Marvin’s Best Weekly Reads December 24th, 2023
“It takes a lot of courage to show your dreams to someone else.” —Erma Bombeck
"If the unicorn era taught us one thing, it’s that more isn’t always the answer. More money doesn’t solve fundamental problems. More people don’t move faster. More features don’t fix product market fit.
There are very real advantages to running lean. Talk to any founder who’s bootstrapped to venture scale and they, like Ryan above, will acknowledge their lack of resources and the constraints they enforced ended up being the superpowers behind their success.
Once you see what some can do with $500k you’ll never not be shocked at how little others can do with $5M (or $50M!)."
https://medium.com/@bryce/the-indie-era-of-startups-c92704a75ed2
2. I really like Justin Waller’s content. Every young man and old should listen to him.
https://www.youtube.com/watch?v=kQp3Z8fAoiA
3. "At the theoretical level, terrorism is a method for jump-starting a guerrilla war fought in the moral realm.
Terrorists use targeted violence to force the target state to overreact in the hope that this overreaction will do so much moral damage to the state it creates the conditions needed to ignite a guerrilla war.
In our current situation, while the state’s overreaction might be offline, the moral damage it does will be adjudicated online, and the guerrilla war ignited by it will be fought there."
https://johnrobb.substack.com/p/israels-online-front-collapses
4. "The U.S. was by far the biggest producer, building twice as many large ships as all other combatants combined, and at least twice as many aircraft as any other combatant. The country’s mighty auto, aircraft, and ship industries took a while to ramp up war production, but when they did, nothing on the planet could match them.
Books like Freedom’s Forge and Destructive Creation will tell you the story of how this was achieved. And that industrial dominance carried over into the Cold War, bolstered by the addition of Germany and Japan — two other leading manufacturing nations — as U.S. allies. The Soviets could threaten the West with their nuclear arsenal, but when it came to war production, the free world could outproduce the communist world.
For the first time since before the world wars, that situation has changed. The rise of China as a manufacturing powerhouse to rival the U.S. and all of Europe combined was always going to present a major challenge. But the utter withering of the U.S.’ defense-industrial base since the turn of the century has made this much less of a contest. The balance of military production potential now lies firmly on the side of the autocratic powers.
So there are actually quite a few things the U.S. can do to at least partially restore the invisible shield that protected our way of life throughout much of the 20th century. The question is whether a bitterly divided country like ours can muster the will to pay the necessary costs, make the necessary changes, and upset the necessary incumbents. In the past, national security was enough to motivate the American people to change their economic system; hopefully that will still work in the 21st century. If not, it will mean that the true Arsenal of Democracy — the American people’s willingness to defend themselves, their freedoms, and their world — has been depleted.
And China and Russia would have every motivation to weaken the U.S.’ economy as much as possible and as permanently as possible, simply because this would remove the U.S. as a potential threat. Neither one of America’s rivals would forget how the Arsenal of Democracy had kept them at bay for many decades; they would both want to make sure that a reinvigorated America could never threaten them again. They would seek to eliminate American power not because they hate us and our freedoms, but simply because this would neutralize a potential long-term threat.
The U.S. was ambivalent about whether it made sense to weaken and hobble Russia after the Cold War, ultimately deciding against it. China and Russia would not be so kind after winning a decisive victory in Cold War 2."
https://www.noahpinion.blog/p/people-are-realizing-that-the-arsenal
5. Super good tips for business and life success. Tai Lopez.
https://www.youtube.com/watch?v=-h9HQuXPaW0&t=2s
6. "Henry Kissinger essentially managed conflicts on the edges of the American empire while ensuring his adopted country would remain the leading player in global affairs. He represented a unified power centre. Today there is no longer a Kissinger to talk the parties off the ledge and even unified leadership in Washington is absent: Biden’s position on Israel and Gaza is now under attack from his own staff.
We are entering a vacuum where American power is fraying and anything is possible. The destruction of Ukraine is one, but so is taking the two-state solution to its last resting place. Henry Kissinger’s death marks the end of an era and a journey into a level of instability that was last seen when American’s famous top diplomat fled Europe in the late 1930s. His life was an arch spanning an era that is now over."
https://pieterdorsman.substack.com/p/the-end-of-pax-americana
7. "We are always ready, and want, to believe that this time it’s different, we will do good while making billions. The last big corporate jazz hands was the ESG movement, purporting to prioritize environmental, social, and governance concerns over shareholder returns. Succumbing to this siren call, we abdicated our responsibility to discipline corporations and curb the externalities wrought by the pursuit of profit, believing instead that one profit-seeking entity could cajole another profit-seeking entity to seek something else.
ESG and (in-)Effective Altruism are heat shields against real limits on action. They allow corporations to retain their power (and their capital) while expectorating exhaust into a headwind. Every time I write about the abuses of tech companies, I get the response, “Well, if you don’t like the companies, don’t use their products.” This is the cry of the defeated, those so broken on the wheel of corporate exploitation they’ve unilaterally disarmed, abandoning the one power we the people possess that’s equal to capital: democracy.
It’s not up to each of us to protect the commonwealth, it’s up to all of us. Put another way, the most effective ESG is not a fund charging higher fees to invest in American Airlines. It’s a perp walk."
https://www.profgalloway.com/mammon/
8. "I think Western private sector creditors should send a strong signal to our governments - debt relief for Ukraine, yes, but only after immobilised/frozen Russian assets have first been utilised.
Our governments normally are very good at spending other people’s money - taxpayers or private creditors dumped on in debt restructurings - so it seems obscene this time around that they seem to think that the country that caused all the damage, committed war crimes, and genocide, should, get away without paying a penny. Our governments are protecting the assets of the aggressor herein and remarkably writing a cheque from us to avoid making Russia pay. This should be a huge political scandal.
Lots of focus on ESG these days and I would think as asset managers we have an ESG responsibility to call out our own governments for this, and to absolutely make sure that Russia pays for its aggression against Ukraine."
https://timothyash.substack.com/p/ukraine-debt-relief-only-after-russia
9. "Advanced economies are now entering a demographic doom loop where an ever-increasing percentage of the nation’s productive capacity is siphoned into old-age care and pensions. This trend is destined to continue until either the demographic pyramid normalizes by having more children or the society itself dies. The Children of Men isn’t a movie, it’s a documentary. What’s more is the structure of modern society is oriented in such a way that it discourages the formation of families and the bearing and raising of children.
It is impossible to escape the coming demographic and economic crisis. The time to avert disaster has long since come and gone. As the security order underpinning globalization erodes, so too do the global economic, financial, and political systems which dominated human affairs for the past 30 years deteriorate. Chaos is inevitable. The question is only how devasting the coming storm will be, and that is predicated on the willingness of those in power to implement reform.
The looming danger is elites will choose their own self-interests and the interests of their particular generation over the best interests of the nation. Sadly, this is the pattern displayed for the past three decades. It is difficult to shake the idea that unless there is a changing of the guard, the greater community will suffer grave consequences for its leaders’ selfishness. Elites remain delusional that the status quo can be saved. They would rather expend the remnants of their power, wealth, and prestige in a desperate attempt to hold on to what they have rather than build something new. They are, in the truest sense, conservatives.
Reform is not merely necessary, but inevitable. Either we choose to reform American economic, educational, and cultural systems, or the coming breakdown of the Liberal International Order will force a restructuring. The people cannot tolerate declines in their security and prosperity indefinitely. It is only a matter of time before the floodgates break."
https://www.shatterpointsgeopolitics.com/p/demographic-winter-in-the-twilight
10. Very bullish on Uzbekistan.
"With population of 36.2 million Uzbekistan has the largest potential consumer market in Central Asia. It is also a young country, with more than two-thirds of the population being of working-age (15-64), contributing to a strong labour force. The country has maintained a high GDP growth, averaging 5.8 % over the last ten years.
Despite the COVID-19 pandemic, thanks in part to reforms to liberalize prices and remove barriers to domestic and international trade, the country’s economy was one of the few in the Europe and Central Asia (ECA) region to avoid negative dynamics in 2020, showing GDP growth of 1.7%.
Although these quantitative figures look impressive, they are incomplete without a proper understanding of the qualitative context and breakdown of the 7.1m households and incomes within that population. Digital penetration is still nascent in the country and the majority of the population are still unaccustomed to transacting online. This blog post analyses the local market dynamics to identify the correct strategies for consumer-focused startups to succeed."
https://sturgeoncapital.substack.com/p/the-uzbek-consumer-opportunity
11. I am surprised as many here to write this but this was a fascinating conversation with Tucker Carlson. It's really worth listening to here.
Good perspective on what's happening in American culture.
https://www.youtube.com/watch?v=4pLY1X46H1E
12. Lots of good geopolitical thoughts here. India is really well positioned. US political and media elites are brain dead, leading the West nowhere. China is making stuff and accumulating a lot of real power.
https://www.youtube.com/watch?v=CDlXPSKPtUo
13. Be a Live Player! We need more of them in civilization to drive us forward.
https://www.youtube.com/watch?v=y0SwVCWPinw
14. “But Verdon has a social vision of his own: “If we can make it so that more people are optimistic about the future, are inclined to build, take risks and go forth and have the greatest impact it can on the world, that's a net positive. So if we have to be not so polite on the timeline, then so be it.”
At first blush, e/acc sounds a lot like Facebook’s old motto: “move fast and break things.” But Jezos also embraces more extreme ideas, borrowing concepts from “accelerationism,” which argues we should hasten the growth of technology and capitalism at the expense of nearly anything else. On X, the platform formally known as Twitter where he has 50,000 followers, Jezos has claimed that “institutions have decayed beyond the point of salvaging and that the media is a “vector for cybernetic control of culture.”
So just who is the anonymous Twitter personality whose message of unfettered, technology-crazed capitalism at all costs has captivated many of Silicon Valley’s most powerful?
Forbes has learned that the Jezos persona is run by a former Google quantum computing engineer named Guillaume Verdon who founded a stealth AI hardware startup Extropic in 2022.
He noted that Jezos doesn’t reflect his IRL personality. “The memetics and the sort-of bombastic personality, it's what gets algorithmically amplified,” he said, but in real life, “I’m just a gentle Canadian.”
15. "VCs can be both frequently wrong, stupid, harmful, or bad, but still be a critical part of pushing innovation forward. Those two buckets of characteristics don’t have to be mutually exclusive.
And one of my favorite champion’s of nuance is Bryce Roberts. For years, he’s pitched a thesis around the “indie startups.” A framework for building companies that are not desperate for endless supplies of capital, but rather with just a bit of capital can become substantial businesses.
This past week he shared a great talk that he gave at a conference, entitled “The Indie Era of Startups.” Rather than spin my own take on this nuanced idea that a lot of companies shouldn’t raise venture capital, I instead just wanted to point you to Bryce’s presentation. Enjoy!"
https://investing1012dot0.substack.com/p/sharing-the-indie-era-of-startups
16. "Entrepreneurs, by their very nature, are eager to build, sell, and make progress. So when you add it all together, it creates an environment where distractions, requests, and feedback are plentiful. One of the most important things an entrepreneur can do is have a strong vision to repel distractions."
https://davidcummings.org/2023/12/02/strong-vision-to-repel-distractions/
17. This is a good discussion on the history and philosophy of doing Venture capital. Also the different styles to VC.
https://www.youtube.com/watch?v=BFgqq-CMgRY
18. "Russia makes more weaponry than its enemies. If nothing is done about its military production, Russia will likely win this war
Now an interesting thing is that the US have every chance to win. That is because the supply chain for precision metalworking equipment is controlled by its allies.
And metalworking is how you make weaponry. No, it's not all about microchips. Production of complex weaponry such as an intercontinental ballistic missile is primarily constrained by the metalworking capacity. And metalworking capacity is mostly precision machining capacity."
https://kamilkazani.substack.com/p/how-to-win-a-war
19. Jay Martin tracks the world through commodities and has a good perspective on global macro.
Net net: be humble, be diversified, learn from history. Personal sovereignty is important and be willing to go abroad and look for opportunity.
https://www.youtube.com/watch?v=jHkVZolnBLs
20. "Four years later, with OpenAI nearing a tender deal valuing it at $86 billion, Khosla Ventures’ stake was worth billions, and the company’s success had cemented Khosla’s personal reputation as one of Silicon Valley’s most far-sighted investors. But with Altman on the outs and employees threatening to quit en masse, all of that wealth was in danger of evaporating.
As we spoke over Zoom, Khosla was lounging on a chaise at a tropical retreat his family was visiting for Thanksgiving. And though he was conceding past errors, he sounded awfully relaxed. Remorse is not his metier.
Among a significant percentage of the most powerful people in tech, Khosla carries the status of a guru or sensei—in an interview, Salesforce CEO Marc Benioff called him “the preeminent venture capitalist of our time.” Many peers see him as uniquely informed, experienced, opinionated and unflappable. “He has a rare combination of being a visionary who possesses deep technical acumen,” said Microsoft co-founder Bill Gates, a longtime friend, in an email.
“He’s got very good tactical and strategic advice and ideas that other people just don’t have,” Altman told me a few days before his yo-yo ouster and reinstatement at OpenAI. “But it’s combined with a level of specific ambition. He pushes founders to take more risk, think bigger, do more.”
Patrick Collison, CEO of online payments giant Stripe, described Khosla as an almost mythical being: “There are these singular characters in Silicon Valley who would feel a bit implausible if you constructed them in a work of fiction, but who turn out to in fact exist. The world is lucky Vinod is one of them.”
A central player in the tech industry for more than 40 years, Khosla is still in the thick of its most important developments, and has mostly triumphed through its ups and downs, booms and busts. Now, at 68, he finds himself opportunely positioned as other major platform shifts get underway—into AI and climate tech.
He began betting on both sectors decades ago, and his enthusiasm and energy for them are as high as ever. By the end of the year he expects to have raised an additional $3 billion from limited partners for a trio of Khosla Ventures funds—the firm’s largest fundraising ever. KV’s aggregate returns to investors have been in the same range as other major VCs since 2009, according to a source familiar with its returns, which is a minor miracle considering how poorly the “cleantech” investment movement did financially in its first decade.
“I know what I love,” he said to me during a pair of conversations this fall stretching over several hours. “And I want to do the same job 25 years from now, health permitting.”
21. "In the short run, let’s say that in two to three years, the Democrats need to win an election. If the threat of four wars on the periphery is removed, which causes energy inflation and bond yields to fall, that helps Newsom win a 2024 election. On the Chinese side, Xi just took over his third term as Party Chairman in 2022.
He needs to show his constituents that by giving him the most power since Chairman Mao, he can bring home the bacon and rejuvenate the economy immediately. Both sides need short-term wins to appease their domestic power bases. Near the end of the decade, all the real issues will resurface, and at that point, a rewrite of the global trade, security, and economic architecture will be unavoidable. This may lead to a hot or cold war between the two global hegemons.
The window to flood China with credit and not suffer negative consequences is now. If Bad Gurl Yellen was running a strong dollar policy, there would be no way for China to turn the credit taps on to the degree required to re-energise the economy. Given these facts, China will go big. Because after election day, regardless of who wins, the gloves come off again, and you can expect a change in trade and monetary policy aimed at restarting the strategic competition between the US and China.
Chinese New Year occurs in mid-February next year. I expect that Xi will provide his comrades a phat 红包 (Hong2Bao1) so they return to their families feeling rich and ready to spend once the New Year holidays finish. As such, I will continue moving money out of T-bills and into crypto because I want to get in now before it becomes apparent through the data that China’s money printer is going brrrrr!"
https://cryptohayes.medium.com/panda-power-64f2bef90327
22. Plenty to learn here re: operating startups, investing and finding undiscovered talent.
https://www.youtube.com/watch?v=S9by0kQ12aI&t=1897s
23. This is a self inflicted disaster like almost everything in the USA and Western Europe. It's like we want to lose. Incompetence, elite capture, greed and arrogance at work.
"As it stands now, the U.S. defense industrial base “does not possess the capacity, capability, responsiveness, or resilience required to satisfy the full range of military production needs at speed and scale,” according to a draft version of the report, obtained by POLITICO.
It notes that America builds the best weapons in the world, but it can’t produce them quickly enough."
https://www.politico.com/news/2023/12/02/draft-pentagon-strategy-china-00129764
24. "He dubbed this nesting instinct “the cockpit effect,” but I prefer thinking of these places as having what I’m going to call a certain hoarder hygge. And in fact super-cluttered, borderline out of control spaces are some of my favorite in all of Japan.
Cramped izakaya, shops jammed with precarious towers of books or toys or even Buddhist altars, the spaces where creatives work, the rooms where collectors nest amid a lifetime of treasures. They’re hypercozy, and I love them.
Japan’s love-hate relationship with clutter arguably dates back centuries (more on that in a moment)."
https://blog.pureinventionbook.com/p/hoarder-hygge-is-the-anti-zen
25. "We don’t want to live in a feudal system where your life path is set when you’re born. But we also don’t want to go so far on the other extreme that we think that the reason we have any inequality is because of prejudice and we need to spend trillions of dollars to equalize outcomes. We tried that. It didn’t work.
We've spent 50 years implementing measures intended to equalize group outcomes, and they haven't equalized. Which, to the leftist activist mindset, is enormously enraging since the obvious explanation is much more pernicious ongoing discrimination than they even imagined. And yet, that’s the exact wrong conclusion to have.
We should try to raise the floor, and we should take a holistic way of doing that, including encouraging everyone to study the habits that successful communities have adopted, instead of just blaming disparities on discrimination. We should also accept that inequality is the natural state of the world, and any program meant to equalize outcomes is dead on arrival.
By accepting that (and studying why) people are different, we can achieve a proper balance between social mobility and hierarchy, between nature and nurture, between what we can change and what we can’t — and deploy our dollars and set our expectations accordingly. By refusing to admit that individual decisions and cultural values make a difference, we’re actually hurting the communities we claim to serve, alienating them from their agency. It might feel kind, but it’s anything but."
https://eriktorenberg.substack.com/p/people-are-different
26. Patent battle between a billionaire and a trillionaire.
https://thehustle.co/will-this-be-the-last-christmas-you-can-get-an-apple-watch/
27. "In other words, something is convincing a lot of Americans that the national economy is a lot worse than their own lived experience would suggest — and causing them to get the facts wrong in the process. That something is what commentators, for lack of a better word, are calling “vibes”.
Where do these negative narratives come from? Brian Beutler and Matt Yglesias both blame negativity bias — the fact that scary narratives get more attention than happy ones — for filling our screens with portents of doom. But of course negativity bias has always existed; it seems to me that this explanation only works if either A) people are consuming more news than before, and/or B) the replacement of traditional media with social media has exacerbated negativity bias. And since the weird break between economic fundamentals and consumer confidence appears to exist only in America, this explanation would require media’s negativity bias to be much less powerful in Europe.
Which leads me to suspect that although negativity bias is certainly a factor, something else is going on here. The fact that the problem is U.S.-specific suggests that either a special feature of American society and politics is at work here, or the American media and social media landscape differs from Europe’s in key ways. Since Europeans have Twitter and Facebook and TikTok too, and their newspapers and TV news shows aren’t that different from ours, I suspect U.S. social and political factors as the cause of the peculiar presence of negative narratives.
In any case, the question is how we commentators can fight the dominance of the vibes — not because we want to convince everyone that the economy is great, but because people need facts if they’re going to know whether the economy is good or bad. But I’m afraid that’s one question I don’t have a good answer to. Perhaps we should just keep relentlessly reminding everyone of the facts, while waiting for the populace to finally realize that economic fundamentals have improved."
https://www.noahpinion.blog/p/vibes-vs-data
28. "From his home base in Antwerp, however, Van den Brande set about building his venture firm. He did so without many conventional advantages. He did not have a proven track record, nor had he apprenticed at a storied fund. Though he had worked as a financial analyst in Boston for a spell, he had few connections to the power brokers of Sand Hill Road, let alone the endowment managers sitting beyond the green-felt lawns and pale stone of the Ivy League. And, as he would have told you himself, he was a bit odd. Van den Brande lacked the easy charm that could beguile entrepreneurs into parting with their equity or seduce limited partners into penning a check.
What he did have was formidable intelligence, jolting directness, ferocious curiosity, and a total allergy to bullshit. These final two traits would prove the making of Van den Brande and his firm.
In the thirteen years since its founding, Van den Brande has built Hummingbird into one of the best-performing venture funds of the past decade. It has delivered three vintages with over 10x net returns. It’s done so without hitting the buzziest startups of the past cycle, instead capitalizing on a roster of relatively under-the-radar giants, including Peak Games, Gram Games, Kraken, BillionToOne, and FPL Technologies. It’s the kind of sustained excellence liable to make marquee fund managers up the dosage of their daily nootropics out of concern.
Hummingbird has achieved this success while staying out of the limelight. Van den Brande and his team have driven such returns by ignoring much of the asset class’s conventional wisdom – and forging an extremely opinionated investing framework. Many venture capitalists emphasize the importance of the entrepreneur to their underwriting; none mean it quite as much as Hummingbird.
For Van den Brande’s firm, the founder is not merely important; they are the only thing that matters. Forget about flocking to a hot new market or playing nice with Sequoia or Benchmark. If you want to deliver consistently superior returns, Hummingbird believes you need to find the most exceptional entrepreneurs on earth – not merely the top 1%, but the top 0.1%.
Finding such outliers is not easy. It also might not look like you’d expect it to. Hummingbird isn’t searching for the slick Stanford MBA, affable Google APM, or winsome McKinsey associate. It cares little for credentials or the experienced pitchman’s smooth patter.
Instead, Van den Brande’s seven-strong roster of investors is pursuing a very specific kind of entrepreneur – someone with unreasonable ambitions, astonishing clock speed, and a frightening hunger that portends a deep, personal unease. Such people do not always make adept students or easy colleagues. But they’re liable to have a handful of bumblebees buried in the freezer. And to have a good reason for it, too, if you care enough to ask."
https://thegeneralist.substack.com/p/hummingbird
29. Absolutely fascinating discussion on human nature and social behavior.
https://www.youtube.com/watch?v=fiUkF5hAnaM&t=926s
30. Some good new data points on what’s happening geopolitically from Zeihan (more in 2nd half, first half you should be familiar with if you track him)
https://www.youtube.com/watch?v=mcZPOuI-vcU
31. "Capital efficiency has existed in roughly every technology wave. Many of the largest, more important companies in the world started off highly capital efficient. Inded, capital efficiency tends to reflect an especially strong business model
In general, if you are not prototyping / proving something works, or scaling something that does work, you should not raise money.
One could argue that while too many SV/NY/cluster-based tech companies raise money, too few outside of major tech clusters do. In many cities and regions people bootstrap for too long, do not scale quickly enough, or do not think about time to winning in a big market. It is possible that non-cluster tech companies in the US end up scaling fast too infrequently.
Occasionally, you also see an SV/NY/cluster-based company that is growing really well and has turned profitable, and then forgoes building against and winning in their category. Sometimes this is the right thing for founders to do, and sometimes it reflects a lack of know-how, ambition, or aggressiveness.
Sometimes, it just shows the founders had a bad experience at a company that scaled for no good reason and ruined the company culture, ability to execute, and products. The wrong lessons may be learned from bad growth and bad execution. It is so rare to actually build something that people care about, that it feels like a shame to not go win when you can - but obviously it is up to each founder and team to chose their own path."
https://blog.eladgil.com/p/capital-efficient-businesses
32. This is a scary reality. We have some real frightening power grid concerns in the USA.
https://www.youtube.com/watch?v=5AEPzm0ptIc
33. I love this guy. The male role model all men should follow: Justin Waller