The New Entrepreneurship: Personal Holding Companies & Multipreneurship
I have a good friend who has been a very successful entrepreneur. He started and sold a few companies in his past but in the last decade or so changed his mode of operations. He would start companies but then turn them over to sharp, hungry 20-30 somethings to run.
He would become a minority shareholder, act as coach, and leverage his experience in the background, while the younger entrepreneur would manage the day to day. While some of these are software businesses, most tend to be service agency type businesses focusing on specific niches, leveraging overseas talent while servicing 1st world country clients but drive massive cash flow. He has accumulated an estimated 9-10 of these kinds of businesses. And built a crazy good lifestyle to boot.
I’ve noticed a phenomenon of a new style of entrepreneurship. Andrew Wilkinson, Nick Huber, Sahil Bloom, Greg Isenberg. It’s actually Greg Isenberg who coined the phrase “Personal Holding Co” aka PHC which is a thesis-driven holding company not necessarily designed to sell businesses but to cash flow them. Or in his own words: “A PHC is basically one registered entity, building multiple products, multiple revenue streams, multiple investments versus the classic 1 startup = 1 product.”
You basically productize yourself and make a bunch of bets against a thesis you are interested in, some will be minority shareholdings, some will be a majority shareholder. And you can leverage the cash flows from this to invest into new businesses. I’d also add that Nick, Sahil and Greg really leveraged their personal brands and built huge online distribution power on social media and X aka Twitter.
You can build or buy companies under this PHC. Sahil Bloom builds, he thinks of problems like Amazon Web Services. How do you change a cost structure to a profit center? He realized he needed good video creation service as well as good animated graphics. Other creators soon reached out to him and he partnered with an experienced agency friend to build out businesses around these.
Nick Huber actually talks about this in an interview here: https://www.youtube.com/watch?v=9g6ErC0O9g0&t=819s. He says:
“The same way I will be buying businesses is how I will start them. Looking at my cost centers, my profit and loss statement and where I am spending money. The interesting part is if you look at the 10 businesses I started, 8 of them were businesses I was spending money on at Bolt storage. Property and casualty insurance, Debt brokerage, Cost Segs, SEO link building, performance marketing, website development, recruiting. All these things were things I needed as a business owner.
And it turns out that a lot of other business owners who follow me on Twitter for the management advice and trust me because they listen to my words, they read my newsletter, they listen to my podcast, whatever it might be, they will need the same things I would need.”
It’s really smart because you get different streams of income and diversification, while getting economies of scale and turning costs into profits via a new business.
It will be more prevalent in the creator economy and these PCH will be made up of service agencies, niche software to DTC (Direct to Consumer)/ ecommerce businesses & media content businesses like YouTube or Newsletters. All usually built around a personal brand or niche audience. It just makes sense and empires will be built this way.
I really think an important vehicle of entrepreneurship will be these Personal Holding Companies. It’s a good structure to unify and run different lines of business.
Damocles Sword: The Psychic Costs of Wealth and Power
I think most people know the term “Damocles Sword” but don’t know the origin story. There used to be a king named Dionysius in ancient times, who built a massive empire in Sicily.
In his court he sat under a golden throne, surrounded by beautiful women and art, served delicious foods and fruits, living the apex of a luxurious lifestyle.
He had a servant/courtier named Damocles who joined him recently and was enamored by this incredible life. Damocles told king Dionysius how fortunate and lucky he was. Dionysius offered to switch places with him for one day and Damocles readily accepted.
Quoting Wikipedia: “But Dionysius, who had made many enemies during his reign, arranged that a sword should hang above the throne, held at the pommel only by a single hair of a horse's tail to evoke the sense of what it is like to be king: though having much fortune, always having to watch in fear and anxiety against dangers that might try to overtake him.
Damocles finally begged the king to be allowed to depart because he no longer wanted to be so fortunate, realizing that while he had everything he could ever want at his feet, it could not affect what was above his crown.”
It’s a parable. “Heavy lies the crown” as the old saying goes. The higher you are, the harder the fall. You have more to lose. Think about the constant fear someone with power and wealth has. Everyone wants to take down the King. Well, not everyone, but enough people to make being a King hard.
It’s easy to see all the glamor and glory of someone who has made it. We don’t see the pain and suffering they had to get there. We also don’t see the pain and suffering needed to maintain it.
What an interesting lesson. Keep that in mind next time you meet someone who has scaled heights you have not and whom you envy. But also do appreciate and respect what they have accomplished and how they got there. It’s very rarely as easy as their PR makes it out to be.
Marvin’s Best Weekly Reads November 24th, 2024
"Talent is nothing without persistence." —Dean Crawford
We could be seeing nuclear weapons proliferation in Europe soon (and probably Japan & South Korea too).
https://www.youtube.com/watch?v=577hMdf-740
2. "Roll-ups consolidate the players of an industry into one bigger player. The idea is that the resulting company will achieve greater efficiency through economies of scale, synergies, or the implementation of better management.
For a company to deserve being called a roll-up, there has to be sufficient acquisition activity. Buying one or the other competitor doesn't count. To qualify as a roll-up, a company should get > 50% of its EBITDA growth inorganically through acquisitions in a similar vertical (= industry). The acquired companies individually should be < 50% of consolidated EBITDA.
The concept is similar to that of serial acquirers, i.e. financial outsiders that try to exploit a valuation difference between acquisition targets and the stock market. While serial acquirers are closer to valuation arbitrage, the difference between rollups and serial acquirers is not always clear-cut."
3. "We each met with several dozen founders over the course of the day, then got together afterwards to compare notes. Both of us had the same observation: more than half of the founders we spoke with knew virtually nothing about their competition.
Sure, they could all list one or two big-name incumbents. Several name-dropped similar-ish startups that had recently raised well-publicized rounds. But very few actually understood the competitive dynamics at play in the markets they were targeting. It’s a worrisome trend I’ve seen increasingly as of late."
https://chrisneumann.com/archives/know-your-competition
4. "So there you have it: an update on how climate is affecting Japan, a year after my last report. On the positive side, perhaps the ongoing efforts of these holy spots are working, because the forecast predicts temperatures are set to decline, grudgingly (?), over the next few days. But I can now officially say that the answer to those who ask me what to pack for autumn visits to Japan is a resounding “I don’t know.”
https://blog.pureinventionbook.com/p/baby-its-hot-outside
5. "The notion of a Zero-Billion Dollar Market is that it’s something that you can see as an entrepreneur, but no one else believes. As we’ve talked about before, being consensus and correct is wonderful in many parts of life, but not in entrepreneurship. If you’re trying to create something new and valuable then it’s generally down the less traveled path, against the grain, and certainly not wildly obvious to others. Value is located when you’re both non-consensus, or contrarian, and also correct.
My friend Tommy Dyer recently alerted me to the fact that Don Quixote has been taught at Stanford Graduate School of Business (GSB), with particular focus on his “Lessons for Leadership.” Among other lessons, Quixote creates his own reality through action. Though often considered mad, particularly as he begins to see the windmills around himself as monsters, it’s perhaps all only in his imagination, and as Tommy delves into in his recent writings, perhaps it’s even him living in his own “reality distortion field,” to use the Steve Jobs turn of phrase. Indeed entrepreneurs must be Quixotic, or exceedingly idealistic, even impractical or “crazy” to invent new categories. “Here’s to the crazy ones. The misfits. The Rebels...” This is the edge between vision and reality where contrarianism dwells."
https://ideas.everywhere.vc/p/scott-hartley-zero-billion-dollar-markets
6. "Some skeptics believe that the AI boom is reminiscent of hype cycles of the past, often drawing parallels with the dot-com bubble of the late 1990s. Rather than defending AI as fundamentally different from previous waves of technology, Taylor pointed to the dot-com boom as validation. That period, despite its excesses, produced companies like Amazon and Google that dominate the industry to his day.
Taylor is confident that large language models are also transforming our lives. “It’s important not to be cynical—there will be a lot of snake oil, lots of people will lose money, lots of people will make money, and that’s the game of Silicon Valley,” he said. His belief in AI’s continued progress is grounded in its reliance on three factors—algorithms, data, and compute—each benefiting from the brightest minds in tech driving them forward. The three, crucially, can be developed independent of one another, creating multiple pathways for continued progress."
https://every.to/p/inside-silicon-valley-s-most-important-conversations
7. A very insightful conversation with VC vet Mark Goldberg of new Chemistry VC. 3 VCs from various top tier funds coming together. Really interesting new fund.
8. One of the best & quietest investors in Silicon Valley. One of the folks responsible for turning around Kleiner Perkins.
https://www.youtube.com/watch?v=51R322RSwU8
9. “We face in the 21st century a Cold War equivalent — you can call it whatever you like, a ‘great struggle’ or something else – but that’s what we have,” he said. “Until we recognize the massiveness of this problem, I think countries are going to struggle with trying to muster up the ability to communicate the danger to their populations and be able to get organized for success.” Studeman named Iran, North Korea and Russia, but focused on China, which he said is actively growing into a colonial power that wants to seize formerly held territories like Taiwan and force other nations to be more economically dependent on it."
https://www.stripes.com/theaters/asia_pacific/2024-10-25/china-taiwan-cold-war-15621497.html
10. Great episode on what's up in Silicon Valley: More or Less.
https://www.youtube.com/watch?v=ZmdqEG2Shtk
11. "The most important link in this network was the waterways of Eastern Europe. The Norsemen who conquered it became known as the Rus.
The Rus were a great commercial power; linking Northern Europe’s wealth in raw materials to the luxuries & refined goods of the Byzantine Empire, Caliphate, & beyond. The scale of this trade is grossly underestimated & it was one of the busiest trade routes in the world.
The Rus controlled “The Route from the Varangians to the Greeks,” which served as the easiest route for trade between Christendom & the Orient, mainly through the Dnieper and Volga Rivers. By navigating several portages and obstacles, like the famous cataracts on the Dnieper, intrepid Norsemen could access the immensely wealthy markets of Byzantium and the Caliphate.
Adding the natural resource richness of Eastern Europe to this mix offered huge opportunities. The intrepid Norse merchant-raiders brought furs, timber, walrus ivory, metals, wax, honey, & slaves South & returned with silks, spices, jewelry, fine weapons, wine, religious artifacts, and, most importantly, silver."
https://varangianchronicler.substack.com/p/the-silver-volga
12. "For years, Solana played a supporting role in the tech world, serving as the chief marketing officer for Founders Fund, Peter Thiel’s venture-capital firm. Solana calls Thiel his mentor, and says he owes his career to him.
Solana started Pirate Wires during the pandemic and has built it into a small media company covering tech, politics, and culture. After raising money from Thiel and Founders Fund, among others, in 2023, he hired a handful of staff. The Pirate Wires free daily newsletter now has 100,000 subscribers, mostly young men, according to Solana. (He would not disclose how many readers have signed up for paid subscriptions, which provide expanded access to the site.)
It has become a must-read among Silicon Valley’s anti-woke crowd, including some of tech’s most influential figures, and a grudging should-read for journalists and some on the left trying to glimpse the thinking of the masters of the Thiel-verse."
https://www.theatlantic.com/ideas/archive/2024/10/mike-solana-pirate-wires/680355/
13. As a history guy this movie looks amazing.
https://www.youtube.com/watch?v=1B_YB3caN80
14. Saas Go to Market, it's changing fast.
https://www.youtube.com/watch?v=SjM4gFA2AYY&t=5s
15. "Entrepreneurs should consider the example of event attendance yields when comparing free versus paid events. Paid events, as expected, have a higher yield, which implies a greater level of commitment—even if the amount paid is minimal.
Similarly, when entrepreneurs charge for a product, the customer’s seriousness is much greater, resulting in higher-quality feedback. Feedback is the lifeblood of products, and the most valuable feedback comes from customers who are invested, even if minimally."
https://davidcummings.org/2024/10/26/event-attendance-yields-and-quality-product-feedback/
16. "That clear contrast is what struck me most about the announcements from General Catalyst and Chemistry this week. They are exactly built to pursue each of those separate strategies.
Now, I've always been quick to say that I'm not staunchly for or against any particular strategy. I'm more focused on recognizing that these types of firms are, in fact, playing different games. And the only stupid game is failing to recognize that the games are different.
The clearest indicator that someone is failing to appreciate those differences is when they immediately dismiss anyone but the large, established funds. "Nobody can compete with Sequoia, etc." In an industry defined by disruption and competitive upset, nothing could be further from the truth. And don’t point out halo effects or capital retention. I never said its easy. But the reality is that anyone is capable of defeat. Anyone. The question isn't if, but how."
https://investing1012dot0.substack.com/p/different-strokes-for-different-folks
17. "Nonetheless, it is encouraging to see that the German Minister of Defense is at least interested in acquiring these critical missile capabilities and maintaining a cruise missile manufacturing capacity in Germany. The next step will require 350 million euros in the 2025 defense budget to kick off the procurement project."
https://missilematters.substack.com/p/germany-may-get-a-new-cruise-missile
18. "What happens when the core desires of the industry move from diffusion and individual agency to concentration of power and a view of hands of god that steer the market?
Perhaps this is actually the correct approach and the failure and massive inefficiencies of many of our closed-system institutions ranging from healthcare to aerospace and defense necessitate a more heavy-handed intervention from those willing to think from first principles on how to solve problems with novel ideas and large amounts of capital at risk.
With all of this said, the questions feel urgent or at a minimum worth pondering as we watch tech position ourselves as the architects of society rather than its organic enablers. The industry that once prided itself on letting a thousand flowers bloom now seems a bit too obsessed with carefully cultivating a specific garden."
https://mhdempsey.substack.com/p/power-and-technology
19. "The question is not if one is subject to mental biases in decision making—it’s which mental biases. When I’m trying to help a new investor understand this dynamic, I ask them to remember their first love—how certain they were that it was going to be a perfect relationship that would last forever, and how wrong they have likely ended up. This failure means they are capable of having 100 percent conviction in something while also being 100 percent wrong.
Inward-facing study can bring up uncomfortable truths that should prompt us to debug ourselves, rather than dismiss them to protect our egos. If we debug well enough, we can study ourselves at a distance, like an anthropologist, and come to valuable conclusions and workarounds for our internal obstacles. After all, an oracle that’s always wrong is just as useful as an oracle that’s always right.
There is a constant cat-and-mouse game between our rational self and meta-analysis, each vying for superposition. But it’s also where the most alpha as investors comes from and is wholly unique to each individual. The expansive, information-rich canvas of exploration is not built by studying the outside world—it comes from studying yourself."
https://every.to/p/to-beat-the-market-you-have-to-outsmart-yourself
20. "Because taxation isn’t about doing the right thing for our nations and their people.
Our system isn’t designed with the people's best interests in mind. Like the Pharaohs of ancient Egypt, our modern overlords believe themselves to be untouchable gods who can keep the wealth for themselves.
History’s biggest lie is that we need taxation to fund the running of our nations. Instead, taxation is about politicians and the world’s elite hoarding the fat of the land, while stripping the value of our labour from our pockets through taxation."
https://anticitizen.com/p/history-s-biggest-lie
21. "There are no absolutes. But there haven’t been as many defendable first mover advantages as I expected, and I think I leaned into that too much in my early AI investing.
Thankfully, early stage investing is one of the few markets where you can be wrong 80% of the time and still do well if your winner go big enough.
What does this mean for my theses going forward? I’m looking much more at fast follower companies. I’m spending more time evaluating whether supposedly defensible data sets really are defensible. I’m factoring into my probabilities that new model architectures and other innovations could weaken the value of proprietary data.
It’s not about being first to do it. It’s about being the first to do it when the market is ready. It turns out AI isn’t so different than the technologies that came before it."
https://investinginai.substack.com/p/my-biggest-failed-ai-investment-thesis
22. "Elon might not fly around in a robot suit and blast his rivals with energy beams, but his ability to out-manufacture and out-innovate almost all of his rivals is right out of a comic book movie trope.
How does he do it? The exact specifics are probably impossible to pin down, but the general contours are nothing mysterious. Elon isn’t hyperintelligent or hyper-creative. Most of the engineers at SpaceX or Tesla are probably better at their jobs than he could be. His superpower — according to a bunch of people I’ve talked to in the tech industry — is gathering, motivating, coordinating, and setting goals for human talent.
This is the same superpower possessed by Genghis Khan, or Henry Ford, or Vladimir Lenin, or Matsushita Kōnosuke, or any number of other people who built big organizations from scratch. Humanity is a collective organism — directed toward a common goal, we can accomplish incredible things. But our talents are not equal, our motivations are not consistent, and our goals are not naturally aligned. An organization-builder is someone who takes the purposefulness of a single individual and applies it to a group of people.
This, by the way, is why almost everyone in the tech industry — even people who disagree with him politically — hold Musk in such awe. It’s not that he has a lot of money — most tech people couldn’t care less about Warren Buffett, and they don’t even know the names of hedge fund managers. It’s that Musk is superhumanly good at the thing they’re pretty good at. He has built world-beating organizations, and moreover, he did it in the super-tough area of high-tech manufacturing — a field so difficult that most tech entrepreneurs shy away from it and stick to the safer waters of software.
A comic-book world of superheroes and supervillains isn’t necessarily the one we’d choose to live in. But in some ways, it’s the world in which we find ourselves living, and we have to deal with that."
https://www.noahpinion.blog/p/why-americas-future-could-hinge-on
23. Solid conversation with Vinod Khosla.
https://www.youtube.com/watch?v=2VfNXLvPJ8w
24. Luke Belmar is a wise man.
https://www.youtube.com/watch?v=S0VPurjNKls
25. "The damage is therefore not only measured in strict military terms, but also in psychological terms and a clear message was delivered: “when we come back it will be easier for us to hit you even harder”. Tehran’s rulers were humiliated. And it cleverly stayed within, whatever one might think of them, the boundaries that the Biden administration had laid out while avoiding civilian casualties or collateral damage. Perfect and precise."
https://pieterdorsman.substack.com/p/precision-and-perfection
26. Lots of insights on building a sales machine.
https://www.youtube.com/watch?v=uEKd2MP67DM
27. I’m down with this Ukrainian Viking vendetta. Hunt down these Russian war criminals.
"On Oct. 10, Russian marines from the 155th Naval Infantry Brigade overran a team of Ukrainian drone operators in Zelenyi Shlyakh, a tiny hamlet on the western edge of a Ukrainian-held salient in Kursk. The Russians stripped the Ukrainians, ordered them to lie face-down on the ground and then shot them, killing all nine.
In the days that followed, a powerful Ukrainian force began deliberately hunting down and ambushing groups of 155th Naval Infantry Brigade marines—and taking no prisoners. On Oct. 18, 95th Air Assault Brigade paratroopers cornered a clutch of 155th Naval Infantry Brigade armored personnel carriers—and dismantled it with drones, tanks, missiles and mines, reportedly destroying three APCs and killing 30 Russians. “The teleportation of the enemy to Hell took place in a complex way,” the Ukrainian air assault branch boasted."
28. Spacetech is here, thanks to SpaceX.
https://www.youtube.com/watch?v=fuL4tfc10AA
29. "Keep the windows closed so you’re not getting all the outside pollution in your house.
You’d think everyone would be using air purifiers in third world countries because of the insane pollution here but the vast majority of third world people are cheap as hell and do not care about their health.
Even if they can easily afford it, they’d rather keep an extra $150 in the bank than buy an air purifier and pay for electricity even if it means smoking an equivalent of 10+ cigarettes per day.
Of course we have a brain so we aren’t one of them. We have an air purifier for every room and hall of the house. Health is wealth and breathing in pollution just to save money is dumb as hell."
https://lifemathmoney.com/life-advice-buy-an-air-purifier/
30. "If you’re not building a WiFi business and are not invested heavily for long periods of time, there is not much you can do in terms of catching up. You’ll be eaten slowly by inflation (lately? eaten quickly).
Use 10-years: This is probably a better proxy for the real inflation numbers. It does capture the crazy printing in 2021 but it doesn’t include the 0% rate environment and mark everything at the near bottom (2009).
This would mean that Shelter costs are up 35%, Energy up 22%, Food up 45% and CPI is up about 28%.
If you’re building equity in a company, you are destroying inflation if net income goes up. Unlike a job that pays $100,000 a year, you can sell a company.
$100,000 net income goes to $200,000 and that’s all you get
$100,000 net income goes to $200,000 that you can sell for 4x earnings means that you’ve hit $800,000
Once this is drilled into your brain you’ll never take those 3-5% annual wage increases seriously ever again.
You’re beating inflation with your effort (forced equity appreciation), you’re beating inflation with your investing (largely tech/crypto and some stocks/bonds to dampen volaitlity).
Then you’re off to one large race to $4,000,000-$5,000,000 in today’s prices and a paid off house. Then. Poof. Disappear."
https://bowtiedbull.io/p/are-you-beating-inflation
31. "China’s economy, like every other victim, subsequently entered into a liquidity trap or balance sheet recession. Private firms and households hunkered down, decreased economic activity, and saved money in order to repair their balance sheets. When credit demand falls amongst households and businesses, the standard-issue Keynesian economic medicine – i.e., running a modest fiscal deficit and lowering the price of money via central bank policy rate cuts – is ineffective. What is needed to forestall the dreaded deflation is a monetary and fiscal bazooka.
The time it takes to switch into panic mode depends on a country’s culture. But make no mistake – regardless of the economic “-ism” supposedly practiced, every country always comes around to injecting monetary chemotherapy.
I refer to this palliative treatment as chemotherapy because while it might cure the deflationary cancer, it ultimately kills the host. The host is the middle and lower classes, who are ravaged by asset price inflation with no discernible improvement in the real economy. And like modern oncology, this ultimately ineffective monetary chemotherapy is extremely profitable for a small cabal of financial witch doctors whose head offices are in New York, London/Paris/Frankfurt, Tokyo, and now possibly Beijing/Shanghai.
Chinese people are some of the most resourceful people on this planet. They will not allow their precious yuan savings to sit idle as Beijing encourages asset price inflation. Bitcoin is not a foreign concept to middle and high income coastal urban dwellers. While the exchanges were barred from offering a visible Bitcoin/CNY trading pair, Bitcoin and crypto still flourishes in China."
https://cryptohayes.substack.com/p/lets-go-bitcoin
32. Crisis in Cuba, maybe opportunity for detente with USA?
https://www.youtube.com/watch?v=Amikw54-R4Q&t=339s
33. This is an excellent discussion on AI & life of a startup founder in the post ZIRP world.
https://www.youtube.com/watch?v=pGU78Q5tJgA&t=1369s
34. A terrifying overview of the state of AI & Hardware in US and China. US leading in AI, China leading in hardware and drones. We have a lot of work to do.
https://www.youtube.com/watch?v=1_ZB7O_9hlQ
35. "In other words, failed entrepreneurs in Canada risked jail time and stigmatization for decades after America had widely embraced business risk and its long-term economic benefits. And it wasn’t just Canada. Commonwealth countries around the world have similar endemic risk-aversion due to their common historical experiences (thanks Britain 🤦♂️).
Today, risk-taking founders in the United States are broadly encouraged and supported by their communities as they pursue the American Dream. In contrast, most Commonwealth cultures have some form of “tall poppy syndrome,” where successful, ambitious individuals are frequently cut down by their community instead of celebrated."
https://chrisneumann.com/archives/lets-celebrate-risk-taking
36. Eye-opening discussion on the importance of drones & AI in the new world of war. Firestorm Labs is critical to this.
https://www.youtube.com/watch?v=iFv3WaN23S8
37. "Energy is one of the most valuable commodities in the world. Humans need energy to create a more abundant, prosperous future for our children. In fact, there is no high-income country that consumes a low amount of energy.
This trend is not going to reverse. As technology accelerates, so will energy consumption. Because of this relationship, a key investment theme of the future will be selling energy to the businesses willing to pay the highest price.
As a capitalist, I want to be an energy dealer.
It will be very valuable to own energy infrastructure that can service modern society. These energy infrastructure companies will sell their energy to people using GPUs for artificial intelligence, ASICs for bitcoin mining, and many other use cases. The new energy consumption use cases need a new energy infrastructure partner."
https://pomp.substack.com/p/my-plan-to-become-an-energy-dealer
38. Very informative view on what’s happening with AI infrastructure space.
https://www.youtube.com/watch?v=-y5aDmKbEj8
39. "Today - the equation is changing. Fund sizes have ballooned significantly. There are different pools of LP capital available with a lower cost of capital (ie lower return expectations). So much so, that the 2% part of the equation is very meaningful given the size of funds! In the past, to “get rich” as in investor it was all about maximizing the 20%. Today, with fund sizes where they are, many are instead looking to optimize for the 2%. This means raising as much as possible, and deploying as much as possible (as quickly as possible). Remember, the management fee is “guaranteed.” The 20% (the carried interest) is variable. It’s economically rational to look to optimize and maximize the guaranteed portion…
It’s important to call this out because this is where the incentives start to diverge between GPs and Founders. In the past, the only path to “get rich” for GPs ALSO resulted in a “get rich” path for founders. Today there is a “get rich” path for GPs where the outcome of the founders is irrelevant. Doesn’t matter how the underlying companies in a fund perform, you collect the annual management fees regardless.
In summary - the venture ecosystem has evolved significantly in the last 5 years. For founders - ask yourself this question when deciding on who to work with. “Am I working with a 2% or a 20% venture firm?” The 2% firms are optimizing for deployment. The 20% are optimizing for large company outcomes. There’s one path where the incentives are aligned. I’m not meaning to imply big funds = bad. But there is a culture and mindset that starts to creep in the larger and larger funds get, and it’s up to founders to determine which investor falls into which bucket."
https://cloudedjudgement.substack.com/p/clouded-judgement-102524-misaligned
Greed is a Tool: Leveraging Your Own and Others
The Wall Street movie speech by Gordon Gekko is world famous. I know many young kids growing up who knew it by heart. It’s short, simple and powerful.
“The point is, ladies and gentlemen, that greed -- for lack of a better word -- is good.
Greed is right.
Greed works.
Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.
Greed, in all of its forms -- greed for life, for money, for love, knowledge -- has marked the upward surge of mankind.
And greed -- you mark my words -- will not only save Teldar Paper, but that other malfunctioning corporation called the USA.”
Source: https://www.youtube.com/watch?v=VVxYOQS6ggk
This is why capitalism works. It taps into natural human behavior. The need for more.
Any system, whether governmental like communism or a religious one like Christianity that try to control or limit this element of human nature is usually ineffective in doing so. But trying to crush and restrain it like they have tried in the Soviet Union, North Korea, Venezuela, Cuba among other places leads to massive poverty and human despair.
The counter point is this is why America is a capitalist’s dream. As messed up as the place is, I love it. It’s a society that channels ambition and drive. And rewards it tremendously in many cases. That is why there is so much wealth inequality here.
It’s not for everyone. But for the ambitious, driven and those willing to do the required hard work, this is the best place for you. Environments matter. I never would have gotten where I am without being here. Surrounded by plenty of greed and plenty of fear too. It’s a tremendous platform for impact.
Greed leads to drive. Greed leads to clear interests. No relationship lasts long without clear mutual interests. The search for more and better. This is hard wired into all of us from our caveman days. And there is no point fighting it.
In fact, we should understand this evolutionary drive for more, control and channel it. Direct it to good things. Accumulating for the right things & reasons. Make more money and more resources for your freedom, for your family, for your ability to help others. To donate to charity and support causes that are society positive. Treat it like the tool that it is and channel your greed for good.
Variable Costs Versus Fixed Costs: Lessin’s Lesson
I was introduced to this concept of Variable costs versus Fixed costs in this wonderfully insightful book called Lessin’s Lessons, written by the father of iconoclastic VC Sam Lessin. His father Bob was a brilliant investment banker and Angel investor during the first dotcom boom in the 90s. Because he had several life threatening illnesses through his early years he wanted to write down lessons for his kids. It’s really great.
One of the concepts he discusses is the idea of variable costs versus fixed costs in life. It sounds very personal finance which it is but it has good relevance to how one lives their lives. So stick with me here for a bit.
Fixed costs are things you have to pay for every month. Your mortgage payment, tuition or car payments, utilities, taxes, your phone bill. It’s the bare minimum you have to cover every month no matter what.
Variable costs are those that you pay sometimes and the amount also varies. This could be a book, food, a trip somewhere or even a phone or computer.
He talks about how his son Sam treats most of his costs as variable. Instead of leasing or buying a place, he pays by the night at a friend's apartment so the costs become variable. He has a policy of having bare bones costs structure and disdain for flashy expensive things showing klout.
It’s an interesting philosophy. Think about our own lives, we start with variable costs but as we get older and have a family as well as lifestyle creep, variable costs become very high fixed costs.
I can tell you all about how expensive supporting a family is. Especially as you want them to have a good lifestyle and also due to some guilt from not being around much. But for most of us we also get trapped in the hedonistic treadmill that I wrote about before.
The trip that used to be variable now becomes normal and a need not a want. Luxury goods become expected. The $500 dollar bottle of wine eventually becomes a thousand dollar bottle of wine. Business class is always better than economy. 5 or 6 star hotels like Mandarin Oriental are hard to beat.
It’s hard to downshift or downgrade your lifestyle. But the irony is that we eventually do as we wise up and start to understand what we truly like and don’t like. When we truly understand what is a need versus what is a must. This definitely helps you get maximum ROI on your spending and not waste money on non essential or things that give you no joy. Damn I wish I learned this earlier.
There is deep relevance to the startup world here too. Think about the bloated growth stage startups who gorged themselves on cheap VC capital and spent it on buying tech that was not useful and hiring people they didn’t need. Variable costs became fixed costs and as the VC money train disappeared and the expected revenue did not show up, they are in for some major pain. Which usually means ugly layoffs and cost cutting to get to break even or profitability, scramble for a working business model if there is no product market fit or worse they just linger like zombies until the business dies.
So the lesson from Lessin, keep your cost structure low by thinking variable costs not fixed costs. And this will give you the freedom and flexibility to survive and take advantage of the opportunities that inevitably show up on the down cycle.
Be the Heel or Be the Face: Why World Wrestling is a good school for Personal Branding and Investors
I grew up watching professional wrestling aka WWF now WWE when I was a kid. I swore it was real but like most things on tv it turned out to be fake, basically it was a soap opera with fighting. But it was damn addictive.
I learned some new terms about the wrestling industry from my new favorite podcast called “More or Less” starring some top tier tech investors, operators, power couples, the Morins & Lessins, who discuss the zeitgeist of Silicon Valley. It’s entertaining, educational and fun.
Of course in an episode it got around to the conversation on Elon Musk and his ownership of X formerly known as Twitter. How he has just gotten unhinged online in the last year. But Dave Morin used the terms “Heel” and “Face”.
Elon Musk started off as a Face, a positive, the good guy and hero in the show. But as more information came up on how he treats people, as well as his more right leaning political views, he gets more engagement from being the “heel”. Otherwise known as the bad guy of the show, the person trying to elicit negative feedback from the crowds. These are actual characters being played.
We all play this character and some of these we lean into. Most VCs want to be the “face”, being founder friendly and supportive. This is a good thing. But as I’ve said before, your job as an investor and ally is to also give bad news, to push and question founders on their plans, cost structure so they can perform better.
If all you are doing is “Face” work, then you are abrogating your duty to the founders. Yes, it’s hard to be direct and question founders especially if you think they are going in the wrong direction and putting their business at risk. If you truly want what is best for your founders and for them to get better you have to be a heel sometime. This is how you earn your way to be their trusted advisor. Cheerleading when times are tough or good is fine but your job is also to help them look past corners and avoid potholes.
This is why most venture investors suck at their job and will have no place in this industry. And I mean the venture industry globally. This is endemic in Silicon Valley. But being the Heel all the time is also bad, which is what I see in most of the emerging ecosystems. You need both.
For better or worse, at least in the startup ecosystem I’ve fallen into the “Heel” role as investor. I try to be the face and act positive for my founders. But I also have to make sure I counterbalance too much unrealistic optimism and naivety when it potentially will kill or hurt the company. So venture investors, DO YOUR JOB! Be a heel and a face.
Marvin’s Best Weekly Reads November 17th, 2024
"Always do your best. What you plant now, you will harvest later." —Og Mandino
"I started off this post by stating, “if you’ve ever been in sales, then you know that the deal isn’t done until the money’s in the bank.” Whatever you do, don’t take your foot off the gas during closing.
Term sheets are generally non-binding, which means that investors in most countries can legally pull out up until the moment that the shareholder agreements are signed. Absent something materially negative being discovered during diligence, this is morally reprehensible, but it does happen.
The best thing you can do to preempt “buyers remorse” with your new investors is to continue making progress and closing sales, onboarding new users or releasing new features during the 3-5 week closing process. At a minimum, send weekly updates to show them the progress you’re making and keep them excited about their new investment.
And have a backup plan. It sucks to think about, but what will you do if the investment falls through?
Remember: you’re selling up until the moment investors wire the money. Never lose sight of that."
https://chrisneumann.com/archives/what-happens-after-you-sign-a-term-sheet
2. "The internal contradiction (a fatal flaw) of tribal governance is that tribal cohesion requires hyping the threat posed by the opposing tribe.
Ever escalating threat. This dynamic dictates that to maintain cohesion (due to inevitable desensitization) or increase it; networked tribes will increasingly hype the degree of threat posed by opposing tribes and everyone connected to them. Opposed people rapidly transition from being wrong to bad and finally to (absolute, horrific) evil. Minor threats become existential or genocidal.
Swarms (see the GG Report; “How Swarms Work” for more). Networked tribes don’t have formal leadership — they are open source (anybody can grab the baton and lead if they successfully advance the war against the opposite tribe) — and trained (constant network reinforcement) to hate the opposition. This makes them prone to self-mobilize as swarms that seek to overwhelm the enemy. We’ve seen this with the cancellation of people (bans, lost jobs, etc.) and recently at the level of global war (swarms seek to maximize escalation until complete victory over the target is achieved).
Total tribal war and national suicide. A nationally dominant networked tribe, locked in by a tribal network that shuts down all opposition, will seek to remain dominant by continuously amplifying threats. Threats posed by tribally antagonistic domestic populations and countries (a pre-network variant of this was the secret sauce of 20th-century fascist governance, but it proved fatal).
Domestically, an escalating perception of existential threat will eventually justify (tribal networks and traditional tribes don’t see enemies as human beings) authoritarian suppression, internment, and (potentially) genocide. Internationally, this will set the nation on a path of war with an ever-growing number of enemies (eventually, all simultaneously). In short, it is a path to national suicide and a global proscription of the nation, the people, and the tribe’s way of thinking when it is inevitably defeated."
https://johnrobb.substack.com/p/the-tribal-election
3. "Karp’s lab operates on the principle of diversity—bringing together experts from different fields, backgrounds, and countries. This diversity fuels creative problem-solving and opens up new possibilities for innovation. As he explained it to me:
"My lab in some ways is like a playground where there's no specific disease focus, no specific technology focus... We populate the lab with people from different disciplines. So minimal overlap of expertise...We've had engineers, biologists, immunologists, a gastrointestinal surgeon, a cardiac surgeon, a dentist... maximizing diversity of thought, diversity of expertise, diversity of tools."
https://99tech.alexlazarow.com/p/igniting-your-startup-potential
4. "A false signal I see a lot with early stage AI-first companies is excitement around AI is misinterpreted as likelihood to buy your product.
As companies of all sizes are figuring out their AI strategy, many are signing up for new products, taking meetings with founders, and collecting as much information as possible with no intent on buying your product.
While many of these conversations can be a helpful way to learn more about the challenges companies are currently facing, founders must be especially protective of their time and know when to cut off time wasters.
BANT, an acronym for Budget, Authority, Needs, and Time is a classic framework for evaluating if someone is likely to buy your product."
https://brianne.substack.com/p/a-lesson-for-ai-first-companies-excitement
5. An excellent rundown on latest news on SpaceX, Elon, Tesla and Nvidia.
https://www.youtube.com/watch?v=hdK8OFA903I
6. This is the wake up call that every B2B SaaS founder needs to have. Mr Lemkin gives very valuable guidance for how to thrive in this present environment. It is a must watch.
https://www.youtube.com/watch?v=I5sPLOkAZPE&t=172s
7. There is some great career advice here: never rest on your laurels, how to take risks and think long term. How to be a steward & leave things better than when you found it.
https://www.youtube.com/watch?v=nQAZ3iV3gSg&t=4s
8. Another great episode of More or Less, what's up Silicon Valley.
https://www.youtube.com/watch?v=cjcf7O9rerQ
9. "For entrepreneurs, I recommend incorporating a failure segment into your regular all-hands meetings. This way, employees consistently hear the message that thoughtful risk-taking is encouraged. Celebrate the fact that the more you experiment and learn, the faster you grow, both as an individual and as a business."
https://davidcummings.org/2024/10/19/highlight-an-employee-failure-at-the-town-hall/
10. "Whenever an empire is crumbles, one of its final acts is almost always the desperate attempt to cling to the remaining vestiges of its wealth.
It happened in the 1920s during the German Weimar Republic, when the government implemented controls to prevent capital from haemorrhaging out of the nation.
It occurred again at the end of the Vietnam War as Vietnam’s communist government seized assets to prevent citizens from fleeing with them.
Again, capital seizures were implemented by Iran’s Islamic government after the Shah was overthrown in 1979.
And it happened during the final days of ancient Rome, before the empire collapsed completely.
Unfortunately, this is also taking place all over the West in the present day."
https://anticitizen.com/p/it-s-theft
11. "Lesson: You can learn anything. Choose speed not credentials."
https://oldbooksguy.substack.com/p/self-taught
12. "You aren’t going to pay someone $30k to clean your house if the market rate is $10-15k. It just isn’t going to happen.
The same is true with businesses. They don’t hate you, but in the end it comes down to money.
You were hired to do a job, and if someone can do the same job for a much cheaper price – they’re going to make the switch just like you would replace the old cleaner.
This is just how the world works.
Of course, from the cleaner/employee’s perspective, this is “unfair”.
https://lifemathmoney.com/do-employers-care-about-you/
13. "Rather than relying on a bloated board or long-term advisors, focus on building a lean, agile team with short-term expert input when necessary. Keep the focus on what drives value for your company—not pleasing outsiders or chasing prestige."
https://pierregaubil.substack.com/p/cut-the-fat-why-your-startup-doesnt
14. "I want to index my beliefs and unpack a bibliography of the sources behind them so that I understand why I believe what I believe. Understanding what I believe will, truly, be arriving somewhere I’ve been before and knowing it “for the first time.”
And I think, despite the flood of information we're exposed to every day, we would be better suited if we took the time index our beliefs. Whether it's the beliefs that determine how we live our lives, the religions we subscribe to, the investments we make, the companies we build, or the relationships we prioritize. Beliefs are made better through scrutinization."
https://investing1012dot0.substack.com/p/my-cup-runneth-over
15. "If you’re in a room that never echoes back your own views to you, you’re not just in the wrong room, you’re actually on enemy territory.
How often should an echo chamber echo back your ideas to you is a technical question, and therefore a boring one, and therefore outside the scope of the current essay. The balance-worshippers will say it should be 50% agreement, 50% disagreement.
I would set up the ratio differently. But over and above the technicalities lies the fact that echo chambers are good, actually. Echo chambers make you sane and effective. Echo chambers are the birthplace of shared anthems, shared goals, and shared warcries. And where we are headed, you will need those things."
https://oldbooksguy.substack.com/p/in-defense-of-echo-chambers
16. "Lately I have had many days where I feel likeI am living through the elder millennial equivalent of the venture capital business. I am close enough to the emerging manager phase of our fund to still identify with that experience and feel very close to what those managers are going through. But I’m no longer fully in that world.
I also don't feel like our firm has graduated to being “established” as I have no idea what that means or what it takes to get there. I also have not gotten to the “get off my lawn” phased of being a really experienced VC who has seen and done it all."
https://chudson.substack.com/p/no-longer-emerging-not-yet-established
17. Future of AI and Sales in SaaS. This is an info-dense discussion. Must watch for B2B CEOs.
https://www.youtube.com/watch?v=9FIQLx_Zi9E
18. "There are always multiple ways to win – In our second session, you can see the diversity of different approaches to winning. Dave Yuan from Tidemark and Adam Bain have VERY different styles to growth investing and Matt Auxier from University of Chicago has invested across the landscape of growth and early stage. This serves as a reminder that there is no single way to win and the importance of owning your own playbook, rather than following those of others."
https://newsletter.equal.vc/p/reflections-of-an-emerging-manager
19. "What has been getting worse over the past decade, and then particularly bad over the last few years during the pandemic, is that middle-income households are increasingly squeezed,” she says.
These households that could once afford a typical home in a variety of locations in their metro area now have fewer and often less desirable options. And, if nothing is done, exclusivity may spread farther."
https://thehustle.co/originals/the-rise-of-exclusive-communities-in-america
20. "Let’s talk about the elephant in the server room: Transformers — the core technology behind large language models like GPT, Claude, Gemini and Perplexity. Unlike older models that processed data sequentially, transformers handle massive datasets in parallel, simultaneously juggling billions (sometimes trillions) of parameters. This exponentially increases the amount of number-crunching required for training these models, demanding significantly more GPUs and specialized chips, exponentially increasing their electricity use over previous models like recurrent neural networks (which struggle with larger datasets).
The power hogging doesn’t stop at training, though; these models use power every time they are prompted — a single ChatGPT prompt can use up to 10x the power of a conventional Google search query.
We have made an incredible leap in AI technology at the cost of increased power demand. But in the larger scope of humanity, I believe the trade-off is worth it — these new AI models are already helping us diagnose cancer, find clean geothermal energy sources, and boost our overall productivity. And we’re still in the first inning — we’ve barely scratched the surface of what AI can do for our society"
https://www.benparr.com/p/ai-nuclear-power-smr-microsoft-google-amazon
21. "Whether or not the tech industry answers the “AI’s $600B question” or Nvidia stays dominant, the die has been cast and there are many more important challenges to address.
When the Telecom Bubble burst, we were left with $1 trillion of telecom equipment that set the stage for the next wave of internet, mobile and cloud computing.
After this rush of AI infrastructure spend and research, we will be left with the ability to manufacture intelligence at scale. Even if it feels a bit bubbly and overhyped right now, the ground truth is that the current wave of AI will change every aspect of society"
https://www.readtrung.com/p/jensen-huang-dario-amodei-and-manufacturing
22. "A possible alternative, deploying a non-nuclear strategic deterrent to implement a conventional countervalue posture is also challenging, but arguably much more feasible. Simply by advancing its long-range strike capabilities, Ukraine will naturally move in its direction.
The key question is how targeted the Ukrainian effort will be to employ its long-range strike arsenal as a strategic deterrent, rather than as a simple warfighting tool, and how much money Kyiv is willing to allocate to this end over other competing priorities."
https://missilematters.substack.com/p/nuclear-and-non-nuclear-deterrents
23. "If the U.S. abandons resistance to China and Russia, it will go very badly for America’s allies. Europe will probably fracture again, with some states (probably including Germany) falling all over themselves to appease the Russians. Russia will then become a sort of de facto hegemon in Europe. In Asia, China would probably conquer Taiwan, cutting off U.S. semiconductor supplies and establishing Chinese hegemony in East Asia. Japan and South Korea would then be forced to choose between either becoming nuclear powers or becoming de facto satrapies of the new Chinese empire. Essentially, America’s major allies would fall to America’s enemies.
Americans — or, at least, Trump supporters — might yawn at these developments. But if Germany, France, Japan, South Korea, and America’s other allies fall, it will dramatically weaken America’s ability to defend itself. Remember that China is four times the size of America, and manufactures well over twice as much. Without its coalition of allies, the U.S. just doesn’t have the size to stand up to China.
And even if they de facto conquered Asia and Europe, China and Russia would not simply ignore America and let it go on its merry way. The specter of a U.S. revival would haunt them. They would therefore do everything they could to weaken America. Obvious steps would include 1) economically strangling America by cutting it off from trading routes and natural resources, and 2) sowing continued internal dissent in America in the hopes of causing it to collapse into a civil war.
Bereft of its coalition of allies, America would be far less able to resist those efforts. Americans would suffer economically even as China and Russia stoked their hatreds and divisions. The worst ideologies of Trump’s first term — alt-right fascism, leftism, radical identitarianism, and so on — would all come back with a vengeance, encouraged by diligent Chinese and Russian online propagandists. Only now they’d also have a bad economy to fuel their anger."
https://www.noahpinion.blog/p/the-free-world-teeters-on-the-edge
24. Some good insights on how to invest, manage and grow a startup.
https://www.youtube.com/watch?v=qvqg4aTq1zM
25. "Just how bad is Taiwan’s energy situation and how did it put itself in such a vulnerable position? How might China exploit this situation if hostilities break out? The numbers might come as a bit of a shock. Let’s take a look.
According to data from the Statistical Review of World Energy, Taiwan relied on fossil fuels for 91% of last year’s primary energy needs, and virtually all of the oil, natural gas, and coal it consumed was imported. It has become particularly dependent on imports of liquefied natural gas (LNG), averaging 2.65 billion cubic feet per day (bcf/d) in 2023, a fourfold increase since 2000. Natural gas and coal alone fuel 82% of Taiwan’s electricity production, and any prolonged disruption in supply would swiftly result in a crisis.
Recognizing this strategic weakness, China has regularly practiced military drills that simulate how it could blockade the island, signaling to the US in particular that it need not undertake a full invasion to bring Taiwan to its knees."
https://newsletter.doomberg.com/p/indefensible
26. "Entrepreneur is a synonym for salesperson, and salesperson is the pedestrian term for storyteller. Pro tip: No startup makes sense. We (entrepreneurs) are all impostors who must deploy a fiction (a story) that captures the imagination and attracts capital to pull the future forward and turn rhyme into reason. No business I have started, at the moment of inception, made any sense … until it did. Or didn’t. The only way to predict the future is to make it.
This is not the same as lying. There’s a real distinction between an entrepreneur and a liar: Entrepreneurs believe their story will come true, as they are laser-focused on making it true. A liar, well, they know they’re misleading people with false data. Usually for money (i.e., fraud). This is where Tesla turns gray."
https://www.profgalloway.com/tesla-wtf
27. "What I’m saying is that either candidate has the potential, like all of us, to rise to the occasion. But we can't lie to ourselves, neither of these candidates, in their current form, could hold a candle to a figure like Otto von Bismarck.
The Biden administration currently has the head of the CIA handling Middle East negotiations a spy chief is not typically seen as the most trustworthy figure in a government.
Trump had his son-in-law, Jared Kushner, managing Middle East matters. Trump proposed an Israel-Palestine peace plan without giving the Palestinians a say in the matter, and a few years later, we have a war between Hamas and Israel. Not the most effective approach to diplomacy.
Still, we hope for the best."
https://www.globalhitman.com/p/a-pivotal-point-in-history
28. "Whereas if you are trying to be a “creator,” or more simply an artist, people are spending a lot of energy focused on trying to turn the path into something that maps to the stories about work they grow up with (a career, stable, provides growing income, etc…)
So if you are curious about exploring this whole new creator world, I think the best strategy is to try to find a job inside one of these teams. There are a lot of these gigs if you know where to look. If this world existed in 2015, that likely would have been my path. But I just had no idea what I was doing.
Bottom line: work is definitely changing. Almost everyone I talk to in any kind of work says that things feel weird. They don’t know the best strategy for a career anymore. They have mixed feelings about remote or in-person work. And that means its going to feel weird.
But like always, we will learn and adapt."
https://newsletter.pathlesspath.com/p/laptop-man-and-new-remote-realities
29. "One of the statistics that raised eyebrows in Nvidia’s most recent quarterly earnings was its customer concentration - 46% of revenues came from just four customers.
It doesn’t take much guessing to figure out who those four companies are.
MSFT, AMZN, META and GOOGL are ramping up capex to the hundreds of billions because they’re locked in a capital arms race - the stakes are so high that investment from one hyperscaler elicits a response from the other."
https://akashbajwa.substack.com/p/concentration-in-the-ai-value-chain
30. 996. Hard core mode. This is what it takes to go big, trillion dollar big. Something many folks forgot during the ZIRP era.
https://www.youtube.com/watch?v=kaH_hz8XUoI
31. Good and alternative state of Venture capital. I lean more toward Bryce and Indie.vc's view. This is the future. The other end of factory farm industrial VC.
https://www.youtube.com/watch?v=INJPNaB_Rmk
32. "Our defense industrial base more closely resembles European sclerosis than America’s dynamic capital markets. It’s really hard to build a successful defense business, but not for any technical reasons or lack of capital. In America, 10x engineers are in the water. If you talk to any recruiter hiring for defense companies, the most challenging position to fill is the Head of Business Development.
There just aren’t that many individuals that know how to scale a business in an industry defined by regulatory capture (e.g., does your company have the right clearances, do you personally know the PEO, did you lobby the right legislators, etc.) Banning the revolving door doesn’t change this reality and would only further hamstring new entrants trying to break in.
But revolving door executives are not magic beans that companies can plant to Jack-and-the-beanstalk their growth (if only it were that easy). According to Senator Warren’s 2023 report attacking the revolving door, Boeing had more revolving door hires than any of the other Top 20 defense contractor—they clearly didn’t hire enough. And the rent-a-general taking a sinecure on a company board is an all too common meme."
https://kinetic.reviews/p/the-virtue-of-the-revolving-door
33. This is excellent and lots of good insights for living a better life.
https://www.youtube.com/watch?v=OBAwmS-vkV4
34. Mr. Lemkin dropping some knowledge. Must listen to for those raising VC money.
https://www.youtube.com/watch?v=sUIpqviEWBE
35. "Life advice: People who ask 10,000 questions never take any action at all. If you have any sales experience whatsoever, you know this already. The guy who wants to learn about every feature and has tons of little queries never makes the purchase. He only wastes your time."
https://lifemathmoney.com/how-to-know-if-someone-is-ngmi/
36. "In Europe, showing off like the Rockefellers, the Carnegies, or the Fords would be looked down on. Across European languages, the word for ambition has a negative conotation. As a result, ambition is not celebrated as often with public works and is not as visible or tangible.
It trickles down to all levels. American children probably spend a dangerous amount of time comparing themselves to others, trying to one-up each other. It boggles my mind, but my children’s German friends spend the same amount of time and effort to make any differences with their friends unapparent."
Talent Mobility in a Deglobalized & Multipolar World: Learning from Genghis Khan
As a history buff, I read a tremendous amount of books. Most recently finished “The Mongol Storm” by Nicholas Morton, which described the scary story and impressive impact their conquests and invasions had on most of Asia, the Middle East and even Eastern Europe in the 13th century. It was a terrifying horde from the harsh environment of the steppes, unified and led by a military genius named Chinggis Khan (Genghis Khan in western parlance) that literally changed everything in the geopolitical order at that time.
Old political dynasties were destroyed and immigration of entire peoples fled before their wrath. Their empire spanned China, most of the Middle East & Central Asia, all the way through modern day Turkey, Russia & Ukraine to even parts of Eastern Europe. It was huge and probably surpassed the old Roman Empire or at least matched the one of Alexander the Great. They had clear rules: Defiance and resistance would end in terror and death but surrender and loyalty would receive security and prosperity. It worked very well.
After the initial destruction and disruption, they were able to connect continents and unify trade routes from all over the world. The Mongol conquests reshaped the Near East and the process of Globalization really began during this time. They encouraged commerce and the sciences. Recruited talent from all across the empire. This led to a massive interchange and exchange of trade, ideas and talent between Asia & Europe, arguably, the beginning of the connected world we live in now. The conquests inevitably broadened peoples world views and opened their minds. Knowledge increased dramatically.
“In some cases these specialists might spend their entire lives plying their trade in places like the Venetian shipyards: “the Arsenal.” In most cases, however, a ruler rarely possessed the money or the need to retain an artisan’s services for more than a single project or for a few years, so the latter customarily moved from state to state, crossing cultural boundaries and plying their trade wherever it was required.
This very mobile workforce was much in evidence across the Near East in the medieval period: the Crusader States hired Armenian siege engineers; the Egyptians constructed ships according to a design created by a Sicilian shipwright; both the Mamluk sultan and the Ilkhans employed Frankish shipwrights; silk weavers from Mosul took refuge from the Mongols in the Crusader States (and, by extension, silk weavers from the Crusader States seemingly set up workshops in Paris); the Ayyubids occasionally hired Frankish knights to train their warriors;60 and an architect from Ayyubid Damascus designed the Anatolian Seljuks’ great mosque in Konya.
In short, the workforce was mobile and hireable, meaning that technologies and personnel flowed easily and quickly across religious and ethnic boundaries. This often had the effect of flattening the technological balance of power between societies because in many cases they all had access to the same artisans.”
But fast forward to 2024, as I’ve written many times, the world is fracturing again. Between the Global West (North America/ Europe/ Japan & Australia/New Zealand), the Global East (Russia/China) and Global South (Southeast Asia, Latam, Africa and the Middle East). Or as Balaji calls it Woke Capital, Communist Capital and Crypto Capital. Globalization, while not completely ended, is fracturing into these various blocs, where the bulk of the trade will be within these structures and not with each other.
In this new world, there will still be many opportunities for those willing to travel and even emigrate to new places. Possibly the Global South which is where the major growing populations are. Places like Singapore, Dubai, Abu Dhabi, Panama and possibly a surprise for many people: Bangkok, Ho Chi Minh City or Riyadh that are growing clusters for talent and where smart ambitious people are rewarded for their willingness to move.
In the Global West it could be cities like Tokyo, Tirana or Seoul. Where the smartest and most ambitious people go will always change. It used to be London during the 1800s. San Francisco, Los Angeles, New York & London have seen a massive decline during the pandemic but seem to be making a resurgence now. Talent, just like capital, will go where they are most welcome & see the brightest future. The flexible and the mobile will win big in this new world.
Undiscovered and Overlooked Assets: Value Investing in Life
Growing up studying history I’ve always been fascinated by history. Everyone knows about ancient Rome and Greece or the Italian Renaissance or the Napoleonic Wars. I love those periods too. But for me it was the obscure stuff.
Did you know that Hungary, Poland & the Czech Hussites during the Middle Ages were great military powers? Or Spain's army was unbeatable for several hundred years across Europe? Or about the Great Latin American war between Paraguay and, well, almost every major country in Latam. Super obscure.
I wonder sometimes why I am so driven to discover relatively unknown but amazing books, ideas and even places. Kind of like value investing but for life. It's way more fun to be emerging than to be emerged. To find the unobvious. To surface something looking back in retrospect seemed so obvious. This is my juice.
For travel, yes, I love fairly well known and popular places like Hawaii, Japan, Turkey, Thailand or Argentina. But for me the attraction was always for the overlooked but awesome places. Places like Ukraine, Saudi Arabia, Albania, Taiwan, Finland or Serbia.
And I love being relatively early before the crowds show up. Case in point I loved Lisbon and Portugal when I first went in 2015. Fast forward to 2024, I find it way too overrun with tourists. It’s lost its interest to me even though it’s still a beautiful place with amazing food.
Interesting how your curiosity and interests in life bleed into your career and how your career bleeds into your life.
It’s probably why I was drawn by the art of venture capital. Investing in overlooked geographies, founders and industrial sectors. If you do a deal and everyone thinks it’s a good deal, you probably missed something or are too late. I was early in B2B SaaS & Developer tools in 2014, relatively early in Insurance-tech back in 2015. And it is now definitely still early in the Defense/Militech space & Manufacturing-tech but boy is it exciting. (For all you peacenik critics of this, I don’t like that war and the need for a growing military industry is needed but it is now a reality in a deglobalizing and newly multi-polar world. Quoting Trotsky: “You might not be interested in war, but war is interested in you” )
Quoting my friend & legendary seed VC investor Mike Maples Jr. quoting legendary capital investor Dave Swensen: “you want your portfolio to be uncomfortably idiosyncratic.” Or put another way, you want to be misunderstood which usually equates to being very very early in the tech and consumer trend game.
This is the only way to generate real returns and alpha. It’s easier said than done as it requires conviction and courage to move against the crowd. You also need to be comfortable having haters and doubters. But if you have a clear thesis on the future and have done your homework, stick with it and give it the time until the market moves your way. Magic eventually happens.
Sun Moon: Loss, Growth, Taiwan & Travel
I always end up watching random movies on my many flights. I found this b-grade movie called “Sun Moon”, about a young American girl from a small town who gets left at the altar by her fiancé. Living in a typical small town, she is tired of the whispers and pity. With a young sister in college & an ill mother in the hospital, she decides to randomly move to Taiwan to teach English at the Taiwan Adventist Academy high school.
And her adventure begins. After a rough start with jet lag, apathetic Taiwanese teens and culture shock, she begins to adjust. She starts to bond with her students, explores the beauty of underrated Taiwan, and falls in love with her handsome Taiwanese colleague. It’s a surprisingly warm and lovely story. It also shows how kind and warm Taiwanese people are.
It reminds me also of my own story, moving to Taiwan in 1997, meeting new friends and more importantly meeting a beautiful girl. Led to us getting married, having a brilliant and amazing little girl, building a family. It used to be my main source of joy & happiness at least until the pandemic lockdowns in 2020.
I’m not particularly religious but count myself spiritual. Or at least I have become more so over the last few years. There was a great quote in the movie.
“I think God uses everything. The way you love, the way you hurt, your mistakes, your whims. I guess if you are stuck, you have to take a leap of faith.”
If things are bad, you need to make a big move. Take action. Do something, anything.
The movie reinforced my sense that if you are in a bad situation, sometimes it makes sense to leave your old home and environment. A New environment gives you new perspectives. Some time away from your old place can help you heal. Or to allow yourself to gather strength to recover and then deal with the situation better.
What I liked about this movie also was how distance can help you rediscover the important thing you are running away from. You can hide but not forever. It always catches up to you. Whether that is love, religion and family.
“There is a time for everything. To everything there is a season.”
Marvin’s Best Weekly Reads November 10th, 2024
"Success isn't always about greatness. It's about consistency. Consistent hard work leads to success. Greatness will come." —Dwayne Johnson
"When you look at manpower, the Russian government has significantly increased the payouts and benefits to recruit personnel. The reason for that is straightforward. It’s clear that at this rate of loss, the Russian contract recruitment campaign is unable to keep up. This too does not mean that Russia is going to run out of manpower, but it’s clear that they’re struggling, and they are not likely to be able to sustain this pace of operations, staying on the offensive with this rate of loss.
The way I would put it is that the Russian military is actually operating under significant constraints. Given the likely decline in the relative advantage at the front line, Russia’s potential negotiating position actually isn’t all that strong. And while Russia has the resources to sustain the war in the near term, looking just a bit beyond that you see a fairly problematic picture in terms of the rate of inflation in Russia’s overheating economy, the deficit of skilled labor — because the state is pulling workers into the defense industry and contracting them to fight in the war — the steady depletion of Russia’s liquid reserves, and the fact that much of the budget is tied to the current oil price. The economic picture for Russia isn’t particularly rosy. The effort to juggle several different parts of this equation may not be sustainable. And this too must at some point weigh on the Russian leadership’s mind."
https://nymag.com/intelligencer/article/ukraine-war-why-russia-is-in-more-trouble-than-it-looks.html
2. This is a grim outlook for geopolitics and the economy from Simon Hunt.
https://www.youtube.com/watch?v=wMxgtbmOU1E
3. "Here’s the bottom line: In this next new era, risk capital available for startups will be much less concentrated in a few Sand Hill Road firms doing old-school equity financings. It will be much more distributed, and much more diverse in the ways that financings are structured.
For entrepreneurs, I think this is a good thing. As I’ve written before, I don’t think the unicorn obsession was necessarily good for us.
2025–2035 will look a lot different than 2010–2022. And I am so here for it."
https://medium.com/@bretwaters/the-venture-capital-landscape-changing-c762f33e8c73
4. Educational conversation on the race to AGI.
https://www.youtube.com/watch?v=wMQoDRTWwUg
5. What a terrifying new world of war.
https://www.youtube.com/watch?v=EEXI6r08908
6. "How good of a CRM could a software company build with a $10m annual budget & with AI? It’s the equivalent bet to funding a startup with a $20-30m Series A & a big design partner.
Technology is always commoditizing itself. Perhaps bespoke software will have the same impact in sales as in customer support. That would provide Klarna a sustainable competitive advantage over time.
It’s also a forcing function to require the organization to rethink their workflows in the age of AI. More than just changing software, burning the boats & forcing a company to reimagine workflows with a blank slate can be a powerful way to drive innovation."
https://tomtunguz.com/klarna-ai/
7. This is always a good show for learning what's up in Silicon Valley.
https://www.youtube.com/watch?v=xHEt2HLxRfU
8. More on what's up in Silicon Valley. Definitely right title: "The crisis in venture" with GV's MG Siegler.
https://www.youtube.com/watch?v=UMizwOPI3w8
9. Strong views whether you agree or not and this is great. Glad to see a more outspoken and authentic Silicon Valley.
https://www.youtube.com/watch?app=desktop&v=CgEWwL_wwQk
10. This looks damn good. Inspiration for training.
https://www.youtube.com/watch?v=Q4gz6Kwpotw
11. The global war broadens unfortunately with North Korean troops training in Russia in preparation to go to Ukraine, opens up massive implications geopolitically.
https://www.youtube.com/watch?v=T0uYxK66VLU
12. Talk about an OG Defense-tech investor. This was incredibly insightful. Strong recommendation.
https://www.youtube.com/watch?app=desktop&v=idpsqCH2VTA&t=3s
13. "My recommendation is to articulate a clear vision, sell the future, and then continuously adapt, solicit feedback, and iterate. The vision is seen, but the journey to achieve it is unknown."
https://davidcummings.org/2024/10/12/the-vision-is-clear-but-the-journey-is-unknown/
14. "Yet Britain’s resolve will only truly become clear if and when a contest for polar assets — or indeed fully-fledged polar war — finally arrives. And in the event, any showdown could come sooner than we think. Long-term oil reserves are one thing. But Russia also has a profound strategic interest in the Arctic in the here-and-now. Last February, Norway’s normally reticent intelligence service publicly warned that nuclear weapons could be present on Russian vessels in the High North. No less important, Sweden and Finland’s accession to Nato also brings the possibility that Western nuclear weapons might be deployed in the Arctic too.
China, for its part, needs the Arctic as well. With sea lanes in the Red Sea threatened by the Houthis, and the Panama Canal with problems of its own, Beijing needs a reliable route from its port at Dailan to Rotterdam in Europe. The Arctic is the obvious choice here, not least when Chinese ships can now make the journey in less than 25 days, and when its economy would surely struggle without it. Britain, in short, seems unwilling or unable to exploit its polar bounty. But its future here may ultimately depend on decisions taken by others — something Keir Starmer and his admirals would both do well to remember."
https://unherd.com/2024/10/britains-coming-polar-war/
15. Mike Maples Jr is a legend. This is an insight deep conversation in startup investing.
https://www.youtube.com/watch?v=b_lqGHKHi5M
16. "In this post, I’ve argued that the primary goal in organization design should not be reducing of span-of-control, but in surfacing conflicts most important to the company. I’ve also introduced a value-add rule that says no department should report into an executive who can’t add value to it. And finally, knowing that consolidation is inevitable over time as a successful company scales."
https://kellblog.com/2024/10/12/design-your-organization-for-the-conflicts-you-want-to-hear-about/
17. A masterclass in founder selling. And software sales in general, especially for enterprise sales. Learned a lot personally.
https://www.youtube.com/watch?v=ROsrlUFAVZs&t=887s
18. I had to watch this. Of course, both Mearsheimer & Sachs are anti-Ukraine which is wrong in my view. Jeffrey Sachs is very much naive in my opinion, CCP is absolutely a massive threat. CCP is pushing aggressively in South and East China seas. I agree more w/ Mearsheimer's view.
https://www.youtube.com/watch?v=uvFtyDy_Bt0&t=13s
19. Geopolitical take here on China and the fight for African resources between China, USA, France, Russia, UAE & Turkey among others.
https://www.youtube.com/watch?v=z2PJF9_9w4w&t=1s
20. "Ten to twenty years ago, none of these worrying laws or actions enacted by our governments were commonplace. Today, they’re growing at a rate that should terrify us all.
Where will we be in another decade from now?
Sure, people aren’t yet being arrested in the West for wearing a t-shirt the government doesn’t like. But we’re very close to that being the case."
https://anticitizen.com/p/heads-will-roll
21. Worth watching if you want to know where AI and compute is going. BG2 is the best show on tech biz right.
https://www.youtube.com/watch?v=Z77jZkYDpIE&t=1736s
22. "Since 2020, according to published reports, the United States has been urging countries in the region to avoid using a Chinese company to repair or lay new cables at the bottom of the sea out of concern that China could intercept and monitor sensitive communications passing through the cables.
It has also been urging companies to route new cables around the perimeter of the sea, avoiding the central part of the waterway claimed by China based on historic maps showing a 10-dash line that infringes on the exclusive economic zones of several other countries.
In what may be an act of retaliation, according to a Washington Post report this month, China has been delaying — sometimes for months — its approval of permits for companies to repair or lay new cables under the sea. The delays have been particularly troublesome for countries such as Vietnam, which is anxious to replace five aging cables that have failed repeatedly, slowing internet traffic in the country.
In the past four years, the U.S. government has blocked at least three cable projects that would have linked the United States to Hong Kong because of concerns that China could spy on or sabotage communications, the Post reported."
23. A deep dive into the future of AI with the man driving much of this. Jensen of Nvidia.
https://www.youtube.com/watch?v=bUrCR4jQQg8
24. "But it's also true that VCs and founders have kept chasing the ghost of pandemic-era valuation excess, thus stymieing exit efforts.
Moreover, Biden had presided over very strong public stock markets that have proven welcoming to IPOs — which is where VCs historically have made their strongest returns — but too many VCs have become so "founder-friendly" as to become lousy fiduciaries.
The bottom line: The VC market's cowardly chickens are coming home to roost."
https://www.axios.com/2024/10/11/venture-capital-deal-slow-liquidity
25. An excellent discussion on what's up with Silicon Valley VC: AI & Defense Renaissance.
https://www.youtube.com/watch?v=nXHQfhQrhfs
26. Incredible & insightful discussion on the art of seed stage investing. This is worth watching a few times.
https://www.youtube.com/watch?v=njgJ4w9DAao
27. "Meanwhile, in pre-Columbus North America, native tribes were engaged in a constant state of territorial warfare. Far removed from the Disney depiction of Native life, to borrow from Hobbes, life was indeed brutal, nasty, and short. With no common language, values system, or acknowledgment of property rights, it was every clan for themselves.
The strong persevered, and the weak perished. Tribes maneuvered almost like gorillas in the wild. Outsiders were deemed a potential barbarian who must be dealt with violently in the interest of self-preservation.
Native Americans failed to truly thrive, and there is no indication it was because they were somehow less intelligent."
https://www.dossier.today/p/why-the-left-canceled-columbus-day
28. This makes me both angry and sad. Disgusted at the lack of strategy, the cowardice and weakness of the USA & Europe. We have let down Ukraine & set them up to fail but it's not too late to turn things around.
"What would a betrayed Ukraine look like? At least it would retain some 82% of its territory. A guilty West would doubtless provide aid to rebuild infrastructure. It might be given a pathway to eventual EU membership (unless that option had been bargained away at the negotiating table), but joining the Western club may have lost its appeal at that point. Ukraine’s corrupt oligarchs would re-emerge from hibernation. The old post-Soviet cynicism would replace the youthful enthusiasm of the Maidan generation. There would be antagonism towards those returning from abroad after avoiding the fight, and – of course – thousands of grieving families.
This should have been Europe’s war to manage. In spite of decades of discussion about European defence, it proved too convenient to rely on US largesse. This made Europe a prisoner of US electoral factors. It also caused Europe to shirk the difficult decisions that helping win the war entailed: the big increases in defence expenditure, the 24-hour working in ammunition factories, the hikes in food and energy costs and the political risks such as seizing frozen assets. What remains now for Europe is to secure a place at the negotiating table and to argue for NATO membership for Ukraine as part of any settlement.
Failing that, the West will have years to repent the betrayal of the courageous Ukrainians, whose only crime was their wish to join the Western democratic order."
https://rusi.org/explore-our-research/publications/commentary/impending-betrayal-ukraine
29. This is motivating and helpful for any budding entrepreneur. We can all learn from Alex Hormozi.
https://www.youtube.com/watch?v=WO5m-roVzjg
30. Good discussion on investing in AI. A good VC needs to be a historian.
https://www.youtube.com/watch?v=QsV2avKGXQM
31. "I’m not a fan of lifetime value (LTV) in startups (how can one predict a 7 year customer lifetime value if the company isn’t yet 7 years old?) But for public software companies with these sparser economics, LTV becomes an important determinant of whether & when to invest more in growth.
If paybacks are 4.5 years & LTVs are five years, that data should provoke strategic questions about the company operations."
https://tomtunguz.com/why-ltv-matters-more-in-2024/
32. "The most interesting point that was focused on was Taiwan. The conclusion of everyone I talked to or overheard talking about China was that Taiwan is a when, not an if. The universal conclusion of what happens after China takes Taiwan - slowly or quickly depending on who you ask - is that China won't face consequences for that. The sanctions mechanisms that have been used to attempt to harm smaller countries like Russia and Iran - who have continued to trade with China - wouldn't work at all on China.
The shipping companies wouldn't have anybody left to trade with. You'd likely have some companies that would only trade with western approved counter parties - but in general, any attempt by the west to prevent ships from loading in China - a country that builds more ships now than any other nation, drives half of global commodities demand, and serves as the world's factory - would be so disastrous that its implementation wouldn't even be attempted. If you believe the shipping guys, the United States has already lost its world leadership position. China is everything.
I don't think people are really willing to talk about what the end of US hegemony means - I brought up "US currency devaluation" several times and I think nobody really liked that topic. But the fact that all of these people - who have their finger directly on the pulse of global trade - see a US/China conflict, or even just China facing any consequences or resistance at all for invading Taiwan - well it tells you an awful lot about how much the world has changed over the past 30 years. China was still barely an industrial power at the end of the 1990s. Now they are the power."
https://calvinfroedge.com/insights-from-capital-link-forum-2024/
33. "And now we come close to the heart of the Art Deco movement: it was futuristic while having one eye in the back of its head. That was the secret to its genius. It embraced machines, new materials, and the future...while never forgetting the primal value of beauty."
https://oldbooksguy.substack.com/p/why-art-deco-is-making-a-comeback
34. "We know that war is inflationary. We understand that the US government must borrow money to sell bombs to Israel. We know that the Fed and the US commercial banking system will buy this debt by printing money and growing their balance sheets. Therefore, we know that Bitcoin will rise stupendously in fiat terms as the war intensifies.
What about Iran’s military expenditures? Will China/Russia help Iran’s war effort in some way? China is perfectly willing to buy Iranian hydrocarbons, and China and Russia sell Iran goods; however, none of this trading is done on credit. In a cynical sense, I believe China and Russia will act like the clean-up crew. They will publicly denounce the war but do nothing of note to attempt to prevent Iran's destruction.
Israel is not interested in nation-building. Instead, they would delight if, as a result of their attacks, the Iranian regime crumbled due to popular unrest. China, in particular, could then roll out its preferred method of diplomacy. Loan a newly formed weak Iranian government funds to rebuild their country using Chinese state-owned firms. That, in essence, is the Belt and Road program Chinese President Xi Jinping has pursued throughout his reign. Then Iran, with its massive deposits of minerals and hydrocarbons, would be fully within the Chinese orbit. China obtains another captive market in the Global South to dump its overproduced, high-quality, and low-priced manufactured goods. In return, Iran sells China cheap energy and industrial commodities.
If you want to call it that, the support from China and Russia will not expand the global fiat money supply. Therefore, it will have no discernible impact on the fiat price of Bitcoin.
An intensified Middle Eastern conflict will not destroy any critical physical infrastructure supporting crypto. Bitcoin and crypto will rise as energy prices spike higher. The hundreds of billions or trillions of newly printed dollars will re-energize the Bitcoin bull market."
https://cryptohayes.substack.com/p/persistent-weak-layer
35. "So what do you have to do at seed? You have to go further out on the risk curve, to something that’s weirder, different, or too early for a later-stage investor. Early, but not too early: hence the “12-36 months” phrasing. If you go too early and either the technology or market is not ready, the company may run out of money before you hit an inflection point. Finding an idea whose time has finally come with a multi-decade tailwind driving your potential is critical to building a generational venture-backed company.
A good litmus test I’ve been using recently is: “If I asked someone who works at a middle-of-the-road Series B/C fund about this company, would they react with skepticism or excitement?” If it’s the latter, I worry that the market is already defined and obvious and it’s too late for me.
If it’s the former, there might actually be something there."
https://pratyushbuddiga.substack.com/p/what-do-you-invest-in
36. Jeff does a good job on the state of the venture capital market right now: signs of consolidation. Really interesting, specifically with his view on the emerging manager sector.
The Great Societal Disconnection: The True Impact of the 2020 Pandemic
Social media is a curse because you see all the things you missed. FOMO all the time. While traveling in Europe I noticed a good friend had just gotten married and was having a huge wedding party. And the thing that got me was that I recognized many people there. People I considered friends and close former colleagues.
Prior to 2020 I definitely would have been invited and been there. But I realize now with the pandemic lockdowns, the disruptions from the barbaric Russian invasion of Ukraine, the vicious Hamas 2023 attack and atrocities against Israeli civilians and the consequent trauma that hit most of us, isolated us all and caused us to lose touch with each other. And these are, I stress, previously close friends and colleagues over the last few decades. The lockdowns and shutdown disrupted so many of our lives but the real impact is really being felt many years later on. I would add, being an introvert and having a global and traveling lifestyle only accelerates this effect.
How many of us ended up being divorced or separated from our spouses due to the unnatural amount of time stuck together during stressful times? How many of our kids were socially affected and traumatized from the lockdowns? How many of us feel completely disconnected from friends and family?
It’s in 2024 when I write this and it’s only now 4 years later that I am slowly beginning to reconnect in person with people I used to see all the time. People I respect and consider good friends. 3 frigging years where we all have changed dramatically. 3 years of being traumatized by government fear mongering and disillusioned by their grift and incompetence. We are all different people now, for better or worse.
No wonder everyone is feeling completely alone and disconnected. This is the true cost of the 2020 pandemic and I am not sure how long it will take to recover from this. Or if we ever will. But one way or the other, these next few years will be years of reconnecting back with everyone. We can absolutely still heal if we make the effort. So here is me making the effort and starting to reach out to everyone again after working on myself.
No Good Deed Goes Unpunished: The Limits of Generosity
I spend much time transiting through airports. One of them is Istanbul as I tend to go to places in Eastern Europe, Central Asia and the Middle East these days. During a recent trip when getting my Internet access code for the airport via a kiosk, an older lady asked me for some help. So of course I helped her.
But some other older ladies saw this and asked me to help them get them as well. Well fast forward, 20-30 minutes later, as I was helping the last one, she then asked me if I could help her husband. I kind of lost it and said I had a flight to catch (which I actually did) and walked away. I wish I handled this with a bit more grace.
I admit this is definitely a very petty post. I genuinely want to try to help people but every once in a while I get so triggered when people get demanding or entitled or just ask for way too much.
I think this is why so many rich or famous people start to turn inward and avoid people. People are selfish, in many cases stupid and clueless at times. The rich and famous become targets of social demands and feel like everyone wants something from them. Which is usually the case.
Now I don’t want to become a transactional east coast MBA guy who only does something if they get something in return. I never want to be that kind of guy.
But I also don’t want to be the people pleaser that says YES to everything and everyone. Giving without end. That would not be good for my own psyche or anyone’s actually. There are also many people in the world who view kindness and generosity as a weakness and are people I try to avoid dealing with.
My rule is the “rule of 1 and half”, that I learned in Silicon Valley. You get 1-2 meetings or 1-2 intros to help for free. Anything beyond that has to be commercial. But it also lets me try and give some help to people without expectation of any return. This rule obviously is for people you don’t know, not friends or family of course. There are almost no limits in mind to family and friends. It’s sacred.
It’s also a reminder for me to go back to the principles of stoicism. You can’t control other people but you can control your feelings toward them.
Just like Roman Emperor Marcus Aurelius said:
“Begin each day by telling yourself: Today I shall be meeting with interference, ingratitude, insolence, disloyalty, ill-will, and selfishness – all of them due to the offenders’ ignorance of what is good or evil.
But for my part I have long perceived the nature of good and its nobility, the nature of evil and its meanness, and also the nature of the culprit himself, who is my brother (not in the physical sense, but as a fellow creature similarly endowed with reason and a share of the divine); therefore none of those things can injure me, for nobody can implicate me in what is degrading.”
I find this helps condition me and prepare for the day. The “rule of 1 & half” is the second part that prevents you from getting taken advantage of while also allowing you to help people. This will help you manage your important and inevitable social obligations.
Holiday Hell: Why Holidays Are Hard for Most People
Have you noticed that many people tend to be particularly tense or in a bad mood during the major holidays. Especially during Thanksgiving or Christmas/New Years in America. As someone who has lived away from my home in Vancouver, Canada since 1996, I always religiously head home to see my folks during Christmas time. I think I missed a year because of a missed flight in 2001 and then in 2020 due to the BS covid lockdowns. But otherwise I would fly home, always with a mixture of joy and anxiety.
Why? We should be so fortunate to have our parents and siblings still around. Many people don’t have that luxury. And especially as an adult with a child, it’s great to just be able to chill out while all the meals, babysitting and laundry and chores are done for you. You regress back to your childhood. And my folks even give me Canadian dollars to spend while there, which is so weird. And they never take my refusal at all.
But at the same time, you hear bizarre commentary on politics and societal events. Or the criticism from elders, and the inevitable judgment and conflict that comes up at meal time. Annoying as you are now an adult used to living and doing whatever you want. Especially for someone so independent minded like me. It’s not like I have a curfew but then you end up having all the weird arguments with them.
The excellent financial writer Frederik Gieschen wrote something quite insightful a week or so back:
"What strange magic happens once we’re around family? We’re confronted with our past, we get a glimpse of our future, we dive into our deepest wells of conflicting emotions. Love, gratitude, and the desire to be seen, heard, and appreciated all co-exist with frustration, anger, sadness, shame. We start shifting between new and old identities, we slip back into roles and behaviors we thought we’d long abandoned. The ghosts of childhood wounds haunt the dinner table.
I think we trigger each by our very nature, not on purpose (ok, sometimes on purpose). Just like an insult only touches us if we spot a kernel of truth in it, family drama is intense because we see aspects of ourselves reflected in the other. Family ‘rubs your nose’ in the struggles of your life by showing you its iterations. If my mother struggles to let go of things, I see in this my own challenges, my own stacks of books, my own clutching and clasping.
Family is a mirror. Family throws a spotlight on what we’d rather avoid.
But here’s the kicker. If you do it right, family drama is a portal.
Fear, death, love, desire, envy, healthy and unhealthy romance, addiction, generational trauma — it’s often all there, in some shape or form. And for the holidays, it all comes together."
(Source: https://alchemy.substack.com/p/in-the-land-of-triggers-merry-christmas)
And for me it’s the long simmering anger I have toward my mother who always questioned and shamed me for not being the model kid when growing up. We’re all hurt little children no matter how old we are. And for most part, I’ve been able to use this rage to drive my career and life forward. But it’s always been there and you can only suppress it for so long. It has started to negatively impact my own family life in the last few years, despite entreaties by my therapist and other family members to finally address it over the last 2 years. Something I kept putting off the hard conversations.
So Frederik’s post came at the perfect time. He wrote:“Holidays offer an opportunity to learn about ourselves and our family and rediscover quirks and imperfections. There’s no guarantee that we leave with the gift of love, growth, and understanding.
If we face our triggers, if we muster the courage to share, if we listen with patience, if we draw on our compassion, well, there’s a chance we can turn the drama and pain into something precious. It’s a chance worth taking.”
He was right. It was not a fun or easy conversation but things have gotten slightly better since. And I’m less angry. That’s something. So my point is that hard conversations are better to have sooner, rather than later. Your parents or loved ones will not always be there.
Better to take the uncomfortable step to engage them and you will come out of this feeling much better. And the albeit petty sub-lesson for me: hold grudges for your enemies, not your family. :)
Marvin’s Best Weekly Reads November 3rd, 2024
"Most of the important things in the world have been accomplished by people who have kept on trying when there seemed to be no hope at all." —Dale Carnegie
"In January of 2011, Netflix was worth $11 billion. By November, the company’s market cap was just over $3 billion. The reason? As Netflix pivoted to streaming it tried to spin off its DVD business. The Qwikster backlash cost Netflix 1 million subscribers. As it turned out, Netflix was right, but early, as they ultimately closed their DVD business in 2023. In 2012, Best Buy was on the brink of bankruptcy and the big-box sector looked doomed. A year later, Best Buy’s market cap increased 3X as a new CEO led one of the biggest turnarounds in retail history. And then there’s the turnaround story everyone knows: Apple.
We’re wired to overestimate the impact of negative events, a phenomenon known as the negativity bias. It’s a cognitive distortion that makes us believe that failures have a greater impact than they actually do. At some point, every business experiences a crisis, i.e., an opportunity.
As a Professor of Brand Strategy, I can’t help but wax nostalgic and believe these firms are ripe for a comeback. They all boast global brands, talented workforces, and robust supply chains. However, the most attractive thing about these firms is just how badly they’ve been beaten down. In the first four weeks of 2024, Nvidia added the value of all four of these firms. And that’s the bull case as at some point every stock (unless it’s going to zero) is too expensive/cheap. These angels have fallen so far, redemption is overdue."
https://www.profgalloway.com/fallen-angels/
2. The fertility crisis in the world. Curse of modernity?
https://www.youtube.com/watch?v=mEQEMpxLnGA
3. "Remember Power is not money, status, or the ability to get others to do something.2 No, Power is the ability to control potential Energy. Monopolies are associated with Power and price gouging for this reason. HR has Power because they decide if you get fired or get a raise. And the Longshoremen have Power because they have a monopoly over cargo movement.
It’s a little more than a month to the US national election and a little over two months till Christmas and Daggett was willing to be the bad guy and extort all of America and its children for a pay raise. One man in New Jersey determines if your kids get Christmas Presents.
That’s Power. The ability to control, shape and redirect potential energy.
You may not like it, but that’s the sort of thing that gets you a 77% pay raise with no repercussions.
Yet what caused the ILA to cave prematurely is social media pressure. The framing of the issue where it wasn’t poor union workers against machines, but a mafia cartel extorting America and hindering relief. In this sense Power was reigned in by one of the forces they drew from Public Opinion.
Everyone pitches the David vs Goliath story when fighting, to win public opinion. But that only works when you’re the weakest faction in the story. Against big billion dollar corporations you can get sympathy; but when you’re withholding aid to disaster victims to advance your position, people sour."
https://mercurial.substack.com/p/port-authority
4. Deeply philosophical conversation with OG Silicon Valley philosopher and investor. Naval Ravikant. Living well and how to do your best work.
https://www.youtube.com/watch?v=wQGOYnWHnto
5. Still trying to figure out this Crypto thing......interesting debate.
https://www.youtube.com/watch?v=qsiIilxAzYs
6. "The amount of money going to venture has 10x’d, and the combination of more efficient pricing and a limited amount of great deals means that - for two decades - the hot got hotter. The rising tide has kept seed graduation rates steadily around 45%, but it’s also meant that consensus deals get bid up heavily at Series A as the dopamine and social capital of an up-round encourages junior investors to look for consensus.
The last two decades have awarded sourcing the best deals, and winning access to them, so big funds hired and trained for this. This dynamic has created a generation of investors who are excellent networkersand salespeople, but fairly limited pickers.
If a small fund is taking punchy bets, with unique insights, they are likely benefitted by a pullback in venture funding provided they can raise their fund. At seed, having smaller funds means that each unique insight you have has a greater impact on your fund MOIC. They have less access constraints and smaller teams which means more freedom for independent decisions.
In a less liquid environment, they’d face less competition, their signal would mean more to big funds, and since they are not usually investing behind consensus narratives, their money would be worth more to founders. However, finding these funds requires going far out the risk curve - usually something like SaaS in San Francisco is too efficiently priced."
https://jordsnel.substack.com/p/big-funds-small-funds-and-the-changing
7. This is a great conversation from 4 of the most accomplished folks in tech. Lots of big topics and strong views on Open AI, Defense-tech, Regulations and Social Media. Really educational.
https://www.youtube.com/watch?v=bcwelhe9Rys&t=886s
8. "So I wanted to look into the past, what were people thinking when they were thinking bigger, when they were willing to look at wackier paths.
When they were willing to consider things that have been eliminated often because technologies just weren't ready. There's a lot of technologies that have been discarded because they weren't practical at the time, and nobody ever revisited them and said, "Hey, I actually think the time has come." A good example is with the Rift. Doing real-time distortion correction is not a new idea. It existed in the 1980s and 1990s in the virtual reality community. It had been discarded even by NASA.
And most of the things that made the Rift successful were ideas like that, there's a few others where I was just going back to the future and realizing, "Wait a sec, these ideas, they were actually pretty good. They were just a little too early."
What Palmer is describing is a systematic review of past ideas that were ahead of their time. Often, those are in obscure government documents or research reports. But a lot of times they're also tucked into science fiction you've never heard of. Not just Star Wars or Blade Runner, but in something like Stranger in a Strange Land. It may not be mainstream fiction, but its considered one of the books that shaped America."
https://investing1012dot0.substack.com/p/back-to-the-future
9. "The poles of Earth used to be remote, romantic places for weather-hardy adventurers and nature-loving, climate change-worrying research scientists. Now, NATO ships and British military resources are converging on both poles. Why? Because the Arctic has oil, gas, minerals, fish protein, and many other assets. But, if data is now more valuable than oil, then the Arctic is now the land of “digital gold.” GPS, SATNAV, and satellite-based WIFI are only possible because most satellites connect to Earth through massive golf-ball-shaped geodesic domes that dot the landscape inside the Arctic Circle on a tiny Norwegian island called Svalbard.
Home deliveries, Uber rides, internet surfing on your smartphone, military logistics, and data transmission for the economy depend on the satellite ground stations that SvalSat (Svalbard Satellite Station) manages there. This is the home of the fastest internet cable on Earth. It’s not there for the polar bears. It’s the umbilical cord to the global digital economy.
Other things are present that are now luring nations and treasure seekers to the South Pole: uranium, manganese, iron ore, and coal, in addition to oil and protein. The value of all this black gold in Antarctica and digital gold in the Arctic is indisputable.
Britain, Australia and others who have Antarctic Claims could potentially generate cold hard cash on a spectacular scale due to their positions at Earth’s poles – if they can defend these positions. China, Russia, Iran, India, Turkey, and other nations also have their eye on these valuable locations. The Polar Research Institute of China (PRIC) describes Antarctica as a "global treasure house of resources."
https://drpippa.substack.com/p/why-the-icy-poles-are-hot-in-geopolitics
10. "The Arctic is important for another reason - the return of nuclear threats has also focused superpower attention there. The Arctic has become the front line for the modern Cuban Missile Crisis. In February 2023, Norway’s normally silent and invisible intelligence service publicly warned the world that they were concerned that nuclear weapons might be present on Russian submarines and ships in the High North. Murmansk is the headquarters of Russia’s Northern Fleet.
Sweden and Finland’s accession to NATO also brings the possibility that Western nuclear weapons may be deployed in these locations as well. Russia’s threat to deploy nuclear weapons and lowering the threshold for doing so has all the Arctic and high North nations on high alert. So, tracking the movement of nuclear capability in the Arctic has emerged as a very high priority for Russia and NATO alike.
Anyone who cares about geopolitics cannot afford to ignore what is happening at both poles these days."
https://drpippa.substack.com/p/why-the-icy-poles-are-hot-in-geopolitics-321
11. Lessons from one of the juggernauts of SMB-focussed SaaS: Klaviyo.
https://www.youtube.com/watch?v=jgot7lmwKA8
12. Some good perspective on how AI changes SaaS. Vertical Saas is here, horizontal SaaS is challenged.
https://www.youtube.com/watch?v=WXN6zYD3JqU
13. This is incredibly enlightening re: vertical LLM Agents. Successful case study of Casetext.
https://www.youtube.com/watch?v=eBVi_sLaYsc
14. "How did China accumulate so much power, so quickly, without inciting American suspicions for so long? Since 1990, China has not only transformed its economy but has pulled itself out of the diplomatic isolation of Tiananmen and created a fighting force of astonishing – though untested – strength. Yet it took twenty-five years for the West to really pay attention.
The answer, Skylar-Mastro suggests in her new book, is the "Upstart strategy". Drawing the analogy with a start-up technology company, she shows how China has risen by avoiding emulating the methods of its main competitor. Rather, China has exploited gaps in US power and developed novel strategies which capitalise on China’s strengths, including so-called "entrepreneurial" strategies such as the Belt and Road Initiative."
https://reactionpolitics.substack.com/p/upstart-why-it-took-the-west-so-long
15. One of the originals and arguably the most important entrepreneurs in America. Palmer Luckey. A hero. We need more folks in Defense-tech.
https://www.youtube.com/watch?v=az81MHug0Nw
16. So much good stuff here with Justin Waller. I always learn from him.
https://www.youtube.com/watch?v=AfF8q6c2jOo&t=87s
17. "It will be the same; the most successful and productive members of those societies will leave their home countries behind, take their productivity and assets abroad, and leave their nations in a worse state than before.
We live in a world where moving abroad is easy. Where changing one’s tax residency can be done in a matter of weeks. And where setting up an offshore company with a 0% tax rate can be a reality in mere days.
Yet Western leaders seem to set this fact on the sidelines.
Only a few days ago, I was talking to a client who we’re in the process of setting up his global tax plan. I asked him a simple question: if he did have to continue paying taxes, is there anywhere he’d like them to go?
His answer was simple, but telling.
“Anywhere but the West.”
https://anticitizen.com/p/our-rotting-nations
18. This makes me optimistic for America.
https://www.youtube.com/watch?v=6WlHF75TeDI
19. Thought provoking discussion. SaaS investing is over. So many nuggets of insight here worth listening to.
https://www.youtube.com/watch?v=cH9oREJnEaU
20. "Without question, the past decade-plus has been an unprecedented build up and expansion of VC as an asset class. This was seemingly happening more naturally and then the pandemic came and threw the world into crisis. But channeling JFK, with the danger, many VCs also saw an opportunity. It seemed like there were suddenly new opportunities in a changed world – social voice networks, virtual conference software, 15-minute delivery apps, etc – but what really happened is that the pandemic just created this sort of temporary bubble, which rather quickly deflated. But it also impacted basically every other company, with most others that operate online in meaningful way seeing growth pulled forward by a couple of years or more. This was true of Amazon on down.
But as the world normalized, it became clear that growth would return to the place where it was almost as if the pandemic hadn't happened – it was just a blip, a massive one. But this all was largely masked by both stimulus and zero interest rates that the government put in place to try to avoid economic collapse. Cash was basically worthless, might as well invest. And what better place to invest than in the future? Startups. High risk, yes. But high reward! Even more money plowed into VC which led to not only the creation of far too many new firms, but also the existing firms getting supersized. Foie gras economics.
A lot has to go right. And a lot has to stop going wrong. Which again, would seem to speak to the state of VC as a whole right now. There's opportunity and there's danger. A true crisis."
https://spyglass.org/vc-crisis/?ref=spyglass-newsletter
21. Solid critiques and learnings from decades in the venture capital industry. Must watch by investors and founders.
https://www.youtube.com/watch?v=i6CiNYZViCM
22. "Assessing battlefield success and failure is often quite simple. Winning and losing are quickly and clearly visible. However, assessing the strategic and political outcomes of battlefield events can often take a little longer. However, sufficient time has passed since the beginning of the August Kursk campaign for an initial assessment of the political and strategic effectiveness of the campaign to be made. It is a campaign that is sure to be assessed for its impact on the trajectory on the war for a long time to come.
Two months after Ukrainian forces cross their lines of departure and began their breach of the Russian defenses in Kursk, the Ukrainian campaign has settled into a series of smaller battles to push back Russian counter attacks and defend the ground they have seized since early August this year. The campaign is consuming valuable combat formations and resources."
https://mickryan.substack.com/p/assessing-the-kursk-campaign
23. "Progress is non-linear.
You don’t go to the gym for 10 years and build the same amount of muscle every single year. You build a lot at the start because you’re new. Then you build muscle in cycles of consistency and intensity. You bulk and cut. Life happens and you get thrown off for a year. The next year you regain motivation and are hyper-disciplined, gaining more in year 10 than you did in year 3.
The same holds true for productivity.
I do not believe that 12 hour workdays are something you sustain forever. That’s just stupid. The downsides are obvious. Burnout. Neglecting other domains of life. And simply not having something to work on.
12-hour workdays shouldn’t be forced.
No amount of work should be forced.
If it is, change your work (or change your mind.)
Like a lion hunts and rests, we’re going to replicate that in our work."
https://thedankoe.com/letters/how-to-focus-for-12-hours-a-day-on-your-purpose
24. Jason is the best, so many good insights for sales leaders and founders trying to figure out this sales thing.
https://www.youtube.com/watch?v=pEhXeY8oTB0
25. A really interesting and broad discussion on VC investing and future societal trends. Glad I watched it.
https://www.youtube.com/watch?v=wjnozgzMEX4
26. "As I tell Akshat and his team constantly, you have a job at Maelstrom because I believe you can compile a portfolio of the best-in-class Web3 projects that will outperform my core holdings of Bitcoin and Ether. If that weren’t the case, I would continue buying Bitcoin and Ether with my spare cash and not pay salaries and bonuses.
As you can see here, if you bought a token at or around the listing price, you have underperformed the hardest money ever known, Bitcoin, and the top two decentralised computer layer-1’s, Ether and Solana. Given these results, retail should never buy a newly listed token. If you want crypto exposure, just stick with Bitcoin, Ether, and Solana.
This tells us that projects must cut their valuations at launch by 40% to 50% to become attractive on a relative basis. Who loses if tokens list lower prices, VCs and CEXs.
While you might believe that VCs are in the game to generate positive returns, the most successful managers realise they are in the asset accumulation game. If you can charge a management fee, usually 2%, on a large notional, you make money regardless of whether your investments appreciated in value. If you invest, as VCs do, in illiquid assets like early-stage token projects, which are just future token promissory notes, then how do you get the value to rise? You convince the founders to continue doing private rounds at ever-increasing FDVs.
As the FDV in private rounds increases, VCs get to mark-to-market their illiquid portfolio up in value. This shows great unrealised returns, which allows the VC to raise the next fund based on stellar past performance. This enables the VC to charge the management fee at a higher fund value. Also, VCs do not get paid if they don’t deploy capital. That isn’t so easy when most VCs set up in Western jurisdictions are not allowed to buy liquid tokens.
They can only invest in equity of some sort of management company that writes a side letter giving their investors token warrants in the project they develop. This is why Sale of Future Token (SAFT) agreements exist. If you want VC money, and they have a fuck ton of dry powder, you must play this game.
What is toxic for many VCs is a liquidity event. When that happens, gravity takes hold, and token values plummet back to reality."
https://cryptohayes.substack.com/p/pvp
27. "For the companies that make them, games (and comics, and anime, etc.) are not a canvas for unfettered expression. They are a canvas for expressions that sell. And their makers would rather sell more product than less – even if it means changing things to appeal to different customers in different regions of different cultures. I know this from experience, because in my work as a localizer, I was often asked to suggest such changes — by the creators themselves.
So the Japanese pop-content industry is not a wonderland of freeform artistic expression being compromised by foreign invaders, of the conservative or liberal varieties. It’s a capitalist enterprise dedicated to making money by appealing to as many customers as possible.
None of this, will of course, do anything to dissuade those determined to fit Dragon Quest III HD-2D’s changes into their personal narratives.
There are conversations to be had about the agency of creators over the legacy of their products; about the murky criteria and draconian rulings of ratings boards; or the ethics of modifying the designs of an artist after their passing (Akira Toiriyama died earlier this year, alas.) Perhaps the conversation unfolding online may lead to that kind of nuanced discussion. One can dream."
https://blog.pureinventionbook.com/p/when-pop-culture-meets-culture-war
28. How did we mess up so badly to be reliant on China for critical minerals like Tungsten.
https://www.youtube.com/watch?v=gEHG1deCPC0
29. "You have to embrace new technology and put an effort to use it if you don’t want to be left behind.
If you want to not be technologically illiterate in the future, you have to FORCE yourself to learn new tech as it comes out.
Otherwise you WILL be the senior citizen of tomorrow with tech skills equivalent to the senior citizens of today.
When all the kids will be making the equivalent of online transfers, you will be doing the equivalent of writing a cheque."
https://lifemathmoney.com/how-not-to-be-technologically-illiterate/
30. "The team you build is the company you build"
https://www.youtube.com/watch?v=JBKfUFp6EWw
31. This is the acme of venture capital.
A must watch for anyone looking to master the craft of venture investing, including founders who should be the best investors (of time/energy) in their own company.
https://www.youtube.com/watch?v=B-elii6G7pE&t=653s
32. Wow, this is gripping reading on the Scribe Media episode. So many lessons for everyone in business. Big lesson is be very careful with who you do business with and sociopaths abound.
"Looking back at the true financials, and knowing the core team at Scribe and the situation, I still believe that had JeVon been courageous and taken the hard path, even starting as late as January 2023, he could have turned Scribe around and either sold it or made it profitable. It would have been hard, because he spent all of 2022 squandering the huge lead that Zach and I handed him–but it was still possible.
He didn’t take the courageous path. Once Jawad put his money in it appears that JeVon doubled down on his bullshit, and in May 2023 JeVon’s house of cards fell.
JeVon didn’t fool a few people. He fooled (almost) EVERYONE he came in contact with.
He fooled everyone at Scribe, including Zach and I.
He fooled multiple billionaires, including John Mackay, the billionaire founder of Whole Foods, who put him onto the Board of Directors of Conscious Capitalism (no, seriously).
He fooled Jawad Ahsan, John Kim, and other investors, who are each very smart and very successful and do not get fooled by people.
How could someone do that?
Well, first off, he’s actually good at his job. I wrote about his managerial ability here, and it’s still true. He is a skilled dude–at certain things–and you cannot fake that over a long period of time. He can deliver when he wants to.
And along with that, he’s an INCREDIBLE manipulator. Some of the things I have seen him do to people were, quite frankly, breathtaking."
https://www.tuckermax.com/the-scribe-media-collapse-and-recovery/
33. "Simply put, there is too much capital seeking too few opportunities, particularly at the seed stage. Multi-stage firms have eliminated pricing discipline at seed stage and the proliferation of seed firms has made the task of investing at this stage as competitive as it’s ever been, leading me to believe that indexed seed investing in today’s environment will produce poor returns.
What does this mean for today’s environment? It’s never been more important to break away from median performance. While there is risk in breaking away from the pack, the risk (at least performance wise) of staying part of the herd is simply far worse. Median returns for the recent vintages are simply terrible. One could argue that funds are still in their j-curve phases, but I suspect this doesn’t explain the divergence we’re seeing between GOOD performers and GREAT performers.
More than ever before, it’s clear to me that playing the same game as everyone else will not work, so fund managers should question whether they are really capable of being in the top 5% of whatever strategy they are employing. From a LP perspective, allocators should likely ask the same of their managers and consider whether allocating to indexed mega funds or indexing across too broad of a portfolio of managers is tenable in achieving their return targets."
https://newsletter.equal.vc/p/the-power-law-of-venture-fund-returns
34. The Dorito-fication of media and food. Not a good trend.
Spending Money Well: Living a Rich Life
I hit 50 years of age earlier this year. Amazed to be honest. I’ve struggled with understanding money and its rules for a long time. As I said I grew up in Canada with a Taiwanese immigrant family and academics to boot. We were really hard up when we first got there and this lack of money was seared into my soul and brain. Scars that were unintentional but everlasting.
This caused me to view money as scarce and led me to not managing it well when I got a bunch of it. I’d fall into the hedonic treadmill and just spend it all on stupid things without really understanding why I wanted them.
This continued into my adult life as I went through feast and famine cycles. Barely scraping by when I first ended up in Taiwan, making a pile of it and then wasting it. The same thing happened when I first moved to Silicon Valley, I barely survived the first two and half years there. I had to make choices like “Do I have lunch or dinner?” Cheap microwaveable foods, inexpensive but big Mexican burritos and Trader Joe’s were a godsend.
It was not until I joined Yahoo! that things really turned around, I was paid incredibly well for super interesting work. I also learned the incredible value of equity and stock options. I was so flush that I had no idea what to do with it. I was fortunately able to put some of it into real estate but overall I just spent most of it stupidly.
Some things I don't regret like paying for trips for my parents, trips for my family and lots of fun dinners with friends. Also plenty of books, far too many books. :)
But most of it was stupid, ridiculously lavish brunches, foreign magazines I’d never read, a huge wardrobe of custom dress shirts and suits I’d almost never wear. Complete waste. It was not until we had my daughter Amber did I realize how much $$ I wasted on stupid things. Nothing like a baby to focus you on the important things and wake you up, somewhat.
I ended up taking 2 years off after Yahoo! and I honestly still did not fully understand money even though I had more of it then I ever had at that time. This caused me to foolishly ramp up spending on my lifestyle, which is especially stupid when you are going through your own savings, albeit very extensive savings. A cash crunch in 2013 was my 2nd wake up call. Goes to show you how dense I am at times.
From this, as well as my previously written 2020 issues (3rd times the charm), it forced me to really get my financial act together in my 40s which is absolutely shameful.
So what have I learned? Well, really super basic things.
Don’t spend more than you earn. DUH.
Be Willing to Spend on health related things (gym, supplements & bio hacking stuff) & personal development stuff (books, classes, workshops and conferences)
Always keep one year’s worth of expenses worth of cash in hand. A must and priority for everyone.
Pay yourself first, after your emergency cash, make sure you are putting aside 10-20% and investing it in index funds. One side of the barbell of personal finance.
Equity matters, always try to get and build equity in businesses or real estate (not your home but cash flowing real estate). This is the other side of the barbell.
Track and write down all your spending. It helps you understand where your money is going. I might add that I did not do this from 2002-2013, my most out of control time.
Use money to save time, especially services like Clear at the airport. Or house cleaning services.
Business class flights are only worth it if you have brutally long flights over 15 hours. Paying for airport lounges makes no sense.
Know what gives you pleasure: for me it’s books, good food, gifts or nice things for my loved ones and travel
Focus on the big expenses, don’t waste time on saving money by cutting small pleasures like coffee or such. Save on the big stuff like cars or hotel rooms unless you really care about these things.
Manage your costs but you should really focus on making more much more money
I spent much of my life chasing money. I’m probably still chasing it to some extent but I do feel like I’ve gotten a better handle on it by now. It’s probably something we all will struggle with but it’s important.
As Naval once said: "Money is not going to solve all of your problems, but it's going to solve all of your money problems."Money is a tool and scorecard for a better life. Better to understand and master it as soon as possible so you can use it to improve your family's life.
Excellence is Hard: Deion Sanders & The Need for Straight Talk
I was chilling one evening and going through my Linkedin and saw something pop up on the feed. It was a clip from 60 minutes about how Deion Sanders came in to turn around a college football team. He encouraged the team to transfer out. During the interview with the reporter he was direct and when he made the comment, “you got here and you didn’t pull punches, those of you we don’t run off, we will make you quit, you made it very clear”
Deion says:
“If you were into that, and were able to let words run you off. We ain’t for you cuz we are old school staff. We coach hard, we coach disciplined. So if you are allowing verbiage to run you off because you don’t feel secure with your ability, you ain’t for us.”
The reporter responds: “I’m sure this straight talk was appreciated by some but do you think this scorched earth policy is good for college football or for the kids?
Deion goes to say: “I think truth is good for kids. We’re so busy lying that we don’t recognize the truth no more in society. We want everybody to feel good. That’s not the way life is. Now it’s my job to make sure we have what we need to win. That makes a lot of people feel good. Winning does.”
The reporter: “I gotta push back, you’re the father of college athletes? If they called you and told you we got a new coach and they are telling me to get in the transfer portal.”
Deion responds: “Then you must not be doing well. Because you should be an asset and not a liability.”
Right on. I’ve been known for being a tiger dad and brutally honest to my founders. I’ve long stated that I’ve hated the stupid “everybody gets a trophy for playing” garbage. It’s not reality and it’s sociologically corrosive. This is why America is losing. That’s why the West at large is losing because of this attitude.
It reminds of what Larry Summers said at the 2023 All in Podcast Summit: “We have gone from thinking self esteem comes from achievement to thinking achievement comes from self-esteem.” The sooner we acknowledge this, the sooner we can fix it. Thank goodness America still has pockets in excellence in plenty of new immigrants and immigrant kids who believe otherwise. This may be what saves us and gets us back to winning.
The Real Life World’s Most Interesting Man: Gianluca Vacchi
I stumbled upon this character Gianluca Vacchi on social media a few years ago. An Italian industrialist playboy who owns the Bologna-based family conglomerate IMA, he is also a professional DJ and social media impresario. He has over 22.4 million followers on Instagram and 21+ million followers on Tiktok. Estimated to be worth between $200-500M usd, he is one of the few super rich guys who seem to be having legit fun in life.
Found out he released a documentary called “Gianluca Vacchi: Mucho Mas” on Amazon Prime and it’s really fun to watch. We follow him on his adventures as he embarks on parenthood while living the glamorous and hedonistic lifestyle.
There is something to be learned from him, even though it helps to have the wealth and resources like he does. One of the things he said was: “I’ve always tried to make my life interesting to myself, first of all. Then, obviously, like all the things you do out of passion, they may become interesting to others as well.”
While he inherited the foundations of his family business, he went into debt, buying out his relatives and building the business substantially, taking various businesses public. He 100Xed his inheritance and became a known financier and industrialist in Italy. IMA is considered one of top 5 best led family run businesses in the world.
It was not all a smooth ride to the top. He suffered financial challenges along the way with the Parmalat scandal but he was tenacious and fought through it even though the Italian government confiscated his fortune at the time. Vacchi said: “I remember that….it was a nightmare. I struggled. I did, for sure. Life has its own weird balance. It gives back what it takes from you, and that is unavoidable. I woke up one morning and said, ‘I need to find the strength to fight this.’ And so I did.” He showed grit and 18 years later he was vindicated and fully cleared by court.
Vacchi says: “Common people think that with money everything comes naturally. That is just a myth we need to go past, though. My current assets are 100 bigger than what my father had. I was a businessman and I became one of the most well known people in the world, which I also did not inherit from anyone.
Probably, at 60 I won’t have the life I have now. Because I am open to reinventing myself again. Do you know why I won? Because I showed what kind of person I really am. I have legitimized the freedom to do whatever you want, whatever you wish to do. The freedom to do whatever the F–k you want.”
He really does has fun. He also is unabashed about enjoying what he has: his private plane jet setting adventures to exotic places, the luxury homes and luxury handbags. Like most Italian men, he is so damn well dressed all the time with his tailored shirts. He is authentic to himself and doesn’t seem to care what others think. And is not afraid of looking silly. Boy, does he like to dance. His Insta’s have always brought a smile to my face. He dances, he skis, he sails and in the most beautiful places too. He even became a professional DJ at age 50.
He is a family man. While he became a father at relatively older 54 years old, he jumped into parenthood with all the energy he had. He loves his daughter and it comes across. Like me, he grew up in a strict household which shaped him.
He is disciplined and spends a lot of time and energy on health and wellness. Every morning, 2 hours in a hyperbaric chamber which helps increase growth hormones & stem cells as well as fighting bacteria. He follows this by time in a cryogenic chamber, below freezing temperature that helps with mood as well as muscle recovery, similar to an ice bath which he seems to do too. Then a one hour workout with heavy weights in the gym. He does this everyday, religiously and it shows in his body and vigor.
“Just as I built what I have by working my ass off, I’ve done the same to build my look, my body, by working my ass off. My life, more than a sin of vanity, is a constant search for the best psychophysical condition, and I live everyday thinking of that as well. After all, as I always say, your body is the only house you are forced to live in. All the other places you can choose.”
He lives a self sovereign life and is completely independent because he is financially independent. He can do whatever he wants, whenever he wants and with whoever he wants to. He splits his year, 6 months in Bologna, Italy, where he grew up and 6 months in Miami. Bear in mind this documentary was in 2021 and most of the world was still shut down from the cursed covid lockdowns, so Miami was one of the few still open and functioning cities in the world.
No real point to all this. But it’s nice to see people like Gianluca out there. Successful, strong & fit and having the time of his life. Interesting as F–k. Maybe the lesson is to just be a bit more like Gianluca in life. Have a zest for life.
In his words: “Enjoy ....because, at the end of the day, enjoy means play, have fun, sweat, dance, celebrate.”
Marvin’s Best Weekly Reads October 27th, 2024
“No great achiever – even those who made it seem easy – ever succeeded without hard work.” – Jonathan Sack
"When we ignore, repress and disown the parts that cause resistance, we allow them unconsciously run the show and rob us of what we truly want. We let them keep us in our status quo, or keep moving backward. We get stuck. We get scared. We stay small. We lose confidence in ourselves. We shame ourselves. We numb ourselves. We remain polarized. We start and quit—a lot!
So I have some bad news. No matter how much a future vision of your life is motivating you, no matter how dissatisfied you are now, you can't force out resistance. Doing so would mean either unconsciously ignoring it, or consciously rejecting parts of yourself that are actually trying to help you. Instead, you have to open the door, invite those parts in, ask them questions, appreciate how they’re trying to help you, and eventually choose how you want to move forward.
So what is resistance, really? It’s the unconscious and conscious parts of ourselves that hold us back. So, to begin the change process we need to understand the types of resistance and how to work with them.
Identifying and getting to know your resistance, especially the parts that get triggered and stop you in your tracks, is how you’ll begin to go beyond what you thought was possible and appreciate and relate to yourself more fully. With practice and presence, you’ll see that different types of resistance emerge depending on the situation and context—what you’re doing, who you’re with, what’s at stake, etc. In other words, resistance is fluid, dynamic, and slippery. Yes, it’s difficult to nail down, but I have good news—it’s not impossible."
https://www.wheretheroadbends.co/p/why-is-it-so-hard-to-change
2. A deeply philosophical discussion. How to have a "cathedral building mindset". This was really interesting.
https://www.youtube.com/watch?v=rf1nXskea9Q
3. "But this is just part of a larger pattern of Beijing’s efforts to leverage the Chinese diaspora for foreign influence. In the U.S. and elsewhere, Chinese Communist Party-linked individuals have funneled money, served as politicalbrokers, and harassed Beijing’s critics. Pro-government groups lined the streetsof San Francisco last year to welcome Chinese leader Xi Jinping, and anti-CCP activists were assaulted.
The best offense is proactive defense. We should not let Beijing claim to speak for all ethnic Chinese nor all Asians. Elected leaders should work with legitimate Asian American grassroots organizations to reach out to local communities and gain a better understanding of issues important to them, such as public safety or affirmative action. Sustained engagement beyond election periods will undermine Beijing’s narratives of diaspora marginalization and democratic dysfunction. The federal and state governments should support robust Chinese American civil society networks that reflect the community’s diversity.
The Chinese community in the U.S. is only growing. Tackling these issues now is an investment in future resilience. Just as how strengthening U.S. democracy is fundamental to countering Beijing’s narrative of a failing West, embracing diaspora communities as assets will strengthen America while limiting Beijing’s ability to weaken the U.S. internally."
https://time.com/7025773/china-foreign-meddling-us/
4. "In some ways, this should come as no surprise. The incredible human talent in the venture capital industry has always been global. Vinod Khosla grew up in India. Peter Thiel was born in Germany and raised, in part, in southern Africa. Sequoia’s Michael Moritz is Welsh. Many of the top talents we associate with success in venture have found their way from somewhere in the world to Silicon Valley.
In fact, all five of the top investors on this year’s Midas List were born outside of the United States. Sequoia’s Alfred Lin (#1 on the list) emigrated to the US from Taiwan when he was six years old. Micky Malka (#2) grew up in Venezuela and first moved to Silicon Valley as an adult. China’s Neil Shen (mentioned above) ranks 3rd. The VCs at #4 (Mayfield’s Navin Chaddha) and #5 (Redpoint’s Satish Dharmaraj) were both raised in India, but have made their VC careers investing here in California."
https://99tech.alexlazarow.com/p/midas-goes-global
5. A deep dive into the creative process of the original OG creator Ben Thompson.
https://www.youtube.com/watch?v=igh0JeaUHzo
6. "China extracts and refines many minerals that are needed for semiconductors in our computers and the batteries in our electric cars. Some companies are concerned about relying too much on one country and are looking for other options. But as NPR's Emily Feng reports, it's not easy."
7. "Fifty years later, a new Gang of Four has emerged: China, Iran, North Korea and Russia. This grouping is not a formal alliance committed to defending one another. But it is an alignment driven by shared antipathy toward the existing US-led world order and features mutual exchanges of military, economic and political support.
This Gang of Four seeks to prevent the spread of Western liberalism domestically, which they see (correctly) as a threat to their hold on power and to the authoritarian political systems they head. They also oppose US leadership abroad, including the norms the United States and its partners embrace, above all the prohibition on acquiring territory by the threat or use of force."
https://www.aspistrategist.org.au/the-new-gang-of-four/
8. Robotics is here. What an amazing time. Gecko Robotics: hardware + core software infrastructure.
https://www.youtube.com/watch?v=sFEtPGsQRyc
9. Arrogance kills. US Military will be learning things the hard way sadly.
"Tingle believes the military branches are at least partially writing off the conflict based on assumptions that the U.S. would not struggle with the same types of problems as Ukraine, such as establishing air dominance over Russia.
Those assumptions may be true, Tingle said, but that doesn’t mean the war has nothing to teach.
“There are lessons about modern warfare in general that we are not getting because of that attitude.”
https://www.defenseone.com/policy/2024/09/us-military-learning-enough-ukraine/399893/
10. I always enjoy listening to Trae share his wisdom as a VC at Founders Fund & cofounding Anduril & working at Palantir.
https://www.youtube.com/watch?v=Gbp6QOPeBYs
11. "Conversations about the business will become the norm. Newbies will realize that they have to learn the numbers — all of them — if they want to contribute to discussions. And nobody will think that they can stall or evade by questioning the data.
The part that people miss is how long that takes. I think it’s measured in quarters, not weeks or months. It takes that long to retrain everyone how to think. And what the numbers mean. And to decide which numbers you really want.
Every leadership team should strive to have conversations about the business using the numbers. The only way I know how to do that is to pay the piper first."
https://kellblog.com/2024/09/30/talking-about-the-numbers-vs-talking-about-the-business/
12. A deep dive into Sequoia Capital's internal processes and culture. Intense is probably the best description.
https://www.youtube.com/watch?v=VaEX_bjwj8w
13. Incredible. Great news for Fillmore Street in SF. One of my favorite neighborhoods.
"We’re going to restore and revitalize these properties. We aim to bring in a rich diversity of local businesses, with a focus on food and beverage, that will delight the community and discourage the kinds of impersonal chain retailers that would make Fillmore look like anywhere else.
We’re going to achieve this by offering below-market leases to committed entrepreneurs who will reinvigorate Fillmore Street. And we’re going to help our tenants navigate the friction, complexity, and anxiety that have sadly become an inevitable part of running a business in San Francisco. We are thrilled to welcome these new tenants, but contrary to what has been reported, we haven’t evicted anyone or forced anyone out."
https://sfstandard.com/opinion/2024/09/30/neil-mehta-100-million-fillmore-project/
14. This is worth watching a few times. IA Ventures is legendary and Roger has some of the best macro views on venture.
https://www.youtube.com/watch?v=tPSUW3Ht4vo&t=1s
15. Fascinating conversation. Calling out the bureaucracy & stupidity in America right now. That and why capitalism is the best.
https://www.youtube.com/watch?v=c1GL6Wnyi84
16. What a time to be alive. Exciting developments in Longevity Biotech from Altos Labs.
https://www.youtube.com/watch?v=uUjF3RG28SQ
17. Incredible discussion on the art and science of scaling startups and also investing in startups. So much to absorb here. I will listen to this a few times.
https://www.youtube.com/watch?v=DVZXnaH7Agg
18. "People who don’t face real physical dangers in life from time to time develop a warped mentality where they start over-stressing little things that don’t matter.
The mind when not used to real dangers will invent dangers where they don’t exist.
This is the real reason why you see a lot of “anxious” and fearful people in today’s society. People who are afraid and stressed out by little things.
I mean things like overthinking and worrying about what someone else thinks of you, or stressing about being late for a flight, or handling not getting to eat a fruit platter on a plane as if it was a real crisis.
Go out in the world and face some real dangers.
It makes you stop caring about meaningless things."
https://lifemathmoney.com/how-to-not-sweat-the-small-things-the-importance-of-facing-real-dangers/
19. Solid discussion on AI and the future by the CEO of Anthropic.
https://www.youtube.com/watch?v=7xij6SoCClI&t=1013s
20. This was so timely for me.
Steve articulates a lot of what many of us investors have felt at some moment in our last few years of the ZIRP era of investing.
Sitting in a pitch meeting and thinking you "just don't care." You may be burned out. How do you become present and thoughtful about your life.
https://www.youtube.com/watch?v=33NnZcSRoDs
21. "Earlier in the year, we saw failing companies find reasonable landing places, with outcomes that were fair (but not great) for founders, employees and investors alike. More recently, we’re seeing an increasing number of drawn-out acquisition processes as potential acquirers cut, and cut, and cut their offers, until founders have no choice but to accept a pittance for their years of hard work.
Thousands of companies around the world are looking for landing spots right now. And hundreds of VC firms are simultaneously insisting to their LPs that those companies are still deserving of their inflated 2021 valuations."
https://chrisneumann.com/archives/things-i-think-i-think-q3-2024
22. Wallenberg family dynasty, running their businesses for over 150 years. Amazing.
https://www.youtube.com/watch?v=rW0mfMNu8gE
23. "Walt Whitman wrote, “America…counts…for her justification and success…almost entirely on the future. . . For our New World I consider far less important for what it has done, or what it is, than for results to come.”
San Francisco, too, counts for its justification entirely on the future. It is a synecdoche for America. The future is what is important. This is its sin and its charm, its peril and its undeniable promise.
In San Francisco, the future, too, is hot and cold. When the next round closes, the sun is on your face. When the acquihire falls through, the shade is cold as ice. On Monday, AGI and universal prosperity are at hand. On Tuesday, apocalyptic doom looms, or worse, stagnation—progress’s dreaded asymptote. Feast or famine. Fever is the nature of the future."
https://every.to/chain-of-thought/a-day-at-the-center-of-the-ai-boom-2023
24. Some interesting takes on economics around the world.
https://www.youtube.com/watch?v=5-OLPsdJGmY
25. Eye opening conversation with Erik Prince of Blackwater Fame or infamy.
https://www.youtube.com/watch?v=BScLEx5tibw
26. "Like software monetization, software valuations are fat-tailed:
Most companies have unremarkable valuation multiples
A few, however, skew well to the right, creating a long tail of multiples
This tail skews the distribution of multiples and increases the variance between public software companies. I'd imagine the situation is even more extreme among private software companies."
https://whoisnnamdi.substack.com/p/dark-matter
27. A really solid discussion to understand where the landscape of software and AI technology is going and how the tech can be used by companies.
https://www.youtube.com/watch?v=vRhPc0zt2IE
28. A must watch for anyone interested in building a successful creator entrepreneur life. Strong recommend.
https://www.youtube.com/watch?v=pZ7oo4bYayE
29. Tactical shoot training is probably worth learning.
https://www.youtube.com/watch?v=JuSjsaflS24
30. A Masterclass in the science of selling vertical Saas. Process and leverage.
https://www.youtube.com/watch?v=6I_GzoqlVVU
31. "I know it's been a tough year to be long cyclical commodity names - at least the ones I'm long - but with rate cuts now materializing and China rushing to make conditions easier for investors, I think there's a good chance some of these unloved names start to get more love in the near future.
We've also discussed continued geopolitical events (asymmetry). I don't think the world is going back to normal any time soon. I don't think the US debt problems are going back to normal any time soon. I think we're headed towards a currency crisis / government default and possibly WW3. I think it's a good time to invest in hard assets both inside and out of financial markets. I think it's also a good time to build personal resiliency and improve the options your family has in the case of major disruptions to your lifestyle - be it from weather, conflict, or financial chaos.
There was a man in Asheville who was reportedly laughed at for building a house on stilts. All his neighbors were washed away."
https://calvinfroedge.com/review-of-names-discussed-this-year/
32. Actually a very interesting conversation. If you want to understand crypto investors and financial nihilism, this is a good start.
https://www.youtube.com/watch?v=MhtO4tdosa8
33. This is a fun conversation, how to hustle (in a great way). So many great nuggets here. Get on a plane and win. Get off email.
https://www.youtube.com/watch?v=7lomqcrFNv8
34. This is a must watch. Wake up Americans and Europeans. "Palmer's I told you so Tour 2." Thank Goodness for Palmer and Anduril Industries.
https://www.youtube.com/watch?v=bq-kukOA4gQ&t=11s
35. Another great episode: good to watch if you know what's up in Silicon Valley.
Find Your Delta: Investing In the Future
I think most of us tend to be dissatisfied with our lives at some point in time. Others more often than not. It’s so easy to do so these days as we compare ourselves against others on TV or social media. Or worse against what we had expected of ourselves when we were younger.
I swore I was going to be a billionaire or worth at least a hundred million by the time I hit 50 when I was a stupid young kid back in Canada. Well I’m very far off from that number, I admit. And there are days when I think about that.
Yet overall, I am grateful for my life in general. And hopefully I am wiser and more experienced than that dumb kid 30 years ago. I’ve had grand adventures traveling the world, helped build many businesses and had fun along the way.
I was never one of those people who lived for the weekend. I think people who live for the weekend are losers. You have done something badly wrong in your life by picking the wrong work. I used weekends to rest, read and for family time so I could prepare to go back to crank at work or business Monday. I looked forward to Mondays in most of my career except for that awful working year of 2019. Otherwise, it’s been an amazing and fun time.
I’ve also learned a few things I hope to pass on to folks starting the journey. Things I should have valued more or been more thoughtful about along the way.
Health is wealth: health also drives performance and helps you manage the inevitable ups and downs in life
Always keep family in mind and never skimp time with them when it matters
Value good and smart people: it is everything in business and life
No Risk, No Gain: Don’t be so fear driven and take more risks in life
Choose chasing interest and curiosity over what is popular or sexy
Learn how money and business works as early in life as possible: Money is important and does increase happiness
Anything is possible as long as you play the long game
Keeping these in mind and paraphrasing the immortal Han in Fast & Furious Tokyo Drift: Life is simple. Know what you want, figure out the Delta & gap from where you are now. Know the price of it and pay it. You will get there if you put your mind to it and do the hard work.