Marvin’s Best Weekly Reads Dec 25th, 2022
“If you get tired, learn to rest, not to quit.” — Bansky
Merry Christmas to everyone who celebrates and happy winter holidays to those who don’t! 2023 is coming in very fast!
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"Based on everything I have observed, we are in for much more pain in Q1-Q2 of 2023. The current atmosphere is going to get worse.
While many hottest startups and category leaders across geographies have announced layoffs this quarter, it seems like we haven’t seen enough pain yet given the financial performance, funding climate, public market expectations, pandemic euphoria hangover, and venture capital-limited partner dynamic we are walking into in 2023."
https://sarharibhakti.substack.com/p/startup-life-will-get-a-lot-worse
2. "In place of centralized social media we see a few things rising. First, there’s TikTok and YouTube; although these do have some comment features, overall they’re far more similar to television, radio, and traditional one-way push media, with content driven by algorithms instead of user sharing. Second, Snapchat and Instagram, which are geared much more toward personal interactions and less toward public discussions. And though they weren’t included in the survey, my general sense from both anecdotes and overall usage trends is that chat apps — WhatsApp, Signal, Discord, etc. — are becoming more popular.
What these rising apps and platforms all share is fragmentation. Whether it’s intentional self-sorting into like-minded or community-moderated groups, or the natural fragmentation that comes from a bunch of different people watching their own algorithmically curated video feeds, these apps all have a way of separating people based on who they want to talk to and what they want to be exposed to."
https://noahpinion.substack.com/p/the-internet-wants-to-be-fragmented
3. Like to see Solo GPs rise to the fore. Interesting VC fund.
4. "So, if you find a business compounding capital at 25% per year, but it’s got a $10 billion market cap or a $30 billion market cap, I wouldn’t dismiss it. Instead, really dig in and try to assess how durable those returns are. How likely is that business going to be able to keep that pace. Because then it’s just a math problem. If the business can compound at 25% per year for 20 years, you have your 100 bagger.
(Roughly. To be more precise, you’ll have an 86-bagger after 20 years and a 108-bagger after 21 years.) I’d put much more emphasis on that and less focus on the market cap, per se."
https://www.woodlockhousefamilycapital.com/post/100-bagger
5. This is why I am maximum bullish on Ukraine's tech startup future and on Ukraine prevailing over the Russian barbarian orcs. #SlavaUkraini
"Russian shelling has targeted strategic sites across the country: power generators, electricity lines, nuclear power plants and wind and solar farms. As a result, roughly 50% of Ukrainian energy infrastructure has reportedly experienced significant damage throughout November. While the authorities incessantly try to fix the damage, the country is still facing both planned and unexpected power cuts. Some cities are also lacking running water.
“Everyone has already adapted to the constant blackouts,” says Stakh Vozniak, СЕО of Cargofy, a freight tech startup. “The team hasn’t lost its fighting spirit — people try to face the current challenges with a sense of humour.”
It’s perhaps this attitude that’s made Ukraine’s startup ecosystem so resilient this year."
https://sifted.eu/articles/candlelight-starlink-power-generators-ukraine
6. "From an economic perspective, the purpose of a city is to turn limited input into maximum output. The input can be people's time, money, or natural resources.
To achieve this purpose, cities need to do two things well:
-Enable as many people as possible to provide input
-Boost input that is more likely to generate valuable output
"Valuable," in this case, means whatever consumers are looking for — from the best doctors to cheap snacks. Cities do the above well because, like Instagram, they enable entrepreneurs to copy, reference, iterate on, and refine each other's ideas.
Hence, the larger the city and the more interaction between users, the more likely it is that valuable products and ideas will emerge. And just like on Instagram, urban inequality is a function of efficiency. The ability to distribute better goods and services, made by a handful of winners, to a larger number of people results in higher efficiency and inequality."
https://www.drorpoleg.com/cities-are-instagram
7. "So be humble. Be grateful and show your gratitude. If you get some money in your pocket, give something back to the community. Be a generous man, as this will placate the gods to some extent, and not arouse their hostility too much.
Investing money is something everyone should do, but remember why you are doing it. You do it to enrich your life, and to enhance your security. If it becomes an unhealthy obsession that detracts from these purposes, then it is time to rebalance your priorities."
https://qcurtius.com/2021/02/14/some-thoughts-and-opinions-on-investing
8. I really enjoyed this show. I wish I had learned some of his thoughts earlier in my life.
https://www.youtube.com/watch?v=5Feowi7mynk
9. Solid predictions for 2023 from a top VC and ex-operator who knows and has been around.
https://twitter.com/fintechjunkie/status/1602723757587828736?s=20&t=3OGcOGognP81gQgxM3ejOA
10. This is why the West needs to get off its ass and ramp up production and manufacturing of munitions.
And send as much of it to Ukraine so they can crush the Russian orcs.
https://taskandpurpose.com/news/russia-munitions-ukraine
11. Yes, Vietnam, Malaysia and Singapore are well positioned for the future.
https://www.investasian.com/property-investment/best-countries-invest-2023
12. "As an entrepreneur, it’s easy to get too focused on output and not provide enough attention to outcome. Both are needed and both are critical to growing a startup. The next time you’re thinking through activities and effort, breakout the output and outcome elements and ensure they’re aligned properly."
https://davidcummings.org/2022/12/17/output-vs-outcomes-for-startups
13. "Before Glasheen moved to this island, he was a successful entrepreneur worth nearly $30m on paper. He says he had two yachts, owned multiple waterfront properties, and caroused with titans of Australian commerce.
Today, he lives alone for long stretches at a time, seldomly returning to the mainland. He sports a sea-swept white beard and forages for oysters barefoot and shirtless. His only permanent companions are two mannequins named Miranda and Phyllis.
What compelled a one-time multimillionaire to trade in luxury and comfort for a life of seclusion?"
https://thehustle.co/the-millionaire-who-lost-it-all-and-became-a-castaway
14. "It’s why Russia was always going to fail in its invasion. So my worry in this week is that the power of the old narrative, which the Times still seems to harbor and which the Ukrainians are, understandably but I would say mistakenly, feeding, persists.
This is Ukraine’s war to win, because Ukraine is the more well-rounded power."
https://phillipspobrien.substack.com/p/weekend-update-7
15. "Fadell stops to examine a group of photos of the device: a hardware wallet called Ledger Stax. A hardware wallet is a utilitarian thing. It’s a physical lock for digital secrets. When you own cryptocurrency, your balance is protected solely by a private key that can be devilishly hard to keep safe. Ledger’s wallets, made of steel and silicon (and, OK, plastic), act as tiny vaults, but so far they have been off-putting.
Much like crypto itself. Fadell is reinventing this gadget, his first major design project in years. He has come to believe that by giving it the panache of the hottest consumer gadgets, he will redirect the crypto field, just as he helped kick off digital music and the smart home."
https://www.wired.com/story/tony-fadell-is-trying-to-build-the-ipod-of-crypto-ledger-stax
16. My guess is TikTok gets banned in next year or two. Until then, it’s still going to be the platform for music and virality.
"Obermann tried to make his skeptical colleagues understand that TikTok was going to be the next big thing. He likened user-generated videos, on which creators spend many hours, to the mixtapes people made back in the day—“the ultimate form of fandom,” he said. To me, he described TikTok as a combination of elements of Top Forty radio, music television, and streaming: “There has never been anything that can get a song hooked in your head the way TikTok does it.”
https://www.newyorker.com/magazine/2022/12/12/so-you-want-to-be-a-tiktok-star
17. "Lifelong learning is about being open-minded, challenging my own beliefs and behaviors but also about becoming better at what I do and regularly acquiring new skills. My ambition is to reach a certain level of expertise, mastery if you will, both to be able to help others but also to learn about what I’m really capable of.
By saying yes to the above we need to say no to a lot of things which is par for the course."
https://fewerbetterthings.substack.com/p/free-your-mind-and-the-rest-will
18. "Writing down the fear and identifying what is at risk has a way of right-sizing the fear.
Evaluating the risk helps bring our prefrontal cortex online. This part of our brain is able to view challenges with creativity and informed confidence. We see straighter lines to solutions than what our animal brains can see.
Planning, even simple one-sentence plans, help our nervous systems to relax."
https://www.mattmunson.me/fear-2
19. "Along the way, what you've gotten is a pretty powerful law of large numbers in asset management. If you raise larger and larger funds, two things happen: (1) the dollar value of the annual fees you're collecting gets much bigger, and (2) your possible return threshold gets lower. It's much harder to 3x a $1B fund than it is to 3x a $100M fund.
But if you're managing $20B instead of $1B, you're collecting $400M in fees each year instead of $20M. You start to see the opportunity that exists in raising more and more money.
I don't mean to imply that no VC is founder-focused, many are. Many are building unique models to best serve the needs of founders who are inventing the future. But I think it's important to reflect on the reality that, despite the marketing, founders are not a VC's customer. LPs are. The real customers are where the revenue comes from, and both (1) fees, and (2) carry come to VCs through LPs."
https://investing1012dot0.substack.com/p/the-blackstone-of-innovation
20. This guy Trung can write. The backstory behind James Cameron and The Titanic. Really fascinating.
https://trungphan.substack.com/p/titanic-and-the-greatest-film-run
21. A good criticism of the Decentralized State concept. Worth a read.
"Without sovereignty over some territory, a startup society is severely limited in its goals."
https://unfashionable.substack.com/p/a-decentralized-network-is-not-a
22. "One final point. Learning is ultimately a human process. Whether it is individuals or different sized teams, it is well-led humans with a sense of purpose who drive innovation and military adaptation. We are only at the very beginning of learning from how people have responded to the profound challenges of this war, developed new solutions and adapted their institutions.
But many clever military institutions - including our potential future adversaries - are watching, assessing and adapting. The success of the Ukrainians, and other Western military forces in future, will be shaped by how effective their learning cultures are."
https://mickryan.substack.com/p/learning-from-the-war-in-ukraine
23. Lots of interesting thoughts here. All young folks should listen to this: Luke Belmar.
https://www.youtube.com/watch?v=-FOFqaM5bdE
24. #SlavaUkraini!
"As steadfast as the Biden administration has been in its support for Ukraine, there’s a better way forward than letting the war grind on indefinitely the way it has over the last few months: give Ukraine the weapons it needs to win the war as quickly as possible. Ukraine has shown it can use NATO-standard weapons effectively against Russian forces, and there should be little doubt that if given more capable systems Ukrainian troops can push Putin’s armies out of their territory.
There are three priority capabilities that would speed a Ukrainian victory: long-range missiles, airpower, and tanks.
Overall, the U.S. goal remains to end the war as quickly as possible and with a Ukrainian victory. Putin will not negotiate under current circumstances, preferring instead to escalate against Ukrainian civilians and hope the United States and its European allies can deliver him from his own strategic blunders.
If the United States and its allies give Ukraine the weapons it needs to win the war, they can help bring this conflict to a speedier end by either expelling Russian forces from Ukraine outright or forcing Putin to the negotiating table.
Either way, it’s time to stop playing into Putin’s strategy and make a serious effort to help Ukraine win the war as soon as possible."
https://theliberalpatriot.substack.com/p/avoiding-a-long-war-in-ukraine
25. All investors need to read this letter from Howard Marks.
"As I’ve written many times about the economy and markets, we never know where we’re going, but we ought to know where we are.
The bottom line for me is that, in many ways, conditions at this moment are overwhelmingly different from – and mostly less favorable than – those of the post-GFC climate described above. These changes may be long-lasting, or they may wear off over time. But in my view, we’re unlikely to quickly see the same optimism and ease that marked the post-GFC period.
We’ve gone from the low-return world of 2009-21 to a full-return world, and it may become more so in the near term. Investors can now potentially get solid returns from credit instruments, meaning they no longer have to rely as heavily on riskier investments to achieve their overall return targets. Lenders and bargain hunters face much better prospects in this changed environment than they did in 2009-21.
And importantly, if you grant that the environment is and may continue to be very different from what it was over the last 13 years – and most of the last 40 years – it should follow that the investment strategies that worked best over those periods may not be the ones that outperform in the years ahead.
That’s the sea change I’m talking about."
https://www.oaktreecapital.com/insights/memo/sea-change
26. Must read for all founders. One of the best discussions on fundraising I've read in a while.
"The naked truth is that most investors are followers not leaders. And this is not a weakness of character. This is the job. Know about companies early and invest as late as possible (to derisk), while still being early (to get a good price).
As odd as it's sounds, their job is not to invest in the best companies but in the ones that the next investors will consider the best. They don't want to be contrarian, they want to be earlier. Nobody ever got fired for buying IBM, nobody will get fired for investing in last summer's hottest startups.
If they write smaller checks, they want to join the round when it happens. If they write bigger rounds they'll try to push another large investor out once they realize others are interested."
https://klinger.io/posts/first-time-fundraising-is-hell
27. "The economy will enter a “recession” globally. Worse is all the more likely. The rates, inflation, etc will catch up with the job, housing markets, and financial system.
Throughout 2023 we will see the continued decline of the housing market. Rate hikes will continue to grind down the middle class. Inflation will do the rest. Inflation won’t easy for some time. While some supply constraints have eased on the physical products side.
Major spends such as food and fuel haven’t; in-fact the input costs for such have increased.
With basics becoming more expensive, jobs diminishing and the economy on the rocks we’re in for a wild 2023."
https://mercurial.substack.com/p/2023-outlook
28. Don't agree with Sacks views politically but he has great observations on the US coast elites arrogance and bankrupt ideas. This is thought provoking.
https://www.youtube.com/watch?v=RGbAoR1D9vc
29. Great advice here: seriously take a break this Christmas time: you need it to prepare for a tough 2023.
"Take a Break. No Really.
It’s the holiday season. A time when most businesses naturally slow down. It’s a time where most people take a break to spend time with friends and family and to reflect on the year.
Unfortunately, many founders find it difficult to truly disconnect. They feel the pressure — both internal and external — to keep working. They forgo time with friends and family for an extra few hours of coding, some more time doing email, or a chance to work on an “important” project that’s been on the back-burner.
I’m here to tell you that it’s more important for you to take a break. Whether it’s for a few days or an entire week, allow yourself the opportunity to truly disconnect from your startup. Spend time with your friends and family. Watch a movie. Read a book. Resist the urge to open up your laptop and check your email. Unless you have end-of-year sales activity going on, I promise that your startup will be fine (and if you do, take a break in January)."
https://chrisneumann.com/blog/take-a-break-no-really
30. Talk about Adventure Capitalists: Chinese entrepreneurs in Taliban controlled Afghanistan. Totally crazy and off the charts risky to say the least.
https://www.youtube.com/watch?v=Ssc5PUm8a-Q
31. Lessons from Ukraine. This initiative to train and involve civilians in Taiwan is LONG overdue. The government and the people there need to wake and properly prepare for possible CCP invasion.
https://foreignpolicy.com/2022/12/19/taiwan-china-invasion-civil-defense-training
32. This is cool. DJ and tycoon. DJ Kygo.
https://www.youtube.com/watch?v=StfejB2zPac
33. "So to sum up, the early 2020s have basically taught us to worry about asset bubbles a bit less than we did in the 2010s, and to worry about excessive government stimulus a bit more. But that doesn’t mean that everything we learned in the 2010s was bunk.
Private banking systems really are fragile without the government to stabilize them. Aggregate demand definitely does matter, and the government really can affect it, with both fiscal and monetary policy. Basic Keynesian macroeconomic intuition still looks pretty good in the 2020s, just as it did in the 2010s and before. Of course that intuition is very far from settled science, but it’s still the best thing we’ve got."
https://noahpinion.substack.com/p/unlearning-the-macroeconomic-lessons
34. Very informative prediction on future macroeconomic climate. Worth listening to if you want to know how energy is tied to the economy. Net net: Germany & Europe is in big trouble.