Marvin’s Best Weekly Reads December 15th, 2024
“The secret of change is to focus all of your energy not on fighting the old but on building the new” – Socrates
Incredible business story. Basically an angel round to massive exit many, many years later. Big lesson: be humble and be of service.
https://www.youtube.com/watch?v=Y8RjsF1ygNg
2. "At the end of the day, if you’ve backed great companies, ‘hold and wait’ is certainly a reasonable strategy but it’s not clear it’s still the optimal one."
3. "The smaller players in the defense-tech ecosystem have been rooting for a Trump victory, seeing him as the kind of disruptor who could give them a bigger share of the Pentagon’s budget. For years, defense officials have said they have a strong appetite for cheaper, more nimble defense technologies — but new players have found it challenging to carve out a space under the Pentagon’s rules.
Many venture capitalists and defense tech entrepreneurs bet early on Trump’s campaign, convinced he could reform the Pentagon’s arcane budgeting system in ways that will push it to adopt their cutting-edge innovations faster.
“The single biggest thing that will make the difference is the amount of investment that the next administration puts into these advanced capabilities, and when I say investment, I mean procurement dollars to buy them at scale,” Chris Brose, Andruil’s chief strategy officer, told DFD.
Defense tech startups have long struggled to persuade the DOD to buy from them.
Venture-backed defense tech companies took less than 1 percent of the $411 billion in federal defense contracts awarded last fiscal year. That’s even as the department increasingly seeks out AI-enabled systems, defense venture funding continues to pour in and new global conflicts have stoked calls to modernize military arsenals."
4. "The vibe shift this time is a story about progressive Millennials realizing that when they declared total victory for their politics in 2020—it was a Pyrrhic victory. They aren’t out of the running, yet.
But they are going to have to think much more pragmatically about the trade-offs involved in their policy preferences, walk back activist overreach, and give up on the idea The New York Times or FBI or any other institution has a monopoly on truth. They have to get into the trenches and convince people that their interpretations of reality are correct."
https://www.8ball.report/p/vibe-shift-america
5. "Scott Bassett, the man most believe will be Trump’s pick to replace Bad Gurl Yellen as the US Treasury secretary, has given many speeches about how he would “fix” America. His speeches and op-eds provide details on how to execute Trump’s America First Plan, which bears a considerable resemblance to China’s development plan (which started with Deng in the 1980s and continues to this day).
The plan is to run nominal GDP hot by providing government tax credits and subsidies to re-shore critical industries (shipbuilding, semiconductor fabs, auto manufacturing, etc.). Companies that qualify will then receive cheap bank financing. The banks will again fall over themselves to lend to real companies because their profitability is ensured by the American government. As companies expand inside of America, they must hire American workers. Better paying jobs for ordinary Americans means more consumer spending.
The effects are amplified if Trump limits the number of Sombrero-wearing, cat and dog-eating, dark and dirty immigrants crossing the borders from “shithole countries”. These things juice economic activity, and the government takes its cut through corporate profit and wage income taxes. The government deficit must remain large to fund these programs, and the Treasury Department funds the government by selling bonds to banks. The banks can now re-lever their balance sheets because either the Fed or lawmakers suspended the supplemental leverage ratio. The winners are ordinary workers, companies that produced “approved” products and services, and the US government, which sees its debt-to-nominal GDP ratio fall. This is QE for poor people on steroids.
Wow, that sounds great. Who would be opposed to such a magical era of American prosperity?
The losers are those who hold long-term bonds or savings deposits. That is because the yield on such instruments will be intentionally kept below the nominal growth rate of the American economy. Folks also lose if their wages cannot keep up with the higher inflation levels. If you haven’t noticed, being in a union is cool again. 4 and 40 is the new mantra. That is, pay workers 40% more over the next 4 years, i.e. 10% per year wage hikes, to continue working.
For those readers who believe themselves to be rich, don’t worry. Here is a cheat sheet on what to buy. This is not financial advice; I’m simply sharing what I’m doing with my portfolio. Every time a bill passes and hands out money to approved industries, read it, and buy stocks in those verticals. Instead of saving in fiat bonds or bank deposits, purchase gold (the boomer financial repression hedge) or Bitcoin (the millennial financial repression hedge)."
https://cryptohayes.substack.com/p/black-or-white
6. "You’re exiting the protocol application investing time period and will be entering into the application investing time period.
Will you make it? Who knows. Only time will tell. By 2025 the winners in applications will likely be clear. Just don’t miss it and ruin your bloodline."
https://bowtiedbull.io/p/2025-last-chance-for-easy-gains-in
7. Excellent and timely discussion on Anduril and the defense industry.
https://www.youtube.com/watch?v=UUV4s71apbA
8. "Sphere is part of a bigger story about the city: about how a place that was once a playground out on the fringe of the country feels as though it has moved, for better and for worse, to the very center of American life and America’s future.
Just ask Las Vegans, who are feeling it, let me tell you. Not for these guys the usual boomtown lament that things used to be better. In the desert—where the population of the Las Vegas metro area has nearly doubled since the start of the 21st century—things are only heading upward! At every turn, I seemed to run into an unofficial member of the Chamber of Commerce, all but finishing one another’s sentences in their enthusiasm to make the case: The dining scene is booming. Chinatown is blowing up.
The Vegas residency beckons the biggest stars in the world, an irresistible alternative to the ordeal and economics of touring. The outdoors scene has become recognized as world-class. A high-speed train to Los Angeles is on its way, supposedly in time for the 2028 Olympics. Warner Bros. Discovery and Sony have each floated the idea of building major studios, the latter in partnership with Mark Wahlberg.
Above all, the argument for Las Vegas’s new status is spoken in the language of sports. Professional leagues’ fear of the taint of gambling once made it all but unthinkable that the city would ever have a home team to root for beyond the University of Nevada, Las Vegas (UNLV) Runnin’ Rebels. Now, in a cultural loop de loop, that school’s Confederate mascot has been canceled, while sports betting has become the all-but-official national pastime.
Vegas got its first big-league franchise in 2017, when the Golden Knights arrived as an NHL expansion team. Today, it’s eyeing the Royal Flush, including the WNBA’s Las Vegas Aces, the NFL’s Raiders (most recently of Oakland), soon enough baseball’s Athletics (also ripped from poor Oakland), and an all but assured NBA expansion franchise. The city hosted its first Super Bowl earlier this year, and will welcome the second Formula 1 Las Vegas Grand Prix this month. Nothing soothes an urban identity crisis like the sweet Xanax of professional sports. They are the fairy dust America sprinkles over a city to let it know that it is really real."
9. An especially excellent episode of NIA today. Worth listening to.
https://www.youtube.com/watch?v=Vgb9x0Pt_pM
10. Valuable and sober conversation. Not a fan of Tucker but Colby is sharp. This is important to understand the future of geopolitical strategy for America in the future.
https://www.youtube.com/watch?v=PtsGqGc-Iuw
11. A thoughtful discussion on the state and evolution of venture capital. Chris Paik is one of the smartest guys in the business.
https://www.youtube.com/watch?v=sjTKo1kz3KI
12. "The creator/celebrity brands that endure do three things right: 1) They’re authentic to the creator, 2) They have a genuinely unique insight, and 3) They move beyond the figurehead. The two most successful examples, in my mind, are Rihanna’s Fenty and Kim Kardashian’s SKIMS.
I expect we’ll have a few large venture outcomes that also touch on all three—creation, distribution, and monetization. I’m particularly interested in a next-gen Roblox (it boggles my mind that you have to know Luau to build in Roblox) that uses AI to crowd in a longer tail of creators, and I’m also spending a lot of time in the fan-fiction world, looking at how AI allows fans to spin up their own stories and build with each other’s IP Lego blocks.
The creator phenomenon—the concept of people having parasocial relationships online, making stuff and sharing it and earning income—isn’t going anywhere. It’s one of the biggest phenomena of the online age, and it will underpin another generation of large technology companies."
https://www.digitalnative.tech/p/the-evolution-of-the-creator
13. "Ownership percentage matters to VCs because of the explicit target return we discussed earlier. This is the most fundamental difference between VCs and angel investors.
Most angel investors aren’t too worried about ownership percentage because, unlike VCs, most angel investors don’t have specific return objectives. Whenever I’ve made angel investments, I wasn’t overly concerned about whether my investment had the potential to return 4x, 40x or 400x. My motivation was quite simply to invest in amazing founders who I thought were doing amazing things. At the end of the day, any positive return would generally be good for me (as part of a healthy, balanced portfolio 😉).
But VC funds are financial products that aim for a very specific target return (3x over 10 years). When you combine this objective with the power law nature of tech startups (that is, the notion that the majority will fail and a small percentage will drive most of a fund’s returns), the need to be explicit about ownership percentage starts to make sense."
https://chrisneumann.com/archives/why-do-vcs-care-about-ownership
14. "All these misunderstandings are a result of taking the Washington Myth at face value, and the US at its own evaluation; Things become much clearer if we recognise that the US is a powerful nation, but not an all-powerful one, that (without going full Andrei Martyanov) its military has quite serious structural and doctrinal problems that limit its effectiveness, and that its vast and conflictual government system makes it very hard to apply any kind of long-term strategy that takes account of reality on the ground. It’s also true that there is a tendency to confuse vague aspirations with actual plans.
This is what I call the Rain-Dance Fallacy: I want it to rain, I do a dance, it rains, therefore I have caused the rain. All over Washington there are stones where, if you turn them over, someone will crawl out with a long-lasting obsession about something or other which they will write and speak about incessantly, and for which they try to get support. Occasionally these correspond roughly to real things that happen in the world later, but there is seldom any kind of causal relationship.
And it’s becoming increasingly clear that the Washington Myth is just that: a myth.
The domination of the elite European mind by US examples and ways of thinking over the last few generations was not obvious or automatic at the beginning, and was the product of some of the cultural, political and economic factors described above. But it was also the product of chance: no other well-articulated and large-scale system of thought was available to challenge it, especially after the fall of the Soviet Union, still less in a language that everyone more-or-less spoke. It’s probably these contingent factors that have done the most to keep US intellectual dominance intact, in the absence of any obvious alternative. The problem is, it’s not clear what the alternative actually is now, or where it might come from."
https://aurelien2022.substack.com/p/a-wasting-asset
15. "This new off-price environment shows no signs of slowing down. At Equal Ventures, we believe the future of retail lies in these next-generation off-price platforms to create value for consumers and brands alike and we’re incredibly excited about companies that are seeking to redefine what off-price retail can be. Off-price is no longer taboo — it’s the future of premium retail."
https://newsletter.equal.vc/p/inflation-sparks-the-off-price-boom
16. "Glasnost unleashed a gang fight of epic proportions. As a result, Russia ended up in Perestroika, meaning restructuring. That will happen in the US too. The difference is that America is not the Soviet Union. Americans understand capitalism. They know how to create businesses or policies, restructure them, and adapt to change. Nobody does that better than the USA. But, any time you throw out the old to make way for the new, it’s more than painful. It’s a fight.
The fight is increasingly visible. The raid on the CEO of Polymarket is a telling sign. This was probably not only because Polymarket visibly signaled to voters that Trump would win by a landslide, which obviously would not have been welcome by Democrats. He was not arrested or charged. There is speculation that the issue is about insider trading.
Either way, Polymarket’s algorithms were stronger than anybody else’s, and now they may be accessible and visible to the current enforcement authorities. But, it is perhaps not totally coincidental that Polymarket is a Peter Thiel-backed firm, and Thiel is certainly the invisible power behind Trump and Vance. The raid signals that more will come. The French are investigating polymarket, too. All the Tech Bros that have backed Trump will be vulnerable to such raids."
https://drpippa.substack.com/p/american-glasnost
17. One of the more original and interesting folks in Hollywood. I like Mr Matthew McConaughey. This is a good interview.
https://www.youtube.com/watch?v=Eu1kHIztT24&t=2s
18. This is a great discussion on the latest in Silicon Valley.
https://www.youtube.com/watch?v=bsJMJK97EyM
19. We have not understood the huge positive effects that the Shale Revolution has been for America.
https://www.youtube.com/watch?v=9-qI-dFcKGA&t=1s
20. “Imperfect progress is progress. Perfect progress is unrealistic.” It’s simple, but it’s a truth worth repeating. It reminded me of a quote from a character called Jake the Dog on Adventure Time: “Dude, sucking at something is the first step towards sorta being good at something.”
It’s funny, but it’s spot on. Whether you’re a founder, an investor or a new podcaster like me, the early days can be rough. But it’s all part of the process."
21. "For any military strategist, geography is both the first and most unforgiving adversary and in the case of Taiwan, the island's natural defences present a labyrinth of complexities for China. The Taiwan Strait, a mere 90 miles of restless, churning waters, serves as more than just a separation between two lands; it is a formidable moat where, as conflict watchers put it, "distance is measured not in miles, but in minutes of vulnerability." What appears to be a narrow gap in geopolitical terms expands into a sea of operational headaches, with each wave and current posing a threat to the cohesion of an invading force.
The seasonal monsoons and tempestuous typhoons that regularly sweep across the strait are not mere inconveniences—they narrow the invasion window to brief moments of calm amidst nature's fury. An amphibious assault of this scale would require impeccable synchronisation of air, sea, and land forces, moving hundreds of thousands of troops and countless tons of equipment, all while exposed to Taiwan's formidable missile defence and the unblinking eye of US-backed satellite surveillance.
'In war, amateurs talk strategy, professionals talk logistics', and nowhere is this more evident than in the daunting task of launching an invasion across this hostile strait. China's amphibious fleet, though growing, still falls short of the capacity needed for such a monumental undertaking. In a desperate bid to close the gap, civilian vessels, slower and more vulnerable, would likely be pressed into service. These roll-on/roll-off ships, often described as lumbering giants of the seas, would be prime targets for Taiwan's anti-ship missile systems. Military experts often note that a fleet of that size is a gift-wrapped target waiting for a strike. Thus, the perilous voyage across the strait could quickly turn into a nightmare of logistical unravelling before the first boots even touched Taiwan's shores."
https://english.cw.com.tw/article/article.action?id=3825
22. Incredible connections & insights when you listen to this. Derek Sivers, Philosopher-entrepreneur.
https://www.youtube.com/watch?v=EGnDhd--BiM
23. "Entrepreneurs would do well to answer these questions not only before starting a business but to revisit them on a regular basis in the context of their current direction and initiatives. Products and business models are dynamic, just like most things, and it’s easy to get in a rut without zooming out and asking the big questions consistently. Every business must answer these seven questions both for today and tomorrow."
https://davidcummings.org/2024/11/16/thiels-seven-questions-every-business-must-answer/
24. "In other words, the USSR tried to build the edifice of industrial economy starting from foundation, and got stuck there. If you start from foundations, you will never ever get to the roof.
China, on the other hand, started from the roof, skipping the foundation part altogether. Unlike the Soviet way, Chinese way does work. The flip side, however, is that leaping to the front end, you leave many, and many, and many back end-related critical points behind. And that is because you never even bothered with developing them.
Still, it is important to remember that it doesn’t just materialise on the supermarket shelf out of nowhere. There is a long and complex manufacturing chain behind the shelf. And the production of a ready consumer good, such as a towel, a bicycle or a quadcopter is but the final, ultimate step of the chain."
https://kamilkazani.substack.com/p/why-the-ussr-failed
25. "Smaller models represent a significant innovation for enterprises where they can take advantage of similar performance at two orders of magnitude, less expense and half of the latency.
No wonder builders view them as small but mighty."
https://tomtunguz.com/small-but-mighty-ai/
26. "Whatever rules you pick, use common sense in picking them, and be respectful in applying them. The best time to discuss rules is while you’re still negotiating the terms sheet. Once a board gets in the habit of treating observers like directors, it can be hard to break. So from the outset, you should be ready to set norms for observers. Talk to new observers in advance so you know they understand the rules. And then respectfully enforce them if they get violated in the meeting."
https://kellblog.com/2024/11/14/the-proper-role-of-the-board-observer/
27. "Despite a 51-48 split in the popular vote, three-quarters of Americans agree on one thing: We’re on the wrong track. That’s been the political reality for most of this century — high levels of dissatisfaction, resulting in a series of “change” elections. The reason? Voters recognize that millennials and Zoomers aren’t as prosperous as their boomer and Gen X parents. One example: In 1981 the median age of a homebuyer was 38, today it’s 54.
The epicenter of the 2024 political earthquake wasn’t immigration, bodily autonomy, or democracy. It was the social contract between America and its citizens. The contract is straightforward: Work hard and play by the rules, and your children will have a better life than you did. For the first time in 250 years, that contract has not held."
https://www.profgalloway.com/the-testosterone-election/
28. "If you believe in liberalism, this is what you’re now fighting against — a combination of the petty Lenins of social media, the panopticon of smartphones, and the long arm of the world’s most domineering governments.
You are the rebellion, and technology has stacked the deck against you. Your only hope, essentially, is to either A) innovate new technologies that take power out of the hands of the petty Lenins and domineering governments,3 or B) somehow use the cultural and media spaces not dominated by those illiberal forces to spread liberal ideas strong enough to overcome the innate disadvantages of modern technology.
It would still be an exaggeration to say that you now live under the thumb of a global authoritarian regime ruled from Beijing. China’s military might hasn’t been used yet, and other countries’ nuclear deterrents still give it pause. Its control over your speech is far from complete — there are still many outlets for bashing the CCP without suffering dire consequences. And its influence over Vladimir Putin, Donald Trump, Elon Musk, and various European elites, while considerable, is not total.
But the idea that the U.S. could engineer an industrial revival, take action against CCP domination of social media, and lead a coalition of liberal powers to balance China’s rise, now looks fanciful. With the election of Trump, China is now simply first-among-equals of a loose concert of illiberal great powers.
Which leaves us, the people who still believe in liberalism, as the rebellion. If you believe in the primacy of individual human freedom and dignity, you are now fighting a desperate underground guerilla struggle to carve out any kind of a liberal space in a world that only 25 years ago upheld your values as paramount.
History has returned — indeed, it never ended — and there is no destiny or fate guaranteeing that you will end up on the favored side of it.
But that is no reason to give up."
https://www.noahpinion.blog/p/liberalism-is-the-rebellion-now-38b
29. "And thus, the Unholy Trinity of Venture Capital was born.
Agglomerators who could run further and faster with bigger funds, more fees, and bigger platforms.
Allocators who were looking to take massive chunky checks and have a shot at a good yield.
Absorbers who have an endless supply of places they can shove their cash, from training and inference to marketing or lobbying. It's expensive to rule the world.
A match made in heaven. Maybe not the heaven, but certainly a heaven.
And this all comes back to the point about the loudest people with the most capital shaping the future of a thing. Today, the loudest people are agglomerators like a16z and GC, allocators like UAE and CPP, and absorbers like OpenAI and Anthropic. And whether you like it or not, they are intent on shaping the game in their image.
I've said this before and I'll say it again. I am, by no means, saying that a16z or CPP or OpenAI are bad. But they are different. They are very different from the venture capital of yore. Granted, they may, literally, unlock artificial general intelligence in a way that will transform the world in ways unimaginable even in comparison to the renaissance, industrial revolution, or digital age.
So maybe that's worth letting them dramatically reshape the face of how innovation gets funded.
But remember what a stupider game is—a stupider game is thinking you're playing the same game when your opponent is, in fact, playing a very different game."
https://investing1012dot0.substack.com/p/the-unholy-trinity-of-venture-capital
30. This clip is important for anyone who thinks we can still work with the CCP or China. It syncs with my experience there, you will always get cheated or ripped off.
https://www.youtube.com/watch?v=bCnMz0Kx2f8
31. Important conversation on politics and tech. 2025 will be critical. American regulations under Biden have been disastrous for our future.
https://www.youtube.com/watch?v=g4jWb-0nj44
32. Quite an educational and interesting conversation with the ultimate biohacker and man who won't die: Bryan Johnson.
https://www.youtube.com/watch?v=NAPaW5S_RbI
33. "The NIF, based in Amsterdam, is one vision of how the region might do that. The fund plans to jumpstart ailing European deeptech innovation in a way that may also benefit its members and their militaries—independent of US support.
The US, which already spends more on defense than any othernation, is among eight NATO members that have so far decided not to contribute to the fund.
“They obviously weighed up the pros and cons and just felt that this doesn’t make sense for the US, given their strong heritage in venture capital,” says Rob Murray, the former British army officer who was an early proponent of the NIF in Trump’s first term.
In theory, the NIF will become a funding model that’s self-sustaining for NATO innovation priorities, says Michael C. Horowitz, a professor at the University of Pennsylvania who worked on emerging capabilities in the US Department of Defense until earlier this year. He sees what the NIF is trying to do as part of a worldwide trend. “Governments around the world, including in the United States, have understood they need to change the way they’re interacting with the private sector if they want to be able to more effectively both harness and nurture technology development to achieve their national security goals.”
https://www.wired.com/story/natos-tech-scouts-are-fortifying-europe-for-a-world-after-donald-trump/
34. "It’s extraordinary how inculcated this weasel-speak has become in the business world (similar copy is on many large brand and agency websites) with the ad and media industry particularly guilty. To me this is striking as they should be the ones who know better. There’s an old saying that the people who make propaganda are frequently the most susceptible to it, perhaps they’re also susceptible to other things such as going along with rot.
I would be extremely skeptical of working for organizations that suffer from this. It’s emblematic of how life under them will be (political, subversive, bureaucratic) vs a place focused on merit that champions creativity and rewards results. Note that a company being ‘inclusive’ as an independently chosen value could be great, but say it directly and in your own words, not mindlessly repeating rebranded Marxist slogans which in practice are illiberal and divisive.
It’s clear the ads and media sector needs its own ‘founder mode’ movement, or something like it, to cast off the decay and do great work once again. It’s past due, as everyone is fed up with our dystopian management consultant manufactured reality. We really need to do better here, because remember, these teams are the ones advising the rest of the world how to communicate."
https://www.hottakes.space/p/the-media-industry-badly-needs-to
35. "It initially all seems academic—numbers too big to make a difference to small startups. However, these dynamics change the incentives for companies making decisions even at the earliest stages. Where to locate, where to hire, which partnerships to accumulate, which customers to target and more are up for grabs.
The dollar reserve disparity has set up US markets to gear towards uber-productive technology-driven companies. The monetary premium boosts those home assets by funneling trillions of future cash flow towards capital markets. And the result is that the M&A activity in the US, especially in the tech sector, greatly outpaces Europe.
This is also why most European venture investors encourage their companies to target US markets. Even in the worst of times, it remains the land of liquidity."
https://www.eu.vc/p/the-land-of-liquidity-europe-and
36. Good geopolitical discussion with Ryan McBeth, found a new analyst and interesting influencer too.