Marvin’s Best Weekly Reads August 4th, 2024
“Summertime is always the best of what might be” — Charles Bowden
A masterclass on running and growing a SaaS business. It's so good. Every B2B founder should listen to this.
https://www.youtube.com/watch?v=exMSjv1bGEU
2. One of the best discussions on managing and scaling people. One of the toughest things in every org.
https://www.youtube.com/watch?v=W19LkUYGDuM
3. "It is difficult to appreciate just how much psychological, let alone financial, damage Japan and its investors have endured since the collapse of its late 1980s ‘bubble economy’. One estimate has it that, in terms of the subsequent loss of wealth suffered by property and equity prices, the Japanese economy has been hit by the equivalent of not one but two American Great Depressions.
Given that measures like GDP growth and unemployment have held up remarkably well over the period in question, and that Japanese society never once threatened to disintegrate into lawlessness or violence, you have to wonder whether the West might aspire to the level of stoicism that the Japanese have displayed.
The central banks of the rest of the developed world have had more success to date in boosting asset prices through their own deployment of QE, but they have had just as little impact on their real economies. What QE has done is made the asset-rich richer, and the poor relatively poorer. (Both trends have been turbocharged by governments’ disastrous counter-Covid policies.) But inasmuch as social equality is a stated aim of most governments, QE has been a disaster."
https://timprice.substack.com/p/the-main-event
4. "Entrepreneurs would do well think process first, goals second. Goals are important and part of achieving great things, but a process that is within your control is more important. Continually refine the processes and ensure the outcomes are aligned with the goals."
https://davidcummings.org/2024/07/06/think-process-first-goals-second/
5. "America has built the greatest entrepreneurial spirit of any nation that has ever existed, leading to Silicon Valley and the creation of some of the most important companies in the world. But many of those companies have utilized anti-competitive practices, taken advantage of people, and (in many cases) literally exploit human slavery and child labor.
America has created the most influential cultural megaphone and magnifying lensthat has ever existed, leading to Hollywood and the creation of some of the greatest stories ever told. But Hollywood has also help up a myriad of atrocious human beings and given them untold positions of influence.
America has offered some of the most important innovations and innovators in agriculture, from the mechanical reaper to precision agriculture, not to mention Norman Borlaug, whose work is believed to have saved over a billion people worldwide from starvation. But we also have intensely monopolistic food conglomerators, like Monsanto and Cargill, that have wreaked havoc on the American food system.
America has produced some of the most important medical breakthroughs in the history of mankind, from the mass production of penicillin to insulin, polio vaccines, the MRI, genomic sequencing, and minimally invasive surgery. But we also spend more than any other developed nation on healthcare, while witnessing declining life expectancy and atrocious infant mortality rates.
I don't want to be blindly optimistic. I don't want to be blindly pessimistic. I want to be wide-eyed, staring down the wide range of issues facing every single person, and then optimistically setting about to do anything I can to help make those things better."
https://investing1012dot0.substack.com/p/america
6. Great list here for coffee lovers in Europe. What a list: Lisbon, Budapest, Tirana, Prague, Warsaw, Vienna, Belgrade & Riga.
https://www.thrillist.com/news/nation/best-european-cities-coffee-ranking
7. Excellent discussion on the art and craft of enterprise sales.
https://www.youtube.com/watch?v=aQRS5xO3KpY
8. Long one but so worthwhile. Take your time with this one whether you are religious or not. Lots of insights not just on business but on living your best moral life.
"Bad quests--there are a lot of them. Are we actually making the world a better place? Or are we just pursuing selfish ambition? Are we pursuing relentless competition? Or worse?
When celebrities slap their personal brands on makeup companies, or alcohol bottle, or fashion companies, are they making the world a better place? Or are they exploiting their own brand value to sell commodities.
Technology is not any different. Technology is--I would define as--doing new things. That seems like a fairly reasonable definition. Globalization of commodities are copying things that already work that you already know are going to work.
So I think the question that I'm always pushing people to ask is, How is what you're doing a good quest?
But, I found after--I wrote a blog post about this a couple of years ago. And my expectation was that people would read it, and then they would go back and be reflective, and they would say, Oh, man, the thing that I'm doing is not a good quest. I should quest in some other way.
But actually, what happened is that human psychology took over, and people could convince themselves that anything was a quest. My wife and I were at a dinner and somebody walked up to me and was like, Trae, I read your blog post. It was brilliant. I am on a very good quest. Let me tell you about my NFT company.
The Feels Bad Is Good category is probably the best venture category. That's where like most awesome companies are built, because there's a moat. The moat is that other people don't want to do it because it feels bad. And so it ends up being far less competitive. The kind of slightly disturbing answer to the question is that most of the ones that don't have venture returns are the Feels Good, Is Good category, because those are the ones that everyone's gonna do.
They're all going to compete with each other. There's 20 companies doing the exact same thing.
And you're like, Man, I really like this idea. It's like, yeah, you weren't the first one to come up with it. There's 10,000 other people that agree, and all the capital is going to flood into those things. All the founders are gonna flood into those things. And everyone is going to pat themselves on the back about how great it is. And no one's gonna have an exit--that matters."
https://aletteraday.substack.com/p/letter-199-trae-stephens-2024
9. Really enjoyable conversation with Andrew Wilkinson on his life and adventures. So much to learn. Can't wait to read his book.
https://www.youtube.com/watch?v=sHzThQwkUps
10. You can influence everything but control nothing. This was a thought provoking discussion.
https://www.youtube.com/watch?v=-mRc2t4V9y0
11. "The summer gatherings of the alphas are upon us. This weekend, the annual running of the bulls will commence in Pamplona, Spain. And a couple days later, the media, tech and finance moguls of the world will begin descending in their private jets on Sun Valley, Idaho, for the annual confab hosted by Allen & Co., boutique investment bank.
Still, it wouldn’t be shocking if some of the media and AI executives there end up hashing out agreements behind closed doors in between speaker sessions. After all, Sun Valley is known as a kind of Coachella for dealmaking. Disney’s acquisition of ABC, AOL’s bid for Time Warner and Jeff Bezos’ purchase of The Washington Post were all reportedly negotiated either in full or in part at the event. And if the deal doesn’t get done before then, it wouldn’t be surprising if Shari Redstone finalized her off again, on again discussions to merge Paramount with David Ellison’s Skydance Media at the conference.
All the dealmaking isn’t exactly a shock given who hosts the event: Allen & Co., a top-tier investment bank. The firm, founded over a century ago in New York, is small compared to behemoths like Morgan Stanley and Goldman Sachs and seems to prefer staying largely invisible to the wider world (it doesn’t appear to have a public-facing website).
The Sun Valley conference, which the firm started in the early 1980s, has helped it punch way above its weight in the investment banking business, giving wannabe attendees an incentive to funnel business to the bank to better their odds of getting a ticket."
https://www.theinformation.com/articles/fear-and-longing-in-sun-valley
12. Long overdue to go visit Reykjavik in Iceland. 2025 is the plan to visit a portfolio co.
https://www.hemispheresmag.com/europe/iceland/reykjavik/three-perfect-days-reykjavik/
13. "All this is happening just as two conflicting forces in geopolitics are becoming more apparent. The world is edging toward a deal over Ukraine & toward WWIII at the same time. Zelensky is now ready for a resolution. Viktor Orban just communicated to the West that Putin is, too. The West has come up with a clever way to get around the critical question of NATO membership by telling Ukraine that it is too corrupt to be either in the EU or in NATO. That solves that problem. We are heading towards an armistice where Russia keeps what it controls, Ukraine keeps what it still has, & a demilitarized zone will keep them apart. There will be no winner & no loser.
The geopolitical consequences of all this are historic, but there is almost no comprehensive discussion of it anywhere.
To finish, Sir Niall Ferguson recently wrote a compelling piece saying We Are All Soviets Now. He says this is because we have bloated debt and are run by “senescent leaders.” He has a point, but there is something bigger at stake. We are all Soviets now because of our internal denial and willful blindness. We are stumbling into WWIII because we think Ukraine is the war and it's about to come to an end while not having any discussion about the broader geopolitical problems that range from vast space to tiny Scandinavian islands.
We are stumbling into WWIII because no one wants to cross the President’s position, which is that the war in Ukraine was totally unprovoked which maybe it wasn’t. We do not recognize our own vulnerability to our own bureaucratic system, which has created not only massive debt but also a certain way of running the country which are now about to change thanks to The Supreme Court rulings. The most popular Presidential candidate is not getting any airtime because he is a threat to the two-party system and to their financial backers.
The parties are bought, becoming increasingly dysfunctional and refusing to embrace change. That makes us a lot like the Soviets. Biden is the new Brezhnev. The apparatchiks will not acknowledge or address any uncomfortable facts, preferring to label anyone who mentions them, hence Robert Hur is a traitor for pointing out the obvious. Europe is in denial, too as it becomes Trumpian, shifting to the right.
What if trouble starts on a tiny Swedish or Norwegian island, in space, or in the aftermath of the French elections? Will hardly anyone mention it in the interest of keeping things “low-tension?” Denial is now the problem more than the problem is the problem.
Will the President step down or fall down? Either way, there is now a fragility that renders the world more vulnerable to geopolitical & strategic trouble than we think."
https://drpippa.substack.com/p/the-geopolitical-avalanche
14. "None of this, of course, means that having the “look of a leader” means someone will be a good one. Nor is there any evidence that voice pitch correlates with leadership skills. Todorov has found that competent-looking CEOs are not better at their jobs, even though they’re likely to receive higher compensation packages. At West Point, even after controlling for athleticism and academic ability, dominant-looking cadets are more likely to achieve higher military ranks.
Thus, how a political candidate looks and sounds can influence their likelihood of winning an election.
All of this research helps to illuminate both Biden’s lackluster performance in the polls, despite the continuing strength of the economy, and Trump’s slight lead, despite his dubious character and legal battles. As we observed in the debate last week, Biden appears increasingly frail, whereas Trump, though not immune to the effects of aging, still exudes vigor.
Moreover, the changing geopolitical situation may be influencing voter perceptions. The ongoing conflicts in Ukraine and Gaza and the potential one in Taiwan may cause undecided voters to favor a leader who looks and sounds more dominant. Indeed, this may have been an element in Trump’s unexpected 2016 victory, when ISIS was a prominent concern."
https://www.robkhenderson.com/p/the-look-of-a-leader
15. “I wanted to build a brand that was approachable and accessible,” says Gill, “One that would work just as well at Whole Foods as it would in Walmart.”
The mass appeal of Bachan’s is one of many reasons why Gill’s sweet and savory sauce started to stick soon after he launched the brand in 2019. A beloved family recipe is another. Bachan’s, named after the Japanese American term for granny, originated from a sauce his own grandmother-made for decades. Bachan’s is now the top-selling barbecue sauce at both Amazon and Whole Foods, and the fastest-growing condiment brand in the country. With estimated annual revenue topping $70 million, Bachan’s is having the kind of moment that made Sriracha founder David Tran a billionaire.
Bachan’s is profitable, too, and Forbes estimates operating margins are as much as 20% annually. Gill declined to comment on the revenue or profitability of his private business. At a conservative 5 times multiple, Bachan’s could be worth more than $350 million, and his company could get acquired for a lot more. Spice, after all, sells. In 2020, McCormick spent $800 million buy Cholula hot sauce—in a deal valued at 10 times revenue. Other recent deals for bold-flavored condiment brands have sold for as high as 8 times.
“I bootstrapped for so long and took so much personal financial risk to be able to control my business and then become profitable,” Gill says. He has held onto the majority ownership, even after raising $17 million from investors over two rounds and making sure that all of Bachan’s employees, from the warehouse to the headquarters, own their own shares. Gill credits his control with fighting for the right terms when dealmaking, instead of going for bigger valuations. He says he has no plans to raise more in the short-term, adding that the company is “totally self-sustainable.”
https://archive.ph/4YfM2#selection-481.0-509.583
16. "In short order, “The Entertainer” was on Nichols music boxes all over the nation. And 25 years later, it has become the country’s ice cream truck song of choice.
That’s according to Bob’s son, Mark, who now runs Nichols Electronics alongside his wife, Beth. Today, Nichols Electronics no longer controls just the vast majority of the music box market; it is the market.
Mark estimates that the company, which he inherited, is responsible for up to 97% of the music boxes in circulation.
How did ice cream truck music become a thing? And how did one tiny family business secure a stranglehold on the market?"
https://thehustle.co/the-company-that-has-a-monopoly-on-ice-cream-truck-music
17. "To sum up, a day at the beach is VERY good for you, you should do it more and more often.
Better IRR
Higher MOIC
Good for health
More time to think
Happy wife and kids"
https://privatequityguy.beehiiv.com/p/ministeve-schwarzman-30-irr
18. So many insights from one of the best VCs in Silicon Valley and an excellent dude to boot. This is a must listen to.
https://www.youtube.com/watch?v=h9o6gPQA6LA
19. How to build wealth from Andrew Wilkinson. Lots of good learnings.
https://www.youtube.com/watch?v=ra_dC70-dXk&t=25s
20. Challenging traditional VC fund structures. Hunter/ Satya have been pioneering a new way of investing in early stage startups.
Love that they have built a new model that works for them (and founders). Playing the game in their own way.
https://www.youtube.com/watch?v=XxzvDAPok_E
21. "A fractured, depressed, and suicidal nation;
--unable to make sound, pragmatic decisions,
--culturally weakened by utopian goals and
--economically dependent on the rivals it created
may continue to limp along for years.
However, that may instantly change if a war with China happens. At that moment, all the sins of the last thirty years will instantly become impossible burdens. Burdens that make it impossible to respond to the challenges it faces in any meaningful fashion. At that point, collapse may be the only possible outcome."
https://johnrobb.substack.com/p/the-collapse-of-complex-nations
22. Always learn new things from Zeihan. He can be bombastic at times but long term trends based on demographics & resources seem right.
https://www.youtube.com/watch?v=gMJyhsZ7Ryw
23. "Since the beginning of the Ukraine-Russia war, there have been at least ten incidentsat various ammunition factories on either side of the conflict. The public reports haven't always listed the cause, but some have attributed the attacks to saboteurs and long-range strikes (drones, missiles).
As they say, the old ways are the good ways. But just as the Ukraine war has featured a mix of old tactics and new, it is likely that sabotage operations today and in the future will utilize cutting edge technology to achieve these kinds of tactical outcomes."
https://steinman.substack.com/p/the-future-of-sab0tage
24. "The traditional media business is in a spot of trouble, but that doesn’t mean it’s doomed. People still want great reporting, and there are more people than ever who can produce it. What’s broken is the business model. Now is a time for experiments. Now is a time for creative thinking. Now is a time to invert some pyramids."
https://hamish.substack.com/p/traditional-media-and-substack-can
25. Learning from the best in the business. Sequoia is still tops.
https://www.youtube.com/watch?v=e79QcKYsHSY&t=1655s
26. "The inadequacy of the defense industrial base looms large. The problem here isn’t simply America’s present incapacity to build enough of what is needed but an incapacity to do so efficiently and on budget. Any serious agenda to restore America’s economic strength and prosperity must address this industry’s failures.
Take shipbuilding. In 2024, the U.S. Navy’s combatant surface and submarine forces are too small. And with China in mind, the problem is getting worse. As the Center for Strategic and International Studies notes, “The [People’s Liberation Army Navy] operates 23 destroyers launched in the past 10 years compared with 11 operational U.S. destroyers. … China’s productive advantage is reflected in the relative ages of active Chinese and U.S. ships. About 70% of Chinese warships were launched after 2010, while only about 25% of the U.S. Navy’s were.”
Top line: If America wants to be ready to fight and win a war with China over Taiwan, we better start acting in that pursuit. If not, we better mentally prepare ourselves to lose the most politically defining war of the 21st century."
27. Very interesting opportunity.
"TLDR: The USDA Rural loan program may be a last refuge and upward mobility token available to the masses against the backdrop of a hostile tax regime coming to a locale near you."
28. "His words offer founders a key lesson: the future holds insights for the few who spend time there first and pursue their curiosities authentically.
Traditional approaches to thinking of startup ideas often trap entrepreneurs within existing thought patterns, limiting their ability to see and exploit transformative opportunities.
To find the best insights, it’s better instead to look for opportunities to live in the future. It’s more effective to immerse yourself in cutting-edge technologies and understanding how to unlock their potential for creating radically different futures. This process enables entrepreneurs to intuitively identify missing elements that can more likely lead to non-consensus insights that lead to huge breakthroughs.
There are lots of ways to get out of the present. You can tinker with cutting-edge technologies and solve your own problems like the Mosaic team. You can solve them for customers that you spend time with who are living in the future like the co-founders of Okta. Or, like Maddie Hall at Living Carbon, you can catapult yourself into different futures.
But ultimately, the best cheat code I’ve seen for discovering insights remains the same:
Get out of the present."
https://medium.com/@m2jr/is-this-from-the-future-10128cac4ed6
29. I recommend this discussion on growth from an old 500 colleague. I listened to it twice, it was that good.
https://www.youtube.com/watch?v=apsQGQM9HDs&t=1855s
30. "Content can only briefly be king. In the long term, distribution advantages enable you to get paid for both your shitty content as well as your hits. Content-first companies are only as good as their next amazing product. Ellison does recognize this dynamic. In a podcast interview he conducted after the deal was announced, he said, “We live in a world where an A- is failing. You have to have a creative culture that believes quality is the best business plan.” This is a noble sentiment and theoretically possible, but it is much harder to produce A+ quality content for years than simply owning the distribution during that time.
The original Paramount knew this. For nearly 100 years, it rode each technological wave by capturing unique, defensible distribution.
There has never, ever, in the history of media, been a company to reach that size without some kind of distribution engine. Even if Paramount had been permitted to keep its studio system through the present day, the internet would render it moot. The attention economy is simply too ferocious."
https://every.to/napkin-math/paramount-s-dilemma-content-isn-t-king-distribution-is
31. "Achieving persistence takes mental toughness, passion for what you’re doing and sacrifice in many aspects. But during a time where most look for the easy way out, the quick fix, the short-term band aid, the reliance on being algorithmically or politically chosen, it’s an exceedingly effective play.
You probably don’t need more guides, gurus or courses, you just need to consistently ‘show up’ in a way that matters and transcends any short-term trends. Fast success and attention fade equally quickly. Instead, proceed steady and methodical."
https://www.hottakes.space/p/why-persistence-rules
32. "Our political establishments seem unable to overcome their disbelief that the good old days of globalization are a thing of the past.
Meanwhile, Russia and China have been arming at speed and scale, with Moscow fully mobilized to generate a force of 1.5 million, and Beijing already commanding a military of over 2 million. China’s People’s Liberation Army Navy is already numerically bigger than the U.S. Navy, its shipyards building new units faster than anything U.S. contractors can achieve. And the same goes for the slow rates of munitions production in the U.S., not to mention the subpar performance of Europe’s largest economies when it comes to rearmament. A case in point, this year Russia is expected to produce about three times more artillery munitions than the U.S. and Europe combined — and at much cheaper cost.
Truth is, as the axis of dictatorships continues to consolidate, both politically and militarily, the collective West — though declaring itself united— remains fractured. Democratic allies are often at cross-purposes when it comes to their economic interests, and they lack a shared threat assessment as well."
33. Explains the rise of UK and why UK is now in trouble.
https://www.youtube.com/watch?v=-e2R6XBHuQQ
34. Jason always gives a great recommendations. His data sample set in B2B is unparalleled.
https://www.youtube.com/watch?v=EYY7BErgr3k
35. "Most firms have a standardized investment process in which a certain number of partners need to meet the founders of a prospective investment, votes have to happen in a certain way, etc. If, in any given summer week, one or more partners is on vacation, that process will take longer.
Some of the practical impacts from the perspective of a founder include:
–It takes longer to schedule an initial meeting with a VC
–The time between meetings increases
–The amount time needed for a VC to complete their diligence takes longer (as analysts and others at the firm also take vacations)
–There is more inertia when it comes to building the type of excitement/momentum that leads to FOMO (see this post on the adrenaline of deal flow for more)
As a result, a process that might typically take one week stretches into two. Or two stretches into three.
Now map those delays across the majority of funds that you’re talking to."
https://chrisneumann.com/archives/why-is-summer-a-bad-time-to-fundraise
36. "The war in Ukraine provides the West with the clearest example in the modern era of a war of good versus evil. The brutal atrocities of the Russian military throughout their Ukraine campaign must act as a clarion call for countries that believe in the rights of individuals and in preserving democratic systems.
There is a strategic imperative and a moral obligation to assist Ukraine to win this war as rapidly as possible. The deliberate Russian attack, using precision missiles against the children at the Okhmatdyt hospital, provides us with more evidence for why this is so. Let’s hope that those attending the NATO summit decide that a shift in strategy for the war is necessary."
https://mickryan.substack.com/p/the-kyiv-childrens-hospital-attack