Marvin’s Best Weekly Reads February 25th, 2024
“The secret to happiness is freedom…and the secret to freedom is courage.” – Thucydides
"If there were a “golden” rule of subscription businesses, it would be that your customer won’t use your product longer than their problem exists.
The longer they experience the problem, the longer they use your product.
In the world of consumer products, there are only a handful of things people will do for more than a year.
Things like eating healthy, staying in shape, learning German, meditating, etc., are all things that 90% of people will either accomplish or give up on within 3–9 months.
Things that will happen for more than a year: rent a home, pay for electricity, watch something entertaining at night, etc. These are all things that people need to do for a long time.
The same logic applies to B2B companies; they need cloud hosting for their product a lot longer than they need a place to hold drinks for the team."
https://medium.com/entrepreneur-s-handbook/fighting-churn-101-the-tactics-that-work-72f8b1198f40
2. “Dark Forest” behavior isn’t typical in the real world
In fact, we actually do occasionally see human societies behaving like the aliens in Liu’s books. In actual dark forests, hunter-gatherers would often attack strangers they encountered. And in old Oceania, island groups would sometimes invade and massacre other island groups. This was often done out of fear of attack and/or desire for resources, as Liu postulates. And of course there are plenty of historical examples from the colonization of the Americas and Oceania, as well as steppe nomad imperialism.
But overall, relations between terrestrial nations and peoples are usually very non-genocidal.
Trade and cultural exchange are the norm in the modern day.
This is not because strong nations lack the power to wipe out weak ones — it would be easy for Russia or China or the U.S. to annihilate Kyrgyzstan or Mongolia or Honduras, especially if we made an agreement that we’d all be better off destroying those smaller countries before they can grow big or advanced enough to threaten us.
One very important reason we don’t do this is partly because it would rightly be seen both within and outside of the attacking nation(s) as a terrible crime, increasing unrest and international hostility. But it’s also partly because we have more to gain by trading with smaller countries than by annihilating them."
https://www.noahpinion.blog/p/the-dark-forest-hypothesis-is-absurd
3. "Enemies are swarming around the world… including passionate ignoramuses within the US who seem hellbent on making the country weaker.
Wealthy activists like George Soros, for example, fund the political campaigns of ‘progressive prosecutors’ who release criminals onto the streets and refuse to prosecute crimes.
Combined with the geniuses in many city councils across the country who have de-funded their police departments and decriminalized shoplifting, the unsurprising result has been an alarming rise in crime.
Meanwhile, the people running the federal government roll out the red carpet for illegal migrants at the southern border, creating total chaos in most major cities.
They constantly issue idiotic regulations and legislation which make life more cumbersome and expensive for average Americans and small businesses– like the Labor Department’s recent 800-page proposal to make sure that interns can use a toilet which conforms to their gender identity.
Enemies are at the gate. And in some instances, including through repeated cyberattacks and other incursions, enemies have already breached the gate.
Yet the people in charge have weakened the military between their vaccine mandates, the humiliation of Afghanistan, and endless diversity & inclusion efforts. Recruiting and mission readiness are now both at historic lows.
They weaponize the justice system against their opponents and soften it for their friends and family. Rule of law has become a total joke, especially now that even high-ranking judges have become social activists whose rulings reflect their woke fanaticism rather than Constitutional law.
They suppress intellectual dissent and denounce those who disagree with them as “cave men”, “white supremacists”, “threats to democracy”, or “science deniers”. And their propaganda machine masquerading as mainstream journalism constantly feeds us these lies with a straight face.
They refuse to even acknowledge the looming fiscal crises they’ve engineered through decades of deficit spending and expensive entitlement programs. The country is only a few years from a financial cliff, yet they’re not even talking about it.
And to top it all off, the guy in charge appears to have lost his mind… just like King George III.
These are the circumstances of America today. And in many respects, they are similar to Britain in the early 1800s.
Could there be a similar, miraculous turnaround for the US? Is it possible that, ten years from now, America is firmly the world’s superpower with a booming economy and negligible debt burden?
Yes, absolutely. There is still a very narrow path forward."
https://www.sovereignman.com/trends/so-youre-telling-me-theres-a-chance-2-148665/
4. Learning from Silicon Valley legend: Doug Leone of Sequoia Capital.
https://www.youtube.com/watch?v=XH70GfL2UwM
5. He is a wise man. I do like listening to Justin Waller: the blue collar baller.
https://www.youtube.com/watch?v=cBakneN4yxA
6. "Endless cubicle farms were never the end state of anything, and all this can be repurposed for better use: shopping, socialization, recreation, residential and exciting/novel concepts we’ve not even considered yet. The future here is something to look forward to: going to city centers purely to do something alone you can do anywhere makes no logical sense. This was all inevitable and good, unless you wanted humans to remain enslaved and great real estate locations to be stuck in 1950s-era industrial economy use.
So basically, TL;DR: you will make your employees hate their lives, make less money and be less efficient by electing to assert authoritarian control over their movements and do the same work in a different arbitrary building every day. And I am not being hyperbolic here, I have heard stories from friends in legacy sectors whose teams have started location-tracking employees during the day. It’s straight out of a dystopian panopticon science fiction novel. I can’t imagine anyone competent staying at such firms very long.
Absolute top companies like like NVIDIA worth well >$1 trillion are running remote operations for their teams, so there’s really no excuse that “this is just for smaller shops.”
https://www.hottakes.space/p/remote-work-won-dont-let-anyone-gaslight
7. "Whatever happens now this war remains a terrible blunder which can never deliver Putin a satisfactory outcome. It is not only that Ukraine will not stop fighting even if US support tails off, or that a Trump victory might not deliver the country to Russia, but that whatever happens now Russia’s relationship with the Ukrainian people is going to be deeply antagonistic and no amount of brute force will change that.
At some point Ukraine needs to persuade the Kremlin that the only hope of restoring equanimity to the relationship is for Russian troops to be withdrawn from Ukrainian territory. Meanwhile it is deeply unsatisfactory to be in a position where Ukraine can only mark time, and take the pain, waiting for more favourable turn in US politics – and to have devise new strategies in case it never does."
https://samf.substack.com/p/ukraine-through-the-gloom
8. MANG (MSFT, AMZ, NVC, GOOG) is here: big implications for the startup ecosystem.
9. How the heck did we allow this to happen.
"The United States has relied almost entirely on China — and to a lesser extent Russia — in recent years to procure a critical mineral that is vital to producing ammunition.
The mineral antimony is critical to the defense-industrial supply chain and is needed to produce everything from armor-piercing bullets and explosives to nuclear weapons as well as sundry other military equipment, such as night vision goggles.
After Japan cut off the U.S. supply of antimony from China during World War II, the United States began procuring the mineral from ore in an Idaho goldmine. However, that mine ceased production in 1997.
“There is no domestic mine for antimony,” according to a 2020 report from the U.S. Geological Survey, a government agency. “China is the largest producer of mined and refined antimony and a major source of imports for the United States.”
10. Interesting discussion on building a new VC firm.
https://www.youtube.com/watch?v=47THC7LwgVM
11. This is the most important thing VCs should be investing in right now. I'm really proud that Firestorm Labs, Buntar & Hefring Marine fall into this camp.
"But I also believe that there will be a crop of new companies that challenge incumbents head-on and win, capturing large markets at high margins in the process. I’ve started calling them Techno-Industrials.
Techno-Industrials use technology to build atoms-based products with structurally superior unit economics with the ultimate goal of winning on cost in large existing markets, or expanding or creating new markets where there is pent-up demand.
They can leverage their structurally superior unit economics in the form of lower prices to win market share, higher gross margins, or both.
Less fancily, they’ll use new technology, processes, or approaches to make physical things that customers want more cheaply than existing companies can, in a way that existing companies can’t match. Because they can manufacture more cheaply, they can either lower their prices to steal market share from incumbents or capture more gross margin. In some cases, they’ll have enough room to do both.
The category alternately called hard tech / deep tech / frontier tech / atoms-based / American Dynamism is on fire. The things that these companies are able to do and build boggle the mind.
It takes a new, old way of thinking about tech companies to understand which might break through to become very large standable businesses, and this is my first entry in what I suspect will be an ongoing attempt to put a framework around it.
While software has been all about swamping upfront fixed costs with high gross margins as revenue grows, I think the defining characteristic of successful Techno-Industrials will be whether they have a structural cost advantage.
That might come from an in-house invention or the integration of a number of new capabilities in novel and defensible ways. In either case, if Techno-Industrials are to succeed, it will be because they leverage technology to do what technology is supposed to do: give people more and better for less.
We covered three examples – Anduril, Solugen, and Monumental Labs – taking three different approaches towards that end. Beautifully, there is no playbook written yet, and I suspect each Techno-Industrial will forge a different path."
https://www.notboring.co/p/the-techno-industrial-revolution
12. "The Chinese who rùn to the American border are still a tiny set of the people who leave. Most emigrés are departing through legal means. People who can find a way to go to Europe or an Anglophone country would do so, but most are going, as best as I can tell, to three Asian countries. Those who have ambition and entrepreneurial energy are going to Singapore. Those who have money and means are going to Japan. And those who have none of these things — the slackers, the free spirits, kids who want to chill — are hanging out in Thailand.
Most of the young Chinese I chatted with are in their early 20s. Visitors to Thailand are trying to catch up on the fun they lost under three years of zero-Covid. Those who have made Chiang Mai their new home have complex reasons for staying. They told me that they’ve felt a quiet shattering of their worldview over the past few years.
These are youths who grew up in bigger cities and attended good universities, endowing them with certain expectations: that they could pursue meaningful careers, that society would gain greater political freedoms, and that China would become more integrated with the rest of the world. These hopes have curdled. Their jobs are either too stressful or too menial, political restrictions on free expression have ramped up over the last decade, and China’s popularity has plunged in developed countries.
So they’ve rùn. One trigger for departure were the white-paper protests, the multi-city demonstrations at the end of 2022 in which young people not only demanded an end to zero-Covid, but also political reform. Several of the Chiang Mai residents participated in the protests in Shanghai or Beijing or they have friends who had been arrested. Nearly everyone feels alienated by the pressures of modern China. A few lost their jobs in Beijing’s crackdown on online tutoring. Several have worked in domestic Chinese media, seriously disgruntled that the censors make it difficult to publish ambitious stories.
People complain of being treated like chess pieces by top leader Xi Jinping, who is exhorting the men to work for national greatness and for the women to bear their children.
This middle class, however, is feeling less sure these days, as the economy keeps getting whacked. The trouble with Xi Jinping is that he is 60 percent correct on all the problems he sees, while his government’s brute force solutions reliably worsen thing. Are housing developers taking on too much debt? Yes, but driving many of them to default and triggering a collapse in the confidence of homebuyers hasn’t improved matters. Does big tech have too much power? Fine, but taking the scalps of entrepreneurs and stomping out their businesses isn’t boosting confidence. Does the government need to rein in official corruption? Definitely, but terrorizing the bureaucracy has also made the policymaking apparatus more paralyzed and risk averse. It’s starting to feel like the only thing scarier than China’s problems are Beijing’s solutions."
https://danwang.co/2023-letter/
13. "People are looking for explanations and certainty in these troubled economic times. So they’re turning to anything and everything that will give them meaning. People will continue “finding God” and become more Spiritual.
These won’t just be the run of the mill religions and cults either. They’re going to become stranger. Social media has created self perpetuating loops of content and reinforcement that will radicalize more and more individuals to more radical and ridiculous ideas. Flat Earthers, Wiccans and the Hippies of yesteryear will be tame compared to what is coming."
https://mercurial.substack.com/p/world-business-outlook-2024
14. "Meanwhile, Brex is cutting 282 jobs, or about one-fifth of its workforce.
In the email to staff, seen by The Information, co-CEO Pedro Franceschi acknowledged that “we grew our org too quickly, making it harder to move at the speed we once did.” He said Brex management “decided to take a hard look at our current structure, and reduce the number of layers between leaders and the actual work that affects customers.”
Brex, which issues credit cards and manages cash for businesses, was burning an average of about $17 million a month in cash in the fourth quarter, The Information reported earlier Tuesday, based on data given to employees at an all-hands meeting earlier this month."
https://www.theinformation.com/articles/brex-cuts-20-of-staff-and-shakes-up-senior-management
15. Lots of great nuggets on what’s happening in venture capital. Good optimistic signs for the industry over the next 2-3 years.
https://www.youtube.com/watch?v=_qsm24HFHq8
16. A crash course on building effective sales organizations for SaaS.
https://www.youtube.com/watch?v=dZt0U4xQx6c
17. "I predict that we will witness just how difficult it is for the mighty Red, White, and Blue fist to swat a drone swarm of flies. For shipping companies to feel confident sailing through the Red Sea again, the US Navy must be perfect in every engagement. Every single drone must be neutralised. Because even one direct hit with a drone’s payload could incapacitate a commercial vessel. Additionally, because the US is now at war with the Yemen Houthis, shipping insurance premiums will skyrocket, making it even more uneconomical to sail through the Red Sea.
Due to weather and geopolitics, higher shipping costs could cause a surge in inflation in the third and fourth quarter of this year. As Powell is undoubtedly aware of these issues, he will do everything he can to talk a big game about rate cuts without having to actually cut them. What might be a mild increase in the rate of inflation due to increased shipping costs could be supercharged by rate cuts and the resumption of QE. The market doesn’t appreciate this fact yet, but Bitcoin does.
The only thing that trumps fighting inflation is a financial crisis. That is why, to get the cuts, QT taper, and the possible resumption of QE the market believes is already in the bag come March, we first need a few banks to fail when the BTFP is not renewed.
Tactical Trading
A 30% correction from the ETF approval high of $48,000 is $33,600. Therefore, I believe Bitcoin forms support between $30,0000 to $35,000."
https://cryptohayes.substack.com/p/yellen-or-talkin
18. An excellent episode on what’s happening at the edge of cultural and tech biz.
https://www.youtube.com/watch?v=-sjzS4KGJwk&t=1372s
19. America is a country of laws and lawyers, China is a country of engineers and technocrats.
https://www.youtube.com/watch?v=4h0frLCJO5U
20. Excellent discussion on Silicon Valley news.
https://www.youtube.com/watch?v=zLn_N3wSs5w
21. Two of the smartest guys in Silicon Valley. This is a must listen.
https://www.youtube.com/watch?v=Wu_LF-VoB94
22. "As an entrepreneur, it’s crucial to find that balance for your organization—setting ambitious goals without making them so lofty that they become unrealistic and harm morale. It’s a delicate balance with no straightforward solution. Entrepreneurs would do well to find their own approach to this and be intentional about how they lead their organizations in respect to goal setting."
https://davidcummings.org/2024/01/27/unrealistic-goals-can-hurt-startup-morale/
23. "Israel’s moral losses, while significant, will be overshadowed by the damage done to Pax Americana and those who benefit from it over the longer term.
--If the US diminishes the ICJ and international rule of law, as it is currently doing to protect Israel, it will damage the system and its moral standing globally. It will also, due to the networked-enabled shift underway in younger demographics (55% of Americans between 18-29 believe that Israel is committing genocide), deeply damage its legitimacy (this loss in legitimacy is similar to what happened on the networked right with WMDs, the financial crisis, and the COVID response). Losses in legitimacy create distrust in politics, government institutions, and loyalty to the nation (which impacts everything from military service to siding with it in disputes with tribal identities).
--This loss will come on the heels of other significant moral losses suffered over the last few years. For example, the withdrawal from Afghanistan, which became an evacuation, generated distrust in its military competence. In turn, the war in Ukraine demonstrated a selfish desire to sacrifice Ukraine to damage Russia and its unreliability as an ally when it slowed support for the war.
--Combined, the rapid diminishment of the “international rule of law” and US moral standing, both cornerstones of Pax Americana, has set the stage for global chaos as the myriad tensions, hatreds, and ambitions that were dampened by this system are unleashed — from opportunistic Houthi style drone blockades (in part enabled by those opposed to the US system) to major nation-states taking advantage of the chaos to realize long term ambitions (Taiwan)"
https://johnrobb.substack.com/p/losing-the-moral-war
24. Inside view on Dan Koe's brain. Love his content.
https://www.youtube.com/watch?v=Whzy4p7Mes8
25. This looks amazing. Monkey Man!
https://www.youtube.com/watch?v=P2Kpfmr1W20
26. "there is “clearly something different going on than what has been [happening] during the post-Cold War era,” but cautioned that it’s too soon to say whether it’s a “long-term or a short-term reversal.”
Goldstein pointed out that even as new conflicts have emerged in Ukraine, Gaza, and elsewhere, a number of long-running wars have also come to an end. The US withdrew from Afghanistan, ending a two-decade war, in 2021. The conflict in Syria has gone from a raging inferno to a low boil, as the Bashar al-Assad regime has consolidated control over much of the country and has normalized relations with many of the regional powers that were backing armed efforts to overthrow him just a few years ago.
An uneasy ceasefire has been held in Yemen for the last two years, a welcome respite in a conflict that has directly killed more than 150,000 as well as far more through disease and malnutrition, although it remains to be seen how long that can last given the Houthis’ recent activities and the international coalition assembled to stop them.
None of the outcomes of these wars are particularly welcome for the United States — or for most of the people in those countries, given which groups and authoritarians ended up in power — but they do show that seemingly intractable conflicts can end even as new ones emerge."
https://www.vox.com/world-politics/2024/1/25/24049551/war-increasing-ukraine-gaza-sudan-ethiopia
27. “The threat is not just coming from guns, artillery, rockets, missiles, warships,” General Sun said. “They’re trying to influence our minds as well.”
What Taiwan needs is more practical help — anti-ship missiles, military training, coordination with allies, better cyberdefenses. Meanwhile, the United States needs to boost the capacity of industry to produce munitions rapidly in a crisis.
The Biden administration has worked very effectively with Japan, South Korea, Australia and the Philippines to prepare for joint action to constrain China. That enhances deterrence. Washington could also do more to help Taiwan cultivate cyberwarfare: If the grid goes out in Taipei, Shanghai should lose power, too. If Taipei’s internet cables are cut, then China’s great firewall should cave so ordinary Chinese are able to read about their leaders’ corruption.
Maybe the best recommendation I heard came from Mark Liu, the chairman of Taiwan Semiconductor Manufacturing Company. He offered this useful advice for Americans aiming to help Taiwan’s security: “Do more. Talk less.”
That advice might have helped the major powers in August 1914 avoid a cataclysmic and unnecessary war. It remains sound counsel today."
https://www.nytimes.com/2024/01/27/opinion/china-taiwan-war.html
28. A great history of the internet and why crypto still makes sense. Chris Dixon is one of the smartest people in tech.
https://www.youtube.com/watch?v=_nIQztk5KWY
29. "Paradoxically, death can even make wealth terrifying. That delightful dream of being on top of the world will end all too soon. I can think of a few games the wealthy play to avoid this terror:
The game of hope: outwit death by betting on science. Let the protocols of longevity and Dr. Andrew Huberman become the saviors of your wilting avatar. The sci-fi series Altered Carbon plays with this idea: people switch between bodies like suits and those who can afford it can practically live forever. Not only can they compound their wealth forever, but their children plot to murder them because immortality ruins the natural rhythm of succession.
The game of distraction: go all in on hedonism, consumption, and status games. Buy another boat, throw a bigger party in an even bigger house. Escape the haunting inevitable until you slip away in your sleep — hopefully before waking up to the hangover of a meaningless nightmare.
A special case of distraction is the game of more, also known as ‘number go up’. Almost by definition, the self-made wealthy are very good at this (leaving aside the merely lucky). And even though the marginal value of earning another dollar declines to zero, the game remains an interesting distraction. It doesn’t fill the void and occasionally might feel like an addiction. But it’s still better than contemplating death. Might as well keep playing.
Finally, there are secular games of legacy like children, charity, and teaching."
https://alchemy.substack.com/p/in-search-of-ozymandias
30. This is worth watching. It starts off a bit gloomy but there is much to learn. What we can learn from the rise and fall of empires.
https://www.youtube.com/watch?v=IzQlLZK8se4
31. Found myself nodding my head a lot here. Don't always agree with their views but they are patriots in their own way.
Definitely agree with their perspective as startup investors and being bullish on India and Internet values.
https://www.youtube.com/watch?v=Ny93ZjlR93g
32. "In a sense, consumer products now resemble entertainment, with users regularly wanting to try out the latest thing and then quickly moving on. I’ve been investing in consumer startups since 2016, and in that time I’ve amassed screens filled with social apps on my iPhone—BeReal, Poparazzi, Fam, and Dispo, to name a few. All were once popular but now are mostly forgotten.
As apps predicated on smaller use cases gain traction and start to scale, they can actually erode their core value proposition of intimacy, creating an opportunity for still-newer newcomers to take their place. Furthermore, the novelty of a new, narrow social experience quickly wears off before the app can iterate and expand, making it difficult to compete against incumbents that offer many more options and formats for social interaction.
In light of this, I sense that an alternative path to success in the realm of consumer apps lies beyond the well-worn model of building a “kitchen sink” social giant. An alternative, less obvious, and likely more fun route is to create a series of smaller, transient hits. Rather than building something that can one day scale to a billion users, the goal is to launch a series of quick-hit apps that capture attention fleetingly.
For founders, the benefit of following the venture studio strategy means more optionality than betting on one idea from the get-go. Creating a succession of apps still leaves open the option of building a big consumer app: if one of the bets takes off, the founder has the freedom to run with it. Beyond that, it’s a structure that can also offer more autonomy and creativity. Since the goal isn’t to build a monolithic giant that has mass appeal, each of the ideas can be more offbeat, interesting, and niche.
In a landscape now dominated by scaled incumbents, a viable alternate route for consumer builders is to embrace the dynamics of fleeting attention, build for transience and niche use cases, and—uniquely enabled by crypto—deploy tokens for cross-promotion and growth."
https://www.lisnewsletter.com/p/multi-hit-wonders
33. Mike Thurston breaks down his path to building a successful solopreneur life.
https://www.youtube.com/watch?v=kxTjNaQYzFA
34. "Meanwhile, gaming companies In North America and Europe continue to undergo layoffs, an unfortunate trend that seems set to continue in 2024 and will inevitably result in the delay or outright cancellation of many projects. While Western markets may not face the same regulatory challenges as their Chinese counterparts, they do still face uncertainty, as evidenced by the Microsoft-Activision antitrust saga from last year, the courtroom battles over Apple’s mobile stranglehold, and the evolving debates over distribution of web3- and AI-enabled games.
These are broad generalizations, but I mention them only in contrast to Japanese publishers, which appear to have a more favorable path to growth in 2024. Japan features a number of companies well-positioned for a strong year ahead, and has been more welcoming to web3 and AI. Should we see an unexpected breakout driven by these technologies, Japanese publishers may be best positioned to take advantage of them."