’s “dedollarization” in Argentina. No one has ever seen a Yuan bill in their life, and they would never swap their Benjies for Mao.
Everyone with half a brain here understands that a currency with capital controls like the Yuan could never be a store of value versus a currency that can be used without any of those restrictions.
Libertarian economist and presidential candidate Javier Milei is proposing a full dollarization by shutting down the BCRA and adopting the dollar."
https://bowtiedbull.io/p/watching-a-country-fail-in-real-time
8. Long overdue to visit Buenos Aires, one of my favorite cities in the world.
"Buenos Aires is a city that people fall in love with at first sight, or people find “too European”. The great thing about the city is that there’s enough Latam vibes to go around and it is still a place with beautiful architecture and great nightlife & restaurant options.
For a country with close to 150% real inflation on the ground, restaurants and bars are packed every single day. Those pesos need to be spent at lightning speed."
https://bowtiedbull.io/p/city-guide-buenos-aires-bowtiedmara
9. "If emotion is data, people are as well. People and data are two critical pillars of every single company. If you’re not investing a good chunk of your time on it every single week to become a master in those two domains, you’re screwing up. Whenever you chat with an investor, a partner, or a customer, take it as a chance to test whether you really master what you’re talking about or if you’re still compensating for your lack of depth, clarity, and precision.
You are not an exception.
Master to Conquer!"
https://2lr.substack.com/p/master-and-conquer
10. This is absolutely not good news.
"In late 2021, I wrote a post arguing that Xi Jinping simply isn’t that competent of a leader, noting a number of areas in which his initiatives seemed to be failing. The piece drew fire from a lot of “China hands” who felt I was straying outside of my lane (which was true), while a number of other people scoffed at the idea that the absolute ruler of an ascendant superpower could be anything other than a genius. Two years later, after Zero Covid, diplomatic blunders, and a real estate crash, my thesis is close to conventional wisdom.
In recent weeks, a spate of articles has come out in the Western press blaming Xi for failing to adequately stimulate China’s flagging economy. Xi’s personal objections to welfarism — or to any economic policy he didn’t initially plan for — seem to be a stumbling block.
Xi is also clearly the kind of Boomer conservative whose understanding of economics is heavily tinged with industrial nostalgia and strange notions of masculinity. That’s not a sound basis for making economic policy, and so policy mistakes like fiscal austerity in the middle of a financial crisis are only to be expected."
https://www.noahpinion.blog/p/what-if-xi-jinping-isnt-that-competent
11. This is a great summary of good customer acquisition channels for brands. Really really good.
https://bowtiedbull.io/p/uncommon-marketing-strategies-california
12. The end of the industrial model of Venture Capital. Great discussion.
https://www.youtube.com/watch?v=j22TodbqM7s&t=1272s
13. Really depressing but enlightening discussion on geopolitics, the USA and its military. The importance of property rights and the dangers of regulatory capture in the USA.
https://www.youtube.com/watch?v=3x6KDLovJFg
14. The gold standard of seed investing. One of the best but relatively unknown investors in the world. Roger Ehrenberg IA Ventures. So much insight here.
https://www.youtube.com/watch?v=DAestOS4-OI
15. My favorite new podcast. More or Less: Morins Meet the Lessins. Very timely conversation on the zeitgeist in Silicon Valley.
https://www.youtube.com/watch?v=eF34BGimRaI
16. Zeihan is a bear on China but still....the Chinese real estate bubble is crazy scary.
https://www.youtube.com/watch?v=PVMlEiewyT4
17. Not the nicest man, but brilliant operator and VC investing at the bleeding edge of technology.
https://www.youtube.com/watch?v=EIjxJM_KPsM&t=525s
18. Insightful view on the French and their African colonies. Explains a lot of what’s going on.
https://www.youtube.com/watch?v=vKL_TvieqBg&t=334s
19. "These are the three major “trends”. If you are in survival mode the games are played at different levels. If you have some assets, you sell those to pay the mortgage. If you go through that you go into balance transfers and credit. So on and so forth. We just provided the three general things people will do which is: 1) sell liquid stuff, 2) extend and pretend/balance transfer and 3) begin walking away from assets that are lower on the “importance” stack.
The markets are emotional and everyone is making the same bet “they will print and save us”. While it is true that the eventual solution is printing the question is *when*. Remember, they can hold rates as high as they like for at least 2 years due to the unlimited debt ceiling.
Anyone who is close to default will be part of the list of casualties. When the Fed steps in, it will be *after* job loss, foreclosures, bankruptcies and general pain for the public."
https://bowtiedbull.io/p/making-sense-of-the-markets-and-preparing
20. "In essence, young nerds aren't necessarily more innovative because of their age, but rather due to their higher mobility, which allows them the freedom to move to areas where they can connect with fellow nerds. It's still an age-related factor (given that mobility tends to be associated with youth, as I can personally attest), but it's not tied to the biological aspect of age.
A thought-provoking takeaway emerges: by enhancing the mobility of older nerds, it's possible to offset the demographic decline among younger nerds and its negative impact (per Zeihan) on innovation."
https://www.europeanstraits.com/p/who-and-where-are-todays-innovators
21. "For three and a half months, the world’s eyes have been on the handful of villages and the fields surrounding them south of Orikhiv. Of all the areas where Ukrainian forces have advanced, this one is the most consequential, and the best defended.
Since the counteroffensive was launched in June, the story of the Orikhiv axis has been the story of the 47th, with ups and downs, moments of immense pride and inevitable regret."
22. Lots of good insights. Investor Operator podcast. Learned a bunch here.
https://www.youtube.com/watch?v=88g9afUw3dQ&t=15s
23. "However, venture investing is far from “easy”. While it may seem tempting to jump into the start-up world, family offices should not underestimate the complexities and the risk involved. Unlike passive investments, venture capital requires active participation and significant expertise to navigate the unique challenges inherent in this asset class."
https://concentric.vc/news/want-to-try-venture-investing-it-isnt-as-easy-as-you-might-think/
24. Love these conversations on what's happening in Silicon Valley.
https://www.youtube.com/watch?v=KkuAjqXfoOw
25. "While SaaS may be ubiquitous in developed markets, helping businesses manage everything from inventory to HR and cashflows, it is still nascent in emerging economies. There are two key challenges for SaaS adoption in these markets.
The first is the willingness and ability of businesses, especially SMEs, to pay for software. Many have become accustomed to using it for free and push back against subscription fees.
The second is the digital literacy of the end user, which can lead to low engagement and churn unless the right education and onboarding is put in place."
https://sturgeoncapital.substack.com/p/100m-arr-club-part-iii
26. Interesting list. I agree with Georgia and Thailand for sure. Montenegro and Malaysia are cool too.
https://www.youtube.com/watch?v=dqaPm5cUzdI
27. "But because the Belt and Road was so ill-conceived, this warm fuzzy feeling always had an expiration date. Now that the Belt and Road has basically failed, and the cash faucet has been shut off, delight at China’s seeming largesse is clearly going to be replaced with resentment and distrust. Acting like a mafia loanshark is not generally a way to win friends and influence people.
Note that although this is a debt trap, it isn’t really a case of “debt-trap diplomacy”, as some people accuse. Debt-trap diplomacy is where you get a country to owe you money, and you force it to make geopolitical concessions in exchange for loan forbearance. China doesn’t appear to be doing that; instead it appears to simply be walking away with as much of the money as it can, and thumbing its nose as it walks away, and leaving developing countries bitter and resentful.
That’s just a mind-bogglingly bad long-term strategy for achieving global leadership. China’s leaders tout their country as the leader of the Global South, but they’re raiding developing countries like their own personal piggy bank.
Throughout the whole saga of the Belt and Road, China’s government treated countries like Pakistan, Sri Lanka, and Zambia like Chinese provinces — assuming they could and would strongarm their populations into supporting new infrastructure, prioritizing economic throughput over efficiency and profitability, and counting on those other countries to take the hit when the projects went…er…south."
https://www.noahpinion.blog/p/how-chinas-debt-traps-actually-work
28. Optimistic view of SaaS. Mr Lemkin is a smart dude and hope he is right.
https://www.youtube.com/watch?v=w4FoMoUzW8w
29. "I wanted to dig into Anduril’s M&A activity specifically because it stands out as a unique company-building strategy for such a young startup. After conversations with the team and dozens of hours of research, Anduril’s acquisitions have illuminated what makes Anduril tick, and why I think it has a real shot at becoming a sixth Defense Prime alongside Lockheed Martin, Boeing, Raytheon, Northrop Grumman, and General Dynamics.
Every successful company has a “thing.” Of all of the many things they do, there’s one that’s the secret sauce, the thing they do better than anyone else. SpaceX can get kilograms to orbit more cheaply than anyone else. Meta connects people. Google dominates search. ByteDance does addictive algorithmic feeds. Amazon is a logistics powerhouse. Microsoft sells software to enterprises.
Anduril’s “thing” isn’t any of its particular products, or even its Lattice OS; its thing is its ability to sell modern defense capabilities into the DoD."
https://www.notboring.co/p/anduril-acquiring-prime
30. "The attitude in Kyiv is that there is no choice but to find companies to help them do it themselves.
“Priority number one is that Ukraine will be self-reliant because even if the war finishes today, Ukraine will be a shield for Europe against future attempts by Russia,” to grab territory or destabilize Europe, said Verkhniatskyi from COSA Intelligence Solutions. “It’s just going to happen. The Russians are just simply going to be Russians forever.”
31. Damn good discussion on AI and VC. Worth listening to.
https://www.youtube.com/watch?v=fqfzn53dKhc
32. "My broad thesis on the consumer ecosystem (including both B2C and B2B businesses) is that the consumer experience follows a steady arc toward 1) more convenient, 2) more affordable, and 3) more enjoyable, with technology acting as the force bending the arc. More enjoyable often means more personalized—more customized to our distinct wants and needs.
Hyper-personalization is one of the largest decades-long shifts. We see it appear in culture, where our expectations have become personalization; we’ve gotten spoiled. And we see enabling technologies like AI arising to make new degrees of customization possible. Soon, everyone should get their own personalized healthcare plan; their own personalized learning path; their own personalized shopping recommendations.
If the 20th Century was about mass consumption, the 21st Century is about “bespoke consumption.”
https://www.digitalnative.tech/p/the-hyper-personalization-of-everything
33. "And the United States should be prepared to fight for Taiwan. Should the island fall to China, America’s most potent geopolitical rival will have gained the world’s 21st-largest economy, roughly equivalent to Switzerland’s or Poland’s. China would also gain a dense clot of advanced technology, particularly in the area of computer chips. A key piece of the so-called first island chain in the Pacific would be in hostile hands, endangering the sea lanes of our closest Pacific allies, particularly Japan.
American credibility would take a brutal blow, and our allies would have to wonder whether they should accommodate China or resort to the development of their own nuclear arsenals to substitute for the guarantees of an unreliable superpower.
And not least important: Another liberal democratic state would be snuffed out, in a world in which free government, liberty, and rule of law are already under pressure."
https://www.theatlantic.com/ideas/archive/2023/10/big-lie-about-taiwan/675523/
34. Hmmm......5 for 5 here. ;) No wonder no one likes VCs.
https://sifted.eu/articles/liars-hypocrites-egoists-we-are-vcs
35. "For founders, investors, and others who care about tech, my message is simple: it’s time to pay attention to San Francisco again.
In contrast to the doom-and-gloom of the mainstream media, startup and investor activity is picking up dramatically in both San Francisco and Silicon Valley. While we still haven’t hit the bottom in terms of tech layoffs or startups reaching the end of their runway — and San Francisco itself has an incredibly difficult journey ahead of it — the phoenix is beginning to rise from the ashes.
The city of San Francisco is different from before. SoMa is no longer ground zero for everything in tech. Many startups and VCs have moved to other neighborhoods, like the Mission, Potrero, the Presidio and Hayes Valley (though for the love of god, please stop trying to rename it “Cerebral Valley”).
If you’re a Canadian VC, it’s once again time to get out of Canada. If you’re a Canadian founder, you should probably do the same. Founders and investors alike need to benchmark themselves against the best in the world, and the San Francisco Bay Area is reclaiming its crown."
https://chrisneumann.com/blog/sf-is-back
36. "What stands out when reviewing these three very different regimes is how the US has effectively supported startups and innovation over every period, irrespective of interest rates. The US maximized the potential of multiple productive bubbles since 1995, followed by significant public spending to create a platform for future innovators.
Presently, there are indications of direct government intervention under a new industrial policy, aimed at fostering innovation for long-term objectives such as addressing climate change, reducing trade dependence on China, and transitioning away from fossil fuels. As if the US innovation engine can never be stopped!"
https://www.europeanstraits.com/p/what-high-interest-rates-do-to-startups
Counter Lesson from the “Summer of 69”: Improving Your Life Every Day & Every Year
One of the songs I used to listen to all the time was Bryan Adams “Summer of 69”, classic rock song that signifies the nostalgia we all feel for our high school years. Especially the lack of any responsibilities and fun filled summers with friends. In the song for those who don’t know it, there is the most famous part: “Those were the best days of my life.”
I love that song but hate that part. It’s sad to think that your best days are behind you. You are doing something seriously wrong if that is the case.
In fact, I believe every single year should be the best days of your life. You should be looking forward to even better times.
I’m 49 and I can genuinely say I’ve enjoyed pretty much every year since. Okay, 2020 sucked pretty badly, 2022 was not great either. But overall, year over year I’ve had a great time. I’m fitter and healthier than I was at 29 years of age, eat amazing foods, read interesting books. I continue to have tremendous adventures all over the world, visiting new cities and countries; meeting and making new friends all the time. I’m learning new things all the time while building & stacking assets.
You have to actively work on improving yourself and your life. You should be getting better in every single aspect: Your health, your career, business, finances, your relationships.
You are the literal architect and tradesman of your life. Take it seriously and you will have little to be nostalgic about. That’s a good thing and means you are moving in the right direction in life.
Back to the Future in Venture Capital: Small is Beautiful
The Macro is the cost of capital going up. Baby boomers are retiring and their capital will be going to more conservative asset classes instead of something risky like venture capital. No surprise either as LPs returns haven’t been destroyed because of markdowns in the recent year. A big come down from the insane exuberance of 2020-21.
Instacart went public at $9.9B when their last private valuation was $39B. Or Stripe getting their valuation gutted by 50% from its peak of $94B. If this is happening to the best private tech company in the world, what do you think will happen to the almost 1400 so-called Unicorns in the last few years?
There is another trend happening at the startup level. There is a new major Refactoring of startup costs. whereas you needed $5M USD in 1999 to build a product, due to new SaaS tools, cloud services like AWS and new distribution platforms like the Apple AppStore, new startup costs dropped to around $500k in 2008-2010. Yes, the multitude shrinkage of startup costs led to an explosion of new and awesome startups over the last decade.
I posit that we are entering a new inflection point now. There is a rise of even more cloud services, open source developer tools and plenty of low/no code tools as well as the plethora of amazing new AI-tools. Scenario or Midjourney are good examples on the Gen Ai side. Or think of what Bubble or Softr have done for prototyping products. Startup costs will be a fraction of what it was before.
You probably only need $50-100k in 2023 to get an amazing product out the door. Tech is giving new founders even more leverage.
This has huge ramifications on the VC industry.
I could not articulate this at all until I heard an interview with Sam Lessin of Slow VC. The “Factory line” model of VC is over. Seed VCs packaging for Series A investors. Series A investors packaging startups for Series B. On and on goes the factory line until the company is packaged to go public. Works great during boom times but this factory model has broken down as the inventory has rotted and is being worked through. Ie. big valuation markdowns in the private market as the IPO market has shut down or set much lower clearing prices at exit.
Which means that all the lessons that we learned of venture and startup land in the last 11 years are now obsolete. Worth watching the entire Turpentine VC interview here: https://www.youtube.com/watch?v=py7IPmDKjb4&t=64s
This discussion on the State of Seed Investing with investing legends Sam Lessin, Jason Lemkin and Frank Rotman is also very valuable too: https://www.youtube.com/watch?v=ZUrKr8g8cqw
It has ramifications on the founder’s side. Terence Rohan, said it best in his masterpiece: “Raise less build More:”
“Today, there is a growing common awareness amongst founders that a VC-only path can put them out of business, from either too little capital or pressure to take too much capital. If their company doesn’t exist, the chance of success is zero.
On the other hand, if they are constrained by just profitability, they might not be able to build what they need to build, or others can outrun them. Bootstrapping alone can also impede.
I’ve had similar conversations with dozens of founders on this topic, and I’m seeing them quietly start to pursue a new path – one that doesn’t perfectly fit within the lines prescribed by Sand Hill Road.
They are seeking to combine the growth of targeted venture funding with the durability found in bootstrapping (i.e. profitability).
Their goal is to build a viable business first, while also harnessing the growth, network, and brand benefits of strategically raising capital from top investors.
It’s a new hybrid path, and one that maximizes their odds of survival and breakout success.”
Source: https://trohan.com/2023/08/20/raise-less-build-more/
Notion, Calendly, Vanta, Zapier, Etc are good examples here. Rounds will be skipped or companies will go to profitability sooner. Bootstrapping will be en vogue and more popular, especially for 2nd time founders.
The big implication for the venture capital industry overall is that it will become even more of a barbell structure.
This has already started happening in Hollywood: Blumhouse which focuses on cheap but well crafted horror movies versus big studios like Warner, Sony, Disney et al. and their big expensive and well marketed blockbusters.
In the Big VC world, we have A16Z, General Catalyst, Sequoia which will have the big massive funds, playing the AUM game side of the barbell.
Then you will have the small funds on the other side of the barbell. Specialists, niche and emerging funds practicing the artisanal model. The smartest funds are disciplined ones. Going back to basics. Bespoke.
Some that come to mind are: K9, Haystack, KP, Susa, Floodgate, Union Square Ventures. I’m also excited that Indie.vc is making a comeback. Indie.vc, if you don’t know, invests in software startups but allows the optionality for bootstrapping and getting fund ROI via revenue sharing or going down the VC “go big or go home” funding path as well.
At the earlier stage of VC there will be a restructuring. Nicolas Colin wrote in September 2023, and worth reading the entire write up but here is sample:
“Not only has the VC industry suffered significant setbacks in recent times, but the surviving VC firms are those that have adhered closely to the original VC playbook. To me, this implies that the trajectory of the VC landscape, rather than undergoing perpetual expansion and diversification (the “diffraction”), will consolidate into three distinct segments:
A limited portion of firms will either maintain or revert to the traditional artisanal approach, assembling a compact team, raising small funds, investing in a small pool of companies at reasonable valuations, and maintaining strict control over cap table and governance in an effort to achieve improbable, outsized returns. These firms will concentrate on enterprises engaged in pioneering technologies, essentially returning to the foundational roots of modern VC.
Another subset of VC firms will specialize in B2B SaaS startups—a domain where uncertainty remains high regarding the success of founding teams, thus making room for a VC-like approach. However, unlike the preceding group, this specialization won't revolve around technological breakthroughs. Instead, it will involve supporting top-tier teams from product and go-to-market perspectives, banking on their adeptness in executing a meticulously designed and well-documented approach. In this realm, innovation takes a backseat to execution.
Lastly, a considerable proportion of investors will need to acknowledge their inability to rightly claim the title of venture capitalists. They will forsake the excitement, no longer envision themselves as the next Don Valentine, and revert to the role of standard, boring private equity investors—allocating funds to companies that adopt comprehensible strategies across a wide array of industries, with the aim of achieving profitability through conventional avenues. While this isn't a bad thing by any means, it certainly deviates from the realm of true VC.” (Source: https://www.europeanstraits.com/p/startups-the-door-is-closing)
I am also very excited by the new breed of new emerging fund managers. Especially as they have no legacy portfolio companies to take care of and have a blank slate and relatively small fund to invest. Much easier to deliver returns on a small fund as veteran VCs know.
Everyone stuck in the middle of these two models are toast or walking dead at least in this new world.
I fall on the side of small funds. I firmly believe in small VC funds, SPVs (Special Purpose Vehicles), investment syndicates and especially the rolling fund model like the one I run with my friend Carlos at Diaspora Ventures (diaspora.vc). In a nuclear apocalypse or nature’s equivalent, it’s the scrappy and small body mass that wins. It’s the big dinosaurs that die off. Small funds will be the cockroaches that thrive during times like this.
I’m going to let the brilliant Sam Lessin have the second last word here:
“Even in the scenarios where the companies that run the gauntlet ‘up and to the right’, the dilution is so intense along the way it kills seed investors' returns.
Which creates an ironic situation ideal for a tweet … which is the absolute best seed investments are the ones that never need to raise an A — especially with the scaling leverage of Cloud, and now AI — you can do mighty things with a few folks and a million dollars (and a focus on building a great business that is profitable all the way through) — and when you do that, all capital after the seed becomes an ‘option’ rather than a requirement.
In those scenarios? well that is the best for your seed investors — because there is no dilution… they own what they own… they provided the high risk capital when it was needed, and that capital was maximally leveraged.
Multi-stage funds can’t do this model, because they are forced / their job is to deploy capital at scale as ‘asset managers’ rather than investors— they want founders to need lots of money (which they can then supply at scale) — but real investors / seed funds CAN and SHOULD BE VERY EXCITED to execute this plan.”
What an exciting time to be in Silicon Valley as we see a new Renaissance of startups and venture capital.
Marvin’s Best Weekly Reads October 8th, 2023
"Courage is being scared to death, but saddling up anyway." ― John Wayne.
"If you are a business that yields customer advantages because of localized economies of scale, make sure you dominate every market you are in, don’t dilute yourself across too many. Getting density is ALL THAT MATTERS.
If you are a business that yields resource advantages because of platform dynamics, make sure you make your platform the most accommodating to 3rd party developers. Being the “go to” platform is ALL THAT MATTERS
If you are a business that yields customer advantages because you are the system of record, make sure you lock customer data in wherever possible. Owning as much customer data as possible is ALL THAT MATTERS"
https://medium.com/@EqualVentures/companies-build-capabilities-before-they-build-moats-d331bb167a2b
2. Love this.
"By adamantly (if politely) rejecting the advances of venture capitalists, Holz has bucked the tide among artificial intelligence startups, the top tier of which has raised more than $17 billion in fresh capital in recent years, according to The Information’s Generative AI database. Holz has also succeeded in making Midjourney a source of intense intrigue in VC land, where the company’s profitability and astronomical growth have enticed investors.
The company, which charges users between $10 and $120 for a monthly subscription to its image generator, is on pace to surpass $200 million in revenue this year, according to people close to the company. Details about Midjourney’s financials have not been previously reported.
Although a large chunk of the revenue goes right back into purchasing the pricey AI chips required to train and run Midjourney’s machine-learning models, the company has been profitable since early on, according to several people close to the company. Holz’s ability to rake in hundreds of millions in revenue in under two years and with only about 40 employees puts him in a rare class of entrepreneur. “To put it charitably, he doesn’t need VC in his life,” said Michael Stewart, a partner at Microsoft’s venture fund, M12.
In weekly office hours with customers, Holz, known for his distinctive curly red hair and philosophical manner, has admitted to feeling “bitter” about the VC-backed path he took with Leap Motion and to finding the current cash-hungry batch of AI founders uninspiring.
His goal is to remain a bootstrapped company that stands the test of time—“kind of like Craigslist,” Holz told The Information in a rare interview. He wants Midjourney to be "this weird thing that no one knows how to compete with that just sort of stands alone.”
3. This is a masterclass in Venture capital from 3 masters. Worth watching.
https://www.youtube.com/watch?v=j9xouls5eX0&t=3049s
4. "Only $1 in every $5 spent shopping lives online. And from customer acquisition through to fulfillment, the commerce landscape remains full of friction and in need of digitization. It’s still the Wild West in commerce. In the long run, this week’s blockbuster IPOs in Klaviyo and Instacart will still look like early winners; there’s still massive value up for the taking."
https://digitalnative.substack.com/p/the-wild-west-of-e-commerce
5. "President Powell is confused by the strong consumer and isn’t looking at how the purchase is made. With debt. Humans are not rationale they are emotional.
Steve from accounting who make $100,000 a year can’t go to his wife and cut spending. He is more likely to keep borrowing. The human ego is far too strong.
“They will bail me out like the pandemic” -unfortunately, they will be wrong.
As they default, unemployment rates go higher than they should have. Banks are forced to freeze lending. (unless you’re a reader of this website and are planning for 25% down when the music stops!)
Investing Conclusion: The rule of thumb is to sell all equities on the “last raise”. This is complicated since the Fed might hold flat for a couple of meetings in a row so the last stable reading is “the last raise”. As usual, the goal isn’t to try and hit grand slams or home runs all you have to do it watch the inversions and have your finger on the de-risk/sell button if it gets close to parity (say the inversion gets to -0.5%). Alternatively, you can hit a single (what we’re doing) and effectively exit the stock market with a minimal amount invested.
The second and most important part? The bond market is saying money printer go on (with a catch).
The only way you would get 4.5% on the 10-year bond is if inflation remains relatively high. Since we know the unemployment rate can’t drop to 2% (it’s already in the 3% range), the market is saying the Fed will print money.
They will keep rates high and print money for the unemployed via: 1) helicopter money, 2) UBI, 3) higher benefits or 4) some other direct cash/food payments."
https://bowtiedbull.io/p/president-powell-oil-impact-to-cpi
6. "After reading endless articles about Germany’s malaise, my considered opinion is that it boils down to three big mistakes: trusting its economic health to Russia and China, a naive degrowth-focused environmentalism, and a reluctance to embrace change and progress. On all three counts, the country seems not to recognize the magnitude of the challenge. Instead they seem to be just muddling along, dreamily expecting the economy of the mid-2010s to somehow magically return.
Germany needs to stop messing around and get serious about fixing its economic model. The fate of Europe rests on its shoulders.
What Germany needs now is to become a serious country again. It needs to restart every nuclear plant that can still be restarted, even as it accelerates the building of renewables. It needs to cut off any remaining tech transfers to China.
It needs to increase spending on the military and rebuild its defense-industrial base. It needs to focus on giving software companies a safe and profitable haven to grow and develop, and encourage more rapid digitization. It needs to quash NIMBYism and allow more building."
https://www.noahpinion.blog/p/germany-needs-to-stop-messing-around
7. "Dalio highlights five major forces that will shape our future. “They are 1) the unsustainable level of government debt growth, 2) the great internal conflicts over wealth and values differences that are causing high levels of populism of the right and the left that threatens to cause bad international conflict that will be a type of civil war, 3) the international great power conflicts most importantly between the United States and China that is in the brink of some type of international war, 4) disruptive acts of nature in the form of droughts, floods and/or pandemics, and 5) technology changes, most importantly AI related and its consequences.”
To me, one of the macro trends that powers resiliency, local wealth creation and counters populism is the rise in entrepreneurship. This manifests itself in various forms, be it the creator economy, the gig economy or the general aspiration to become entrepreneurs present in younger generations. As another Forbes article wrote, 48% of Gen-Zers have numerous side hustles and 62% indicate they have started, or intend to start, their own business.
This is also an opportunity for fintechs in powering small businesses and new business creation. For example, my former portfolio company ZenBusiness serves as a single pane of glass for services businesses, in the same way Shopify has powered ecommerce. A range of horizontal platforms are emerging to power this shift."
https://99tech.alexlazarow.com/p/3-lessons-ray-dalio-founder-of-the
8. "AI vastly empowers a regular person because we can all now create businesses, websites, content, characters, apps, art, storylines, research and more without needing to pay a Silicon Valley coder hundreds of thousands of dollars anymore. Yes, some people will lose their jobs to AI, but AI also empowers them to create and pursue new forms of work.
But, even as AI enriches new forms of income for many, AI is also profoundly reorganizing the way we interface with reality itself. It may be causing crashes - plane crashes, train crashes, perceptual crashes, and, eventually, market crashes.
Extending our cognition and offloading the cognitive load of decision-making thanks to AI expands our capacity to get things done. But it is also distancing us from reality and the skill of wrangling with reality. I’d rather wrangle with a real horse than with the sensuous skin of a digital horse.
But now I see that I’ll need to do both simultaneously. If a digital building is a nervous being, so are all digital creatures. It’s the gap between the real and the unreal that intrigues me. It’s the spaces between the zeros and the ones that the future now resides in."
https://drpippa.substack.com/p/ai-what-has-not-been-said
9. Lots of good ideas from Codie Sanchez. Micro PE + Personal Media Company is the way.
https://www.youtube.com/watch?v=lGdgKDdJ3MI&t=920s
10. "It is impossible to responsibly, or even imaginatively, report that dollarization would save Argentina. First of all, there is an unimaginably-large backstop of dollars the country would need to hold and resist spending, which feels like a country-level Stanford marshmallow experiment any administration in recent memory would have failed.
Second, the unit of account is not the problem, as no matter how the spending is tallied, it outruns and dwarfs the fundamentals of the Argentine economy. Third, the loss of control over core central bank functions may seem like a needed straitjacket for policymakers, but long-term it means domestic monetary policymaking capacity may erode even further.
The lack of clarity about government monetary policy moving forward, the lack of constraints imposed by the IMF, the temptation of taking recourse loans from the Chinese, and the institutional inability to implement binding capital controls combine in Argentina for an exciting election cycle, a strange on-the-ground experience, and an uncertain future."
https://www.noahpinion.blog/p/argentinas-macroeconomic-situation
11. "Over and over again, Musk defies the odds and builds something incredible. It is not hyperbole to say that he single-handedly ignited a second space age and accelerated the electric car revolution by at least a decade. This history of success means there is at least a chance he can do the same with brain implants, social media, tunneling, and AI. The guy is relentless—sleeping on factory floors, working 100-hour weeks. He simply doesn’t quit.
If he succeeds in just 75% of his ambition, he could be one of the most important people in human history. However, that success results in huge costs to him personally, to his employees, and to society at large.
He compels us to dream big yet retain moral autonomy. We need not fully embrace or reject him. Perhaps the best takeaway from studying his life isn’t in the acceptance or condemnation of it. Maybe it should be an inspiration to be better and build something better."
https://every.to/napkin-math/oh-no-i-kinda-want-to-work-for-elon
12. "Now that rates are higher, and the Fed is signaling a commitment to long-term higher rates, this generation of consumers and investors will have to recalibrate. The irony of the situation is that boomers were slow to acclimate to low interest rates because it was foreign to their lived experience, but now millennials are likely going to be the ones who are slow to acclimate to high interest rates.
There is no specific cure to the problem. The pain will continue until young people realize the world has changed and they now live in a new regime. Their investment decisions now have to account for 5% interest rates. Their car and mortgage payments are going to be higher than they anticipated.
But that is the price for living today. It may not seem fair, but the worst mistake would be sitting around complaining rather than living life. Time is the most finite resource we get. Letting the central bank steal it from you because they made capital expensive sounds like a bad plan."
https://pomp.substack.com/p/high-interest-rates-usher-in-new
13. "Inside the abandoned building in central Taiwan, there are are only paper targets, and the weapons used are low-powered airguns that fire small pellets.
This is the resistance, the civil defenders should Taiwan's army be overwhelmed in the face of attack by China, which wants to reunite the mainland with the self-governing island.
"We won't surrender," says one of the masked men. "Anyone who invades will face us, and we'll use whatever we can to resist."
https://www.cbc.ca/news/world/taiwan-china-civil-defenders-1.6971920
14. I like eating alone. I travel a lot by myself for business and used to it now. Actually can be enjoyable.
https://www.bosshunting.com.au/lifestyle/eat/dining-alone/
15. This is a quick explainer on what is happening with Armenia and Azerbaijan.
https://www.youtube.com/watch?v=aPx9kdanWNk
16. "Gatorade, BodyArmor, and Powerade dominate the market, and the only real challenger has been Prime, which owns about 6% of the market and was built on the back of two of the world’s largest YouTube personalities (Logan Paul and KSI).
So, if you are going to challenge those brands, you need some advantage. BodyArmor had it with Kobe Bryant and Mike Repole, and Prime has it with Logan Paul and KSI. But simply paying athletes cash to promote your brand on social media isn’t enough.
You need a good-tasting product. It has to be healthy. And most importantly, you need an unfair advantage — celebrity ownership, distribution, connections, secret formula, etc. — that competitors can’t match.
BioSteel didn’t have any of that, and that’s ultimately why the company failed."
https://huddleup.substack.com/p/patrick-mahomes-backed-sports-drink
17. "Now, with our goals a bit more clearly stated, it’s time to address, with coherence and persistence, our leaders. This includes both our politicians, and our virtue-signaling CCP puppets (mere speculation, of course). Our line of questioning for both should look something like this: do you believe this planet belongs to human beings? Do you believe your purpose, in addressing the issue of climate, is to produce the best possible climate for the greatest number of Americans?
And, finally, how do you plan on decreasing the amount of carbon in the atmosphere, increasing our arable land, and “changing the world”? Actually, I mean. As in, please pull out some diagrams and charts and a little laser pointer or whatever and physically show me the path to your intended impact.
Because here’s an inconvenient truth: if the fate of humanity hinges on a carbon neutral watch we are absolutely, totally, irredeemably screwed."
https://www.piratewires.com/p/an-inconvenient-truth
18. This is long overdue.
"That’s the phrase that an executive at private equity-owned financial firm U.S. Anesthesia Partners (USAP) used after acquiring yet another Texas anesthesiology practice, with the intent of hiking prices on Texas patients. And “Cha-ching!” was the right way to put it, since the excess profits amounted to tens, or even hundreds of millions of dollars, in just one medical specialty, in just one state.
But the new quote should be ‘uh oh.’ Because today, the Federal Trade Commission, led by Chair Lina Khan, filed suit against USAP for monopolization, as well as its owner, New York City-based private equity firm Welsh Carson, which from its offices on Park Avenue engineered the entire strategy of gouging patients in Texas.
It’s an important suit, for reasons I’ll go into, and it also reflects a more aggressive antitrust enforcement regime, and skepticism of private equity in health care.
In every area of health care - hospitals, pharmaceutical distribution, ambulances, emergency physician services, insurance - there has been massive consolidation, which increases prices and lowers the amount of care delivered.
Private equity, a financial model focused on ruthless extraction, came into health care in a big way after the financial crisis of 2008, and it super-sized this trend. PE funds look specifically for areas where they can acquire pricing power, and then they squeeze."
https://www.thebignewsletter.com/p/cha-ching-lina-khan-attacks-private
19. Lots of great thoughts and wisdom. How to both be happy and operate with excellence in your life.
https://www.youtube.com/watch?v=3d4AkAaF_Mw&t=2042s
20. "So what could a venture firm focused on frontier technologies possibly see in Angel Studios, a media company whose productions include a TV series about the life of Jesus Christ and a libertarian-themed children’s cartoonwith episodes like “The Itsy Bitsy Victim Mentality”?
While a Gigafund spokesperson said Oskoui and Nosek were impressed by the Harmons’ “highly disruptive vision of a uniquely democratic media publishing house,” another answer can be found in their political and social interests over the past decade. These ties shed light on the unlikely connections between the present-day culture wars stoked by Musk and others in Silicon Valley, and the race to unleash technologies that they believe will ultimately benefit humankind."
https://www.theinformation.com/articles/the-elon-musk-investors-with-dreams-of-a-new-social-order
21. "For the majority of companies that limped across the finish line of 2023, the 2024 fundraising climate may not be forgiving if burn rates remain too high or revenue growth too sluggish. But for many, strong execution under adversity in 2023, reduced burn rates, and overall better execution learned through bitter experience will combine to create the conditions that will enable fundraising and sales.
This is the darkest of nights, but next year may see the dawn break. It will not be roses and unicorns, but we are likely to return to a much more functional market in which customers are willing to buy and investors are willing to price risk."
https://medium.com/@gdibner/2023-the-crucible-year-a24e6d7acc7c
22. "I think solopreneurship is incredible way to find a niche and build something that people love. But I fundamentally believe for the majority of solopreneurs, they should hire themselves out of their roles or build teams.
Yes, less profit but more scalable business and better for your mental health."
https://latecheckout.substack.com/p/im-feeling-spicy-today
23. "Worryingly though if Russia has captured key Western interests, they likely remain captive, and active. Are we doing anything to expose and root these out to stop their continuing influence on at least the public narrative? Not really.
And are the same mistakes possible when it comes to China - absolutely.
Western business interests are similarly invested up to the hilt, and appear active in lobbying to remain engaged and invested. Are they asking the right questions, are they able to table the right questions to the right people? Unlikely. Can they “be in the know”? Also unlikely. I hope for their own sakes that they have set stop losses and could still exit if need be.
Interestingly, I now see those very same “Fortress China” economic policy settings as we saw in Russia from 2015 onwards - deleveraging, building FX buffers, running much tighter fiscal and monetary policies, sacrificing growth for a stronger balance sheet to defend against future tensions with the West. The warning signs are there."
https://timothyash.substack.com/p/why-did-the-west-get-russia-so-wrong
24. "That’s the danger of the mediocre success. The point of startup experimentation isn't the success itself; it’s the learning that comes with clear-cut success or failure. You don't really care about the sales revenue generated by your first two reps; you care about whether this is a strategy you can scale to dozens and then hundreds of reps, or whether you need to use a completely different strategy. It’s all about the learning. And mediocre successes don’t give you any learning.
Making it worse is that we’re all heavily socialized to aim for mediocre success. Schools, universities, large organizations — they don’t want big swings and big misses; they want safety and consistency. A steady 7 is better than 10s interspersed with 0s. This might work well in structured, predictable environments, but in startup-land it’s anathema."
https://pivotal.substack.com/p/the-worst-outcome-is-a-mediocre-success
25. "It’s clear to me that every being will register joy and tragedy, and the ratio is 90% a function of when and where you’re born and the chemistry you inherit. Seneca believed religion was regarded by the poor as true, the wise as false, and the powerful as useful.
As someone who has been all of those things, however, I find the absence of religion and opportunities to congregate with strangers leaves a void. I’m getting older, wanting to serve in the agency of others, to be part of something bigger, and register comfort. I’m left wanting."
https://www.profgalloway.com/losing-my-religion/
26. "So yes, it’s not just that the Fed came out this week to intimate that they’ll keep rates higher for longer that’s prompting the reevaluation by debt investors. It’s something else. Investors are realizing that this isn’t quite the world we’ve been used to all along. Some things may have actually changed, so much debt has been issued that now needs to be refinanced, and so many things cost so much more. All of these things need to be priced in now.
It all starts with interest rates, and if rates are going higher and gravity is getting stronger. . . well asset prices may just need to come down to match.
Nothing is given and everything is earned . . . even for our government."
https://openinsights.substack.com/p/a-whole-generation-of-investors-have
27. "People tell founders not to take the “no” personally, but that’s hard, especially considering how much founders pour themselves into their companies. You can both feel the pain of the “no” and still move past it. Sometimes, a “no” is the end, and sometimes, it’s the start of something more interesting."
https://chudson.substack.com/p/sometimes-no-is-the-beginning-not
28. "Contribution margin tells you how much you can spend on acquiring a customer while still growing profitably. From a DTC perspective, you can also do this exercise using lifetime value if you want to push the envelope of growth if you have plenty of runway with cash to wait 3-12 months to be profitable."
https://bowtiedbull.io/p/contribution-margins-with-bowtiedopossum
29. Nick Huber is a wise man. Worth a listen here.
https://www.youtube.com/watch?v=xvmDjOradP4&t=296s
30. Jason has one of the most unique perspectives on SaaS. Anyone involved in the business should listen to this.
https://www.youtube.com/watch?v=9NqB19-5sog
31. This is very good. VC is hard. Your best investments almost always look weird or were written off at some point in time.
https://www.youtube.com/watch?v=bPiumq0Vmso
32. Learning from the best in Micro-Private equity
https://www.youtube.com/watch?v=OkwHwl5mDVA
33. This man is a hypocrite and a cancer on San Francisco. He is emblematic of the disastrous progressives wreaking havoc in the city.
"Above all, though, Dean Preston is a man of profound, puzzling contradictions. He’s a democratic socialist who believes “the solution to the failures of capitalism is not more capitalism,” but he is also a multimillionaire who, according to public disclosure forms, owns between $100,000 and $1 million of stock in each of Apple, Cisco, IBM, and Microsoft, and owns at least three homes worth over $1 million. He has repeatedly insisted that he “[doesn’t] own rental property,” and is “not a landlord and [has] never been one,” but his wife is part of a family LLC that owns and operates several luxury apartment buildings from which Preston presumably benefits financially.
He brands himself “one of California’s leading affordable housing advocates,” but his voting record shows he has opposed tens of thousands of units of affordable housing (many more than he’s supported), often at the behest of local landlords. In many ways, he is a typical “champagne socialist” — a wealthy individual who supports policies at odds with his luxury lifestyle. Politicians and activists like Preston often prompt head-scratching. Why would someone vocally support political positions in clear tension with their personal lifestyle?"
https://www.piratewires.com/p/dean-preston-san-franciscos-millionnaire
34. "Dual threat CEOs aren’t going to be commonplace, but I do think they’re needed in the startup community. Entrepreneurs that are building businesses are going to find great investment opportunities in the normal course of action, and by being a dual threat CEO, they’re able to deploy capital in a way that is a win-win for both them, the startup community, and the funding providers."
https://davidcummings.org/2023/09/23/dual-threat-ceos-that-build-and-invest/
35. Live it up. Such great stuff here with the guys and Andrew Wilkinson of Tiny.
https://www.youtube.com/watch?v=HChb0C5pQDs&t=1s
36. I always learn from Mike Maples Jr. on the art of VC investing.
The Present & Near Future Alpha in Tech: Rise of Private Equity & Micro Private Equity
I met a founder friend back in 2023 in Montreal after a 5 year hiatus. He had sold his last few companies so he had done well. I asked him what he was up to.
He told me he had just put in an offer to take over a well funded VC backed startup. The issue is growth had stalled out, the VCs had written it off, and founders were tired after grinding it out for 8 years and unwilling to recap it.
The idea is to buy it out for a good price at a massive discount to the last valuation. Put in new management, fix the cost structure and find new distribution channels. Grow the equity value or just take out dividends from the profits.
This is going to be more common and many PE funds will feast well in the next few years.
Too many of the 1400 Unicorns raised at crazy multiples of revenue, at valuations that are too high whose growth expectations can never be reached. Or at least not reach for many years.
Like the previous story mentioned and worth repeating: VCs have pretty much written these growth stage companies off. Or worse if it’s an east coast hedge fund, trying to squeeze nickels out or selling secondaries for pennies on the dollar to get some cash out. The founders are diluted and or/ just damn tired to continue.
VERY Big opportunity for PE. Come in: replace the leadership team and gut the cost structure. It works extra well when it’s enterprise software or SaaS business. It works for big public cos and for the first time in a while, for growth stage private co.
Constellation Software is an excellent model which acquires software companies and holds them for a long time. They have bought over 500 acquisitions since 1995 and deals range from $5M to $250M usd.
We’re even seeing PE funds buy out publicly traded software companies. Thoma Bravo took private enterprise software company Coupa after beating Vista Equity Partners in a $6.2B deal. There will definitely be more of these. And they bring a new skill set of financing and operating with a clear eye and operational expertise on margins and profitability.
Add on top of the example that Elon did at Twitter by cutting 70+ percent of an over bloated staff. This will become standard practice at many of these newly privatized tech cos. Which results in massive margin and profit expansion as a consequence.
I’ve always said PE firms are the vultures, jackals and sharks of the financial world as they do the dirty but valuable clean up after a massive bubble of excess. The tech industry is at this point now. It will be painful and bloody but necessary as private equity feasts on the carcasses of these zombicorns, right sizing and turning them around. Or going further and rolling up several competitors in a category, ending ruinous competition and building out a dominant player in the space.
Once this is done, it clears up the field for future growth in our ecosystem and for a new generation of awesome startups to rise.
Ignorance is Costly: Be Curious
I was wandering around the famous Mitsukoshi department store in Ginza district in Tokyo in April. Engaged in one of my eating and cookie/pastry buying sprees. At every stand & place I went to, they asked me whether I had a card or even wanted one. I was like whatever.
But as I was walking out I saw a sign that said as a foreigner I could get a special card for a pretty good discount on everything there. Duh? Double duh as I am a cheap deal hunter. So it bugged me. I like a deal as much as the next guy, even more so considering how much I spent there. (It was A LOT btw).
But the quick lesson is ignorance is costly. This is not just about shopping or deal hunting.
Thinking you know it all is damn expensive. This is about life in general. Ignorance of a language, a country's customs, about how a company or even an industry works, will eventually hurt you. Not understanding human behavior is even more dangerous. This leads to fights both physical and emotional.
We all have gaps in our knowledge and experience, we start off as blank slates. It’s a good thing so it means we can shape where our lives go. It’s impossible to know everything in such a wide world that is changing all the time.
How do you fight this and get better? Have some humility and acknowledge you are ignorant. And work your ass off trying to learn as much as you can from books, other people and your own experiences. Even better, be genuinely curious about the world around you. That’s been the most universal trait that I see in those most successful.