Marvin’s Best Weekly Reads August 11th, 2024
"Sometimes the best solution is to rest, relax and recharge. It's hard to be your best on empty." - Sam Glenn
Especially good discussion on the edge of the Internet. Love the debate on USA versus UK/EU.
https://www.youtube.com/watch?v=8rhdumQWzf8
2. "2024 is an important election year in Pax Americana. Pax Americana is at a crossroads. Should it accept a multi-polar world order, dig in its heels, and fight the challengers economically and militarily? The next emperor will have a significant say in how America navigates this changing world order.
Given that a few thousand votes will decide the election in a handful of states, Trump and the Republican party are speaking pleasantries about crypto. I, just like Malcolm in 1964, doubt the sincerity of Trump. He cares about getting elected and will say whatever it takes to get your vote. If Biden and the Democrats were pro-crypto, Trump would be anti-crypto. It’s just good politics.
If this simple bill is enacted into law, it would have profound ramifications for how crypto is treated by various regulatory agencies. Questions on whether this or that alphabet letter agency has jurisdiction over crypto-related behavior would abound. The only way to clarify the boundaries would be through legal precedent achieved through adversarial public court cases. This is how it should be. The judges appointed to adjudicate the laws passed down by elected representatives will determine the scope of the speech freedoms afforded to crypto.
But while that is happening, Pax Americana would become the most favorable place to do “crypto.” Doing crypto could mean opening your own exchange, creating a new DeFi protocol, building decentralized infrastructure, or pooling funds to invest or trade. It means permissionless innovation.
The type of innovation that Pax Americana die-hards wax nostalgic about. Did John D. Rockefeller, Andrew Carnegie, or Henry Ford beg and plead with government officials to revolutionize the oil, steel, or automobile industry? Fuck no, they just got shit done and built entire industries and industrial processes and put agrarian America on the path to becoming an empire."
https://cryptohayes.substack.com/p/hot-chick
3. This is a must listen to podcast on the state of union in VC and tech.
https://www.youtube.com/watch?v=-8rMn2pk5qU
4. China on the march in Asia and the USA is behind the curve here again. What a mess.
https://www.youtube.com/watch?v=qroDHmryGoI
5. One of the best shows to know what's up in Silicon Valley.
https://www.youtube.com/watch?v=ISFsNybl-Ig
6. A coldly sober and dark view of China and Taiwan. Only good news is it seems War is not inevitable. But a more intense hybrid war.
https://www.youtube.com/watch?v=iOei7kZjuZU
7. "By treaty, nobody owns space, and the moon belongs to everyone. That’s a problem. Geopolitical competition, a growing private space economy, and the relative absence of rules make space the new Wild West/North/East/South.
Low Earth orbit, where Starlink is scaling its network, is congested and getting worse. Even a small object can do a lot of damage if it hits a satellite or space station. We’ve already had some near misses. A SpaceX satellite almost hit a manned Chinese space station. A Russian anti-satellite test sent debris hurtling toward the International Space Station, forcing astronauts on board to take shelter. This is the plot line of the movie Gravity, which starred Sandra Bullock and president-slayer George Clooney.
What happens when someone takes out a satellite on purpose or an adversary puts nukes in orbit? When I was a kid, this happened in the James Bond movie You Only Live Twice. The axiom of all sci-fi eventually becoming reality holds: We now have a Space Force, though it’s not a budgetary priority for the Defense Department.
The fight over space isn’t limited to geopolitics. It’s also about commerce. As business booms and resources are unlocked in new regions, private companies will enter the fight. It’s happened before. We call it colonialism. At its height, the British East India Company had its own 250,000-man army and the right to wage war. The corporation ruled India. Its competitor, the Dutch East India Company, had a charter that empowered it to raise armies, build forts, and make treaties.
Question: If someone threatens a Starlink satellite, does Elon Musk call the U.S. government to fight his battles, or does he arm his satellites with tiny projectiles that can neutralize the threat? Follow-up: If two companies claim the same spot on the moon, do they call lawyers, or does someone go all Nolan Ryan and throw a moon rock at a fragile piece of equipment and claim the resources for their shareholders? My prediction: The next battlefield for proxy wars between the West and its adversaries will be in space. The armies fighting this war will be well-paid mercenaries disguised as corporations."
https://www.profgalloway.com/the-financial-frontier/
8. "Contemplating a major business model change that involves more staffing, more technology, and more unknowns can be unnerving. For us, while it added more complexity to become a full email service provider, it was one of the best decisions we ever made. We made it through the learning curve and ultimately delivered a much better solution to customers."
https://davidcummings.org/2024/07/13/contemplating-a-major-business-change/
9. "The now-classic seat based model disrupted the perpetual license model. Perhaps usage or performance pricing will be the catalyst for a new era of upstarts displacing incumbents.
Maybe we’ll see a No-SaaS rebel replicate Marc Benioff’s playbook."
https://tomtunguz.com/ai-agent-pricing/
10. "Everything we build, from our Substack publications to our technologies, is either awakening the religious sense in us or dulling it. There is no between. And yet most of the Content Class just shrugs their shoulders and seems embarrassed to even have the kind of conversations we need to have to even know where we stand. When the Stanford “Huberman Labs” founder and podcaster Andrew Huberman admitted on a podcast that he believed in God, he looked like he wanted to crawl under the podcast table. He hedged his statement in apologetic tones even before the words left his mouth.
We can do better than that. This kind of stifling environment serves nobody. We should all be able to lay our metaphysical commitments on the table—if we even know what they are—and talk openly about them. Otherwise, we’re building things for a human nature that is an Unknowable X, with people whose own selves are Unknowable X’s, which turns the people who consume these things into Unknowable X’s to themselves, too."
The time of building for acquisition and the time of building apps for engagement are over. The time is coming to build things that elevate the human experience, not trivialize it so much that it becomes en vogue to say that you don’t know whether they are living in a simulation or not anytime something unexpected or weird happens.
The materialist view is going to die. It is already in the process of dying. The clicks and the engagement are like a chicken with its head cut off running around for a few minutes before it finally collapses."
https://read.lukeburgis.com/p/its-time-to-build-unsiloed-edition
11. "I want to stress, long term, I think it's going to hard to go wrong with a diversified portfolio invested in hard assets. Preferably, hard assets that aren't in war zones (which could be a lot of Europe and the Middle East soon). The current out performance in large cap growth I think is dumb, and I believe that with time, we'll probably marvel at this current period in market history just like we did the SPAC boom a few years ago or at strippers owning 5 houses during the GFC, or people paying 10x revenue for Cisco back in the internet bubble.
As for my portfolio and asset allocations personally, I know my banking freakout worried a lot of people, and I was sincere in my discussions of the evils of KYC. I have continued to move more of my assets out of traditional finance and to diversify across all three jurisdictions I'm in (Panama, Singapore, and the US). I have moderated compared to where I was a few months ago in terms of my sense of urgency. I allowed some legacy payment pathways for my existing customers. I feel better now that I have more like one foot in, one foot out, instead of being totally dependent on the system. Beyond the tax penalties for liquidating the stocks in my retirement account, I also felt I owed it to you guys as subscribers to stay in the game, as there is probably a special place in hell for people who don't eat their own cooking.
Anyway, onwards and upwards. I still think that the next decade probably looks more like the 1970s than any other decade in the past century (though nuclear war would certainly impact that prediction). Collectibles and commodities did well in the 1970s (so did real estate and land). Stocks did poorly - except of course the commodity heavy stocks.
I would push you to really look at asset classes outside of equities, and to look at equities that would do well in a better commodities pricing environment. I think war is inflationary, deficit spending is inflationary, and political turmoil (like the continued Suez Canal crisis) is inflationary. I think we're getting all three this decade."
https://calvinfroedge.com/sibanye-stillwater-are-they-making-money-yet/
12. "The distance between Silicon Valley and the Pentagon just keeps getting smaller. As venture capitalists continue to pour money into defense tech startups, they’re turning to a new hiring pool: veterans and ex-Department of Defense officials."
13. This is a great guide of how to move your sales motion to enterprise sales.
https://www.youtube.com/watch?v=20LHHlWsIxE
14. "The simple truth is this:
Laws and regulations like this are always created via some narrative that they’re good for society. However, they always come with the added consequence of making most people poorer.
This isn’t an accident. It’s by design.
Each of the measures described above results in the poor becoming poorer, while benefitting the wealthy. Or at the very least, not affecting them in the same way."
https://anticitizen.com/p/keep-poor
15. "A cover, some pages, and your photograph: despite modest appearances, a good passport is one of life’s greatest assets.
“Good” being the key word here.
It’s obvious that if you were born with a passport from Japan, Germany, or the UK, you’ll have access to much more travel, opportunity, and freedom than someone who holds a Nigerian, Iranian, or Uzbek travel document.
Even if you were born with a valuable passport, however, part of the Anticitizen philosophy is having at least one more as a backup plan, or to open up more opportunities. And like the Mongolian paiza of the old empire, another passport is worth more than its weight in gold.
But just how easy is it to get another?
Probably the easiest pathway is by descent, via claiming citizenship through an ancestor. And here’s the kicker: millions of people are eligible to get another passport this way and don’t even know it."
https://anticitizen.com/p/valuable-item-earth
16. "In situations where something is, or may become, a status symbol, there may be limited chances to apply AI. AI works best when the goal is automation, or lower cost predictions, or something like that. Status symbols don’t usually benefit from either of those use cases.
It’s common to extrapolate new technology to everything. But it rarely works out that a new tech upends every area of the economy."
https://investinginai.substack.com/p/the-things-that-ai-wont-change
17. "This year marks the 30-year anniversary of the grill, officially known as the George Foreman Lean Mean Fat Reducing Grilling Machine. After a slow start, it became an indelible part of ‘90s consumer culture and the world’s most popular product for cooking hamburgers, hot dogs, salmon, and just about everything else (Oprah Winfrey preferred it for bacon).
But the Foreman grill isn’t just a fun relic from America’s peak infomercial era. It was also a cash cow. Dreimann says Salton sold as many as 14mgrills in a single year. In 2000, QVC claimed it sold more Foreman grills than any other small kitchen appliance.
And, surprisingly, 30 years later, the Foreman Grill remains a champion. Monthly sales figures on Amazon indicate that, at the peak of this summer’s grilling season, the standard Foreman Grill outsold offerings from rivals Ninja and Cuisinart, not to mention the most popular outdoor grills from Weber and others."
18. "Overall, I’d characterize the ecosystem as iterating. OpenAI and GitHub launched their features at roughly $20-30 per month. This initial pricing has anchored the market at least for now in that range.
Microsoft & ServiceNow have stated AI features increased productivity by approximately 50 percent. If buyers act rationally & reduce headcount by 50%1 which we know is probably not true, then to maintain the same revenue per customer, price would need to double. We can observe that in three of the companies’ pricing strategy above.
If pricing really does provide information (see the work of Mauboussin), then these companies are pricing in a 40% productivity gain.
This is for copilots."
https://tomtunguz.com/ai-copilot-premium-pricing/
19. "Right now the world is evolving - AI is a massive platform shift. And by NOT adopting / spending on it, you risk loosing market share and slowly becoming irrelevant. Because your competitors are investing in AI efforts, you also have to invest in AI efforts.
At the end of the day these investments might not immediately result in better business outcomes (ie more revenue), but they certainly lead to better end user experiences. And very well may lead to better “other” metrics like retention or churn. If you’re competitors are building better end user experiences and you’re not, then you may find yourself in trouble in the short / medium term.
IF you believe the first part of my competing truths - that the size of the AI prize will be bigger than we imagine now - then you have no choice but to invest in AI given your competitors are. Failure to do so implicitly means you’re giving up on the race and ceding ground and market share to you competitors. This is the Red Queen Effect.
I do believe, however, that those who “win the race” in their respective markets will see orders of magnitude returns on their early CapEx. Industrial revolutions don’t last a couple years. They last decades."
https://cloudedjudgement.substack.com/p/clouded-judgement-71224-the-red-queen
20. "This is their fully vertically integrated model which was implemented by the current CEO. Covering the production all the way to retail i.e. from factory to store they control the entire process.
Well… almost all of it. Kaneko is highly differentiated from its main competitors not only because of its luxury positioning but also because of its fully vertically integrated operations. As far as they know, they are the only Luxury eyewear brand from Sabae that does this - and they have seldom seen any meaningful competitors. For their recently acquired Four Nines brands production is still outsourced in the same region and is still in the process of bringing it in-house.
Why this is important is that it helps JEH optimize and gain full control over their 2 key value propositions which are Quality and Branding.
By owning the factories located in their locale of Sabae, they’re able to ensure each crafted piece is delivered at the quality customers expect and to give substance to its luxury branding.
There’s also a common overlay over the 2 factors more generally which is the notion of “Made in Japan” (Woo hoo!).
I believe this very designation is important as it is a point of differentiation against major global brands that they structurally will not be able to replicate. (in the end, there are a lot of luxury eyewear brands). This term is synonymous with high quality and perhaps in the future scarcity. Which aligns perfectly with JEH’s luxury strategy."
https://madeinjapan.substack.com/p/on-a-true-made-in-japan-company-part
21. Mike Maples Jr is the best. Lots of insights in this discussion.
https://www.youtube.com/watch?v=Hod_-2sAbck
22. "But I would also argue, and I am being very honest here, that most of the Emerging Managers you come across as a Limited Partner, do not possess the “magic” you are looking for. If you talk with 250+ Emerging Managers a year, 1-5% of those will have the special something that will manifest itself to you within the first 5 minutes of your initial conversation."
https://embracingemergence.beehiiv.com/p/magic-emerging-managers-possess
23. "De Tocqueville also took a landscape view of America in his era. He said, “The greatness of America lies not in being more enlightened than any other nation, but rather in her ability to repair her faults.” Let’s hope so! The experts missed the shooter, and now they are missing the warning shots being fired over the bow of geopolitics."
https://drpippa.substack.com/p/going-ballistic-and-the-battle-box
24. "What a difference half a century makes. The U.S., which was supposed to be the guarantor of stability in Europe, is now the world’s most unstable great power. The likely return of Trump to the presidency will probably signal the end of U.S. support for Ukraine, and at least a partial disengagement from NATO and the transatlantic alliance in general.
In other words, Germany is sleepwalking into disaster — and Europe with it. With America largely out of the picture, Europe is on its own against Putin and his new Russian empire. On paper, Europe outmatches Russia economically and demographically. But without Germany taking a leading role, reality will be very different than paper.
Germans are understandably very reluctant to take on Russia, especially after the disaster of the world wars a century ago. But Russia isn’t going to give Germany a choice in the matter. Germany can stand up and fight back, or it can simply lose.
And Germans should not deceive themselves with the idea that Putin or his successors will be satisfied with conquering Ukraine. Ukraine, Poland, and the rest of East Europe are not a buffer that will keep Germany safe. Instead, they are potential fuel for Russia’s war machine.
Russia’s empire has always worked by enslaving conquered peoples and forcing them to fight in further wars of conquest. Ukrainians from the conquered territories have been rounded up en masse and sent to the front to fight against the Ukrainians who are still free. If the rest of Ukraine is conquered, a similar process will occur — the Poles, Estonians, Moldovans, and whoever else is next on Putin’s menu will find themselves fighting against “meat assaults” by enslaved Ukrainians. And if Poland and the rest of East Europe should fall, Germans will then find themselves fighting against “meat assaults” by enslaved Poles, Estonians, and Moldovans.
In other words, the more peoples Russia is allowed to conquer, the stronger it becomes. The stakes here are very high. If Germany doesn’t step up and lead, Europe will fragment, decline, and fall under the sway of Russia. Germany needs to rearm in a serious, vigorous way — it needs to spend at least 4% of its GDP on the military, not 2%, and it needs to become the biggest provider of armaments to Ukraine. This will require some economic sacrifices in the short term — higher deficits, and some cuts to welfare spending — though as Niall Ferguson and Moritz Schularick point out, a rearmament program could actually boost the German economy substantially in the long run."
https://www.noahpinion.blog/p/europes-fate-is-in-germanys-hands
25. "In some software categories, first mover advantage exists. In search, last mover advantage (Google) won because they benefited from the learnings of all who came before.
AI is characterized by waves of innovation & sudden change, a technological punctuated equilibrium.
Will the winners in this era be those who started early before the rapid advance or those who waited until afterwards?"
https://tomtunguz.com/where-are-we-in-ai/
26. "All the above suggests that US pressure to force an early end to the war might not result in an early end. Ukraine might opt to fight on against the odds. And events of February 2022 and since have demonstrated that Ukrainians cannot be underestimated - they have still fought valiantly to hold a supposed global superpower at bay for over two and a half years. Meanwhile, the kind of peace deal which Vance et al might be thinking of imposing on Ukraine might not prove sustainable - Russia might not, indeed is unlikely to keep to the terms.
Putin might just take whatever is given or conceded by Vance, on behalf of Ukraine, and push on later for more. The result will be a disaster for Ukraine, and ultimately for European security. With that in mind, Ukrainians might just prefer to fight on, to take their chances, and assume still that they can outlast Russia, that ultimately another Prigozhin style scenario might occur to bring the ultimate demise of Putin, and their saviour."
https://timothyash.substack.com/p/ukraine-vance-brings-more-risks-than
27. Great discussion here. Graham Moore is author of the fictional "Wealth of Shadows". Must read if you want to understand economics and geopolitics.
https://www.youtube.com/watch?v=xU8h0Z2yoaI
28. This is so good. Every founder needs to watch this. I 110% agree with everything Jason says here.
https://www.youtube.com/watch?v=bm8qrjPmomI&t=1s
29. The legendary Luke Belmar. Wisest young man on the internet.
https://www.youtube.com/watch?v=mMZDDEP8a1c
30. "Given the drop off or the “graduation” to traditional venture funds, this leaves me to believe that the majority of the syndicate leads who are still remaining (from pre-2022) are indeed some of the top syndicate leads as it relates to consistency of bringing quality deals to the table and providing a positive LP experience. While there’s much more to it (i.e. IRR, MOIC, DPI etc.), in this shorter timeframe, I do think it’s a testament to those syndicate leads who have remained constant through the rapid market changes and shifts.
A lot of people say the best (or most followed) newsletters, podcasts, and social media influencers are those who simply remain consistent without giving up. I think part of this is true for syndicate leads as well. It’s a lot of work, it’s an absolute grind trying to make each deal happen, and working with a high volume of LPs with varying personalities/thoughts all make it a very hard job.
Therefore, the syndicate leads who remain consistent over the years must be doing something right to survive and continue to put the work in to syndicate deals and successfully have LPs commit the amount necessary to invest in startups.
In many ways, this is similar to venture funds who go on to raise fund 2, 3, 4, 5 & beyond. Of course performance will vary, but if you get to fund 5, you are likely doing something right to have LPs enthusiastic to commit to fund after fund, after fund."
https://lastmoneyin.co/p/syndicate-leads-gone
31. "Political opinions are a personal choice. I am not advocating for the left or the right. Nor am I a populist or prone to buying into the conspiracy theories of some of the above-mentioned candidates or media personalities. But whether or not you agree with the diagnosis of the nonmainstream voices regarding the current situation, and especially their prescription of what’s required to address America’s myriad problems, it’s crucial to hear these voices directly, without a biased filter.
Personally, I’m fortunate to have the time to explore various news platforms online, allowing me to sift through data and verify what appears closest to the truth. Unfortunately, many Americans lack this luxury and rely on mainstream echo chambers, leaving them misinformed, angry and beholden to prevailing dogmas.
Until a media platform emerges that thoroughly sifts through all the news to present facts that more accurately represent reality, consume your daily media menu with a grain of salt."
32. "So far, the public movement of tech figures into the Trump camp is a trickle rather than a flood. But the reasons for it are structural, not random, and there are a lot of them. Democrats have been able to take the support of the tech industry for granted over the past couple of decades, but no longer. If they don’t perceive the problem and act, they could lose tech, just as they lost the support of many old-line industries in the 1970s and 1980s."
https://www.noahpinion.blog/p/understanding-the-new-tech-right
33. "Long-Winded Beginning: Over a 10+ year framework, you have our general belief. The world becomes more degenerate, desperate and lonely.
Governments will continue to print trillions and inflate asset prices.
People will spend more money on vice (drugs/gambling/p*rn). People will spend more of their time online since it isn’t possible for young adults to move out of the house easily (this is a personal finance issue that isn’t solved any time soon).
All of this means that the rich and poor separation gets bigger. Middle class is more hollowed out. The *unintelligent* upper middle class will likely gamble a lot to chase their old quality of life from childhood. This will cause them to come down the socioeconomic ladder.
Since crypto is both a real technology (international settlement, 24/7, ability to borrow peer to peer and decentralized) it will benefit from the online 24/7 dopamine trend.
It will also benefit from the gambling trend as it is the fastest high people can get (sports betting and crypto gamblers have significant overlap).
These are the major trends we’re intensely focused on. If they change then our entire world view has to change. At this point we see no significant trends that will stop any of them: 1) loneliness, 2) gambling, 3) rich and poor divide, 4) money printing and 5) general financial nihilism beliefs.
It’s up to you to make it to the other side and avoid blowing up!"
https://bowtiedbull.io/p/how-long-is-the-cycle-going-to-last
34. Watched this one twice now. It’s so good to understand whats happening in AI investing space.