Marvin’s Best Weekly Reads December 31st, 2023
I want to wish all of you happy holidays in this tumultuous year. I can’t believe so many of you have signed up for my newsletter.
I am honored that you spend some of your precious time with me every week and hope you get as much enjoyment reading this as I do writing these.
Well, starting January 2nd, 2024, instead of 3 posts a week, I will be sending 4 posts a week. You will receive newsletters on tuesday, thursday, saturday and sunday.
Wishing you all a very prosperous and healthy new year in 2024.
Now back to our regular programming! :)
“Clear thinking requires courage rather than intelligence.” —Thomas Szasz
1. Commodities in the emerging markets. It just makes sense.
https://www.youtube.com/watch?v=Kbp4C5sHvKc
2. This is a surprise but I sadly anticipate more stories like this as the sins of 2020 and 2021 investing catch up to all of us. Openview ventures is winding down.
3. "India’s spike is particularly eye-catching. This fits with reports that Western retailers like Wal-Mart are now looking to India as a major source of cheap goods.
The decoupling-doubters seem to be completely ignoring investors’ stampede for the exits. No, the reversal of FDI into China doesn’t necessarily mean that Western economies will become less reliant on Chinese production, but it shows that multinational companies are clearly worried about the risks of staying in China.
And if they’re worried about the risks of staying in China, they’re also going to worry about the risks of sourcing products from Vietnam and Mexico and India if those products are just stuffed with Chinese-made components. And so they will seek to pressure their Vietnamese and Mexican and Indian suppliers to diversify component supply chains out of China as well.
The Vietnamese and Mexican and Indian suppliers will also want to get their component sourcing out of China, as will the Vietnamese and Mexican and Indian governments. They will want to do the component manufacturing themselves, because that will make them a lot more money.
The decoupling-doubters seem to want to jump to the conclusion that diversification has failed. Maybe this is because they had unrealistic expectations of what it would look like, from reading too many economics papers where “decoupling” means instant separation of the world into two disjoint blocs. Or perhaps they see the West’s push for decoupling as a threat to peace and stability in the world, and they want to declare it a failure so we can all go back to the world of 2015. I don’t know.
But either way, rushing to declare decoupling dead simply because India, Vietnam, Mexico, etc. are simply doing in 2023 what China did in 2003 makes no sense. These things are hard, these things take time, but the process is underway."
https://www.noahpinion.blog/p/stop-saying-there-is-no-decoupling
4. Patrick Bet David provides a very sober view of the state of the world. We need more strong people.
https://www.youtube.com/watch?v=IfZR0TiO9zQ
5. Important to understand what’s happening in AI & Nvidia. Worth listening to this interview.
https://www.youtube.com/watch?v=Pkj-BLHs6dE
6. I wish I had more Tony Robbins in my life when I was younger.
Big lesson: never start with the HOW, start with the What & Why.
https://www.youtube.com/watch?v=MOXkko0N3XM&t=3540s
7. This is only fair. This is war.
https://www.youtube.com/watch?v=7XfEAHvM8Ow
8. The OG of venture capital. Lots of wisdom here.
https://www.youtube.com/watch?v=dP0A3B0Wzmc
9. "As I think about how venture firms are structured, very few operate with competitive specialization. In private equity, however, this is much more standard procedure. Given the size of the investments and concentration of the portfolio in PE, there are multiple leads on every company, all with different complementary specialties.
On any given deal there could be someone whose job is to source the deals, another team member’s job is to analyze its finances and diligence the company, another whose job is to be on the board and others who are going to help the company with various levels of operational or industry expertise. This mirrors what we did in consulting. If we were doing a utility M&A consulting assignment, it wasn’t just the partner who found the opportunity — we brought a team together that had utility, M&A and whatever other forms of complementary expertise we needed to make sure the client was wowed by our service.
We all worked the assignment together (contributing where we were best) and share the attribution. Over the last decade, we’ve seen platform strategies evolve that have been able to replicate some of this capability, opening the door for us to think about the best practices of a venture firm in a different way."
https://medium.com/@EqualVentures/competitive-specialization-in-founder-support-3a1b66e15720
10. "Returning to Bryce, who was a founder of an incredibly successful seed-stage firm, OATV. OATV was amongst the earliest seed investment firms and had amazing success with early bets in Foursquare, Fastly and Figma (amongst others). In 2015, the firm made a decided effort to move away from its core model of seed investing and towards a new model, one they would later call Indie VC.
Indie was counter to virtually every rule that LPs put in place, wanting to defy power law and focus on companies capable of generating capital efficient returns. When I asked Bryce, “If it isn’t broken, why fix it?” He replied back, “We all need to remove the notion that what made us successful before will work today (and tomorrow).” This is a powerful thought for an industry that relies some heavily on pattern recognition.
OATV had been an innovator in its own right as one of the first firms to move upstream to write seed stage checks amidst a time period when the costs of starting a company were falling and venture fund sizes were rising (those trends have remained pervasive for the last decade). That playbook, which was highly non-consensus at the time, turned out to work quite well.
As the seed market evolved and became increasingly consensus (arguably too much so) with competition coming in from all sides, Bryce’s belief was that they needed to find new opportunities to invest, leading him to Indie. It would have been easy for OATV to continue on in the fashion that it had been operating and many managers make that choice, given the sunk cost of all the investment that they had in the structures that granted them initial success.
Most rest on their laurels, accumulating fees as their model degrades, as evidenced by the turnover of venture capital firms over the last decades. Bryce recognized this and the need to continually push the envelope to maintain edge in the market."
11. Anduril is the 6th Prime. A leader in Defensetech.
https://www.youtube.com/watch?v=UI4l-o4AcHs
12. "Further complicating matters is a rapidly shrinking vendor base to support defense needs. In 1985, the defense industry workforce was 3 million strong; today, that number is just 1.1 million. Between 2016 and 2022, the number of businesses supporting the defense sector dropped by 22%, including 43% of the small business that generally provided niche—but essential—capabilities.
Where does that leave us? Vulnerable. It doesn’t matter whether it’s a brief battle over the freedom of Taiwan or a major European war. Much of our existing stocks are depleted to levels that could be exhausted with a week of intense fighting, and we’re incapable of sustaining any fight long enough to allow for the lead time required to ramp up industrial production to support a long war.
In an era of great power competition, we cannot wait for someone else to awaken the sleeping giant. Our own complacency has allowed the arsenal of democracy to sleep long enough; it’s past time to stop hitting the snooze button."
13. An excellent episode this week. All in Podcast.
https://www.youtube.com/watch?v=IeKUcpU5-Xk
14. This is excellent, love this show and it's always a good discussion re: what’s happening in Silicon Valley. It's the less obnoxious version of All in Podcast.
https://www.youtube.com/watch?v=PTUhw-bnl7s
15. "The Eastern European venture landscape is undergoing a deep transformation. It is becoming part of the European tech scene. That means that your competition is not only the next fund located in Bucharest, or in Sofia.
Your competition is every seed fund in Berlin or London, and you have to be relevant in comparison to them. And if all you have is leveraging your personal relationships on the ground, soon that may no longer be enough. However, we’ve been building infrastructure and tools internally and I think we’re on the right track."
https://www.verve.vc/blog/interview-bogdan-iordache/
16. This is a depressing but a sober view of the present geo-political situation. The West is in big trouble because we are stupid, weak and complacent. All self-inflicted.
https://www.youtube.com/watch?v=_DfTlPY_UQQ
17. "Every generation inherits the assets and liabilities of previous generations. However, we are maturing an immature generation less capable of dealing with some of the real challenges, and opportunities, we’re leaving them.
Instead, we shield them from dangers that likely make them stronger — rejection, a B-, hangovers, the unknown — while letting technology exploit their fears of real or perceived dangers. My mom worried I’d get into too much trouble. Now, I worry my kids won’t get into enough.
The decline in youth drinking is not just about drinking. It’s about a generation that fears the consequences of the slightest slip of impulse control — which could be a spark in a world with a permanent gas leak (social media) ready to ignite a firestorm of shame.
The decline in alcohol consumption has many positives. But it also means a decline in the rites of passage and communal bonding that alcohol historically facilitated."
https://www.profgalloway.com/firewater/
18. "My recommendation for entrepreneurs looking for help and expertise in their business is not to feel like they have to raise venture capital to find people who can help. The great thing about the startup community and the size and scale of the startup industry is that we now have experts across the board. Founders would do well to build out their own team of experts."
https://davidcummings.org/2023/12/09/expertise-is-plentiful-outside-venture-firms/
19. "Rotman goes into other opportune areas. Josh Wolfe acknowledges that a lot of new firms will form. The way I continue to frame the core takeaway of the rapidly changing forces in venture capital revolve around this idea of requiring every venture fund to answer the question: "why do you deserve to exist?"
In the ZIRP era, the answer could be "because there's money to spend." But not so anymore."
https://investing1012dot0.substack.com/p/revisiting-the-death-of-a-venture
20. Lots of good tips here for building massive companies. Build a cult. Worth listening.
https://www.youtube.com/watch?v=FpD8NQSFIYE&t=38s
21. 996. It's how I grew my career, still do this. Startups are hard so they require hard work.
https://www.youtube.com/watch?v=flf81mI5yEU
22. This is so instructive. How to set up a Personal Holding Co and some good structures and lessons.
https://www.youtube.com/watch?v=9IyYN3_O80Q
23. "So much of life-long health, Emanuel says, also comes down to behaviors like eating a nutritious diet and getting enough sleep, exercise, and social support—things that are simple on their faces, but in practice far more achievable for people with leisure time and money.
As he sees it, promoting and enabling those habits for everyone, and making better use of medical treatments that are already available, is a more urgent priority than chasing the “pipe dream” of a future in which aging is optional."
https://time.com/6341027/what-is-healthspan-vs-lifespan/
24. This sounds about right (disagree on some numbers but overall YES directionally right). It's an amazing time to invest in startups and build startups despite the downturn.
https://calacanis.substack.com/p/the-greatest-moment-to-start-a-company
25. "Last year, droves of knowledge workers attended ominous all-hands meetings where executives challenged them to “do more with less.” In the past, mandates like this have rightly elicited eye rolls. However, as of 2023, this ask seems less unreasonable.
Today, every knowledge worker can access powerful AI tools that can realistically increase output without requiring additional input. With profitability goals motivating companies to cut costs and AI enabling greater leverage, conditions seem ripe for a profound productivity boom. While the full impact will take years to materialize, 2024 may showcase the first success stories."
https://junglegym.substack.com/p/6-trends-that-will-shape-our-careers
26. Super interesting perspective on geopolitics and the economic future of China and the West. Live players are needed to move the world forward.
https://www.youtube.com/watch?v=wLwppfZH0R0
27. "I've consciously chosen the "leave money on the table option" over and over again and I’ve tried to do this from the beginning. My biggest reason was that I wanted to see what happened. True fuck around and find out energy.
Most of the time? It felt silly. Like I was wasting my talent, lighting the ten years of intense consulting and business school training on fire. But also over the last 6-7 years, it's sort of worked. My days are nice. I've spent 98% of my days on my terms and I’ve felt better about the person I’ve become.
But if I laid out my decision to people in my shoes now it would be an active choice to give up $1M of incremental income that I easily would have earned if I had stayed on my former path. While I think I still could have turned it down, I realize its damn hard for most people.
I am lucky. I found work I like doing, writing, and want to keep doing for another 10+ years. It always seems like there are things I can improve and my curiosity never seems to fade. On top of that, I've slowly built solid relationships by taking advantage of not having to ask people for help."
https://newsletter.pathlesspath.com/p/leaving-money-on-the-table-250
28. "And then, often before the sun has even risen, someone arrives to make him do what Cook describes as “things I would prefer not to do, that I could probably convince myself not to do.” (Weight training, mostly.) And then he heads here, to the corporate headquarters of the company Cook has led since 2011.
He is not a leader who is drawn to crisis or conflict, two climates his predecessor, Steve Jobs, seemed to at times thrive in. “I try not to let the urgent take over the day,” Cook says. Regular meetings, different standing engagements with different parts of the company. He likes to ask questions.
“I’m curious, and I’m curious about how things work,” he says. He does this not to intimidate, though there is perhaps a standard, an expectation of those working for him, lurking there as well: “If something’s really shallow, you find that people can’t explain it very well.” Like Jobs once did, he sometimes takes meetings on the move, walking around the campus. Most days, he leaves the office at 6:30 or 7 p.m.
The overall sensation he attempts to impart is one of normalcy, of proportion, despite the fact that most days, Apple, which employs about 165,000 people, is the most valuable company in the world. (As of this writing, it’s worth more than $2 trillion; at one moment last year, that number was $3 trillion, a figure roughly equal to the gross domestic product of the United Kingdom.)"
https://www.gq.com/story/tim-cook-global-creativity-awards-cover-2023
29. "So thanks to subsidies, supply chain advantages, a technological shift, and macroeconomics, Europe is getting a ton of cheap Chinese-made EVs dumped on their markets. And Europe’s leaders are mad about this, calling for investigations into Chinese EV subsidies. That could end in tariffs against Chinese-made cars.
This reaction is hardly surprising, given the importance of the auto industry to the European economy. In a world where electronics manufacturing has clustered in Asia and software has clustered in the U.S., auto manufacturing was one major sector where Europe still stood relatively strong. It’s a mature industry, so Europe’s fetish for regulating new technologies was less likely to damage it.
It’s a heavy industry, so the forces of agglomeration are less powerful than for electronics, where parts can be shipped cheaply; auto production tends to be distributed throughout the world, with most cars produced close to where they’re sold, which allowed Europe to make most of its own cars even as its economy lost competitiveness and dynamism overall. And Germany, in particular, has a thriving cluster of auto engineering talent that allows them to make really good cars (or at least, really good internal combustion cars).
Losing the car industry could thus push Europe further along the path to deindustrialization. Cheap Chinese EVs are a boon to European consumers, and they help speed the green transition and reduce carbon emissions. But the competition also threatens to put a bunch of European workers out of a job — 7% of the region’s workforce work in the automotive sector.
A domestic auto industry gives Europe much more ability to repurpose production lines and ramp up defense production when needed. If the auto industry flees to China, Europe will be that much more vulnerable to Russia. In fact, this is one reason the auto industry is so globally distributed today; during and after World War 2, lots of countries decided they needed car industries in order to maintain strong militaries."
https://www.noahpinion.blog/p/car-wars
30. This is incredibly insightful. The American system rewards perseverance so those with grit and who don't quit or conform actually do the best.
https://www.youtube.com/watch?v=NUFrzDqnRys
31. Love the intensity here. Traba the next trillion dollar company. An American startup with 996 in their culture. SO unusual but also what is needed.
https://www.youtube.com/watch?v=qHDAKevRrvw
32. Learning from sales at Snowflakes.
https://www.youtube.com/watch?v=i9SvTjMajuo
33. "The imposition of sweeping new semiconductor export controls last October hit China’s tech sector hard. However, the blockade is arguably backfiring as the resultant Chinese investment in domestic capabilities is starting to show results.
“The problem is this was a tool designed for the Soviet Union in the 1980s,” Lewis said. “China is not the Soviet Union. The Soviets were sluggish. They didn’t have a tech base.”
Lewis suggests three modifications to the U.S. approach:
First, move faster to implement the CHIPS Act, which is meant to bring the manufacturing of advanced semiconductors to the U.S.
Also, let American companies sell advanced chips to China for civilian purposes. “We’re not going to stop the Chinese, but we can at least make money off of them,” Lewis argues.
And rather than focus on keeping advanced chips out of China, focus instead on tightening restrictions on the manufacturing equipment used to produce the most advanced chips, a more targeted goal that could still allow the U.S. and its allies to retain their edge in cutting-edge computing components."
34. This was such an impressive story. Talk about grit and grind, coming from nowhere. One of the best new Solo GPs around.
https://www.youtube.com/watch?v=OPktwaznNAQ
35. I don't agree with this view but it's a sober perspective & prediction on the state of the Russian Invasion of Ukraine. I pray he is wrong.
All I know is that the West has been shown to be unreliable, weak and lacking will to help Ukraine win. I'm ashamed and fear Ukraine will pay for this weakness. And I curse Russia for their barbarism.
I will spend much of my time after the war helping to rebuild Ukraine and their tech scene.
https://mercurial.substack.com/p/ukraine-endgame
36. "Previously we noted that the USA is a culture of Transactional Relationships with a growing rich and poor divide. We stand by that claim and it helps explain a ton of the trends: 1) sugar relationships, 2) obsession with overnight success - going viral or 10x meme coins, 3) spread of stock returns - magnificent 7 versus S&P 500 and 4) gambling/sports betting.
As a quick recap our expectation is a lot of importation of 3rd world culture into the USA this includes and is not limited to:
-Paid sex work from OnlyFans to Sugar relationships to outright transactions
-More and more drug use as younger cohorts can’t afford the alcohol binges
-Immersive digital experience - more time spent online vs. in the real world
-Decline in birth rates as both men and women have outlandish expectations
-Scams being seen as real work since “everyone is doing it” - low trust
-Increase in gambling addiction problems
-Increase in loneliness and mental health issues particularly age 40s
If it were possible to buy a stock or coin that was long all of these trends? We’d put our net worth into it. While certain segments will grow faster than others depending on the year, it’s the direction of the USA.
We’re a culture of extremes and the more extreme you are = more attention and money. This means every year people have to do crazier and crazier things to get into the limelight.
Extreme Political Takes Third: If you think we’re here, we haven’t seen anything yet. Just look at Argentina as a good example of what is to come. You’ll see deep left and deep right policies gain the most traction. We saw a glimpse of this during the Bernie Sanders hype and we will undoubtedly see some extreme Right-Winged takes shortly (to balance out the political circus)."