Marvin’s Best Weekly Reads January 14th, 2024
“One part at a time, one day at a time, we can accomplish any goal we set for ourselves.” — Karen Casey
"With all these details working in its favor, it’s possible that El Segundo’s hardware scene was always inevitable. But my sense is SpaceX demonstrating what was possible, amidst all that space and talent, was like a lightning strike in the dry, California foothills. And that fire has been burning now for years.
Today there’s Anduril, an hour south, and more recently Varda, Radiant Nuclear, Impulse Space, Hadrian, Freeform Future, Senra and HGen — just a handful of the local companies Founders Fund has invested in since SpaceX. The Boring Company and Panthalassa both started off in LA.
Peeking out of corners all over town, a few minutes’ drive from point to point, robotic pizza trucks weave among electric drivetrains, automated casting foundries, small launch vehicles, rocket engines for carbon sequestration, cloud-seeding drones, and containerized nukes built in a glorified garage.
Even just in recent memory we’ve seen hype cycles fully play out, from social media and SaaS to AI and (a few times now) crypto. There was and remains exciting promise in all of these spaces, but too much hype means too many speculative investors and too much capital, which leads to more companies than can be sustained by the talent pool or customer base. In a dynamic like this, reality tends to fall short of expectations, pain follows, and important work can die. I don’t want this for Gundo, because, frankly, this is the only place this work is being done, and nowhere else for people building here to go.
Fortunately, there is a silver lining. Hardware doesn’t work like social media, where the winner takes all and colocation becomes memetic. A hardware ecosystem’s geographic network effects are positive sum. In other words, if hype inspires new companies who draw talent and enhance local capabilities — in addition to drawing capital and generating great tweets — then it can still work in our favor."
https://www.piratewires.com/p/thank-god-for-el-segundo
2. Lots of lessons from history and human civilization goes back further than we think. LONG History.
https://www.youtube.com/watch?v=ZHYYo__Pkg0
3. "So what? Well, the Series A investors of 10–15 years ago operated very differently than most of the angel/seed investors of the last decade. With the rare exception, these Series A firms rarely shared deals with each other, because they wanted to maximize their ownership / dollars into the best deals (after all, they were taking board seats, so they were bandwidth constrained). They also ran more concentrated portfolios (never have I heard of a Series A firm with 40–50 companies). Alternatively, the predominant seed model of the last decade has been collaborative, high velocity and high diversification.
I didn’t make the rules, but I’m doing my best to play the game on the field and it seems pretty clear that Seed is becoming the new Series A. That isn’t to say that there aren’t new/different ways to win (I’m confident there are), but we need to be aware of these dynamics and recognize the pressure that this evolution creates on how we’ve historically invested and the skills required to be successful.
For Equal, that means operating more like the “Original Series A” investors than “Micro VCs.” We think this better fits our style as a firm and are embracing the market’s rotation toward this style of investing at Seed. There are pros and cons to all strategies, but being authentic to your team’s abilities is the strategy that will position you best for success."
https://medium.com/@EqualVentures/seed-is-the-new-series-a-06a6b9d00ecc
4. Another educational episode with the boys. Lessons from the edge of the internet.
https://www.youtube.com/watch?v=wl1TO5hLUzE
5. Germany rising again?
https://www.youtube.com/watch?v=80s5vIrlpAo
6. Worthwhile conversation on how to thrive in our modern world.
https://www.youtube.com/watch?v=GOEsojRfo-w&t=1468s
7. The epitome of Asymmetric warfare.......
https://www.politico.com/news/2023/12/19/missile-drone-pentagon-houthi-attacks-iran-00132480
8. This is why the American defense industrial base is a mess. It stems from policy in 1993.
"The policy of driving companies out of business, I wouldn't even say that was a policy. The policy was to streamline the defense industry so it didn't have a lot of overhead. And I also saw many of these companies had capabilities that the government wanted to maintain.
But in the next three years, we saw our industry lose 40% of its employees to the aerospace industry, and nearly 70% of the companies were basically absorbed and other companies were combined together to be more efficient. And it saved the government a great deal of money. The problem was it reduced the size of the industrial base, should we need one in the future."
9. There is so much here. The future is bright. Mindset matters and technology will help us expand our health span. Really worth watching.
https://www.youtube.com/watch?v=OSV7cxma6_s
10. "2024 will have the highest number of national elections since the mind virus of the “nation-state” infected our collective consciousness a few hundred years ago. Any politician who wants to get re-elected needs to give goodies to the people. For the rich asset holders, give them loose financial conditions by encouraging central banks to print money.
For the poor, give them handouts to cover the rising cost of food and energy, which is a direct result of policies that favour the asset-rich. For the middle class, give them “democracy,” tell them to pay their taxes, bend over, and be glad they got a vote. With this in mind, it makes no sense for a politician seeking re-election to stop the fiat debasement party. The votes from those who benefit from fiat debasement and inflation-linked handouts will outweigh the votes from those who suffer. As a result, money printing will surge in every “democracy” globally in 2024.
Crypto represents a movement to separate money and finance from the state. Using computers, the internet, and most importantly, cryptographic proofs, we the people have created the hardest money ever known, Bitcoin; and we created an entirely new decentralised financial system (DeFi) that is powered by public blockchain networks such as Ethereum … there are others, but they are all dogshit so I won’t mention them ;).
This new crypto financial system depends on maths and grassroots support from unsatisfied humans and not the violent coercion of the state and its banking minions. As capital, which is simply energy transformed, is looking for a safe home free from debasement, it is trickling into the crypto space.
But crypto’s market cap in fiat terms is minuscule compared with the total value of all fiat financial assets. That is why a modest amount of capital fleeing the collapse of the fiat financial system can create such outsized gains in such a short time frame."
https://cryptohayes.substack.com/p/expression
11. "As we saw in the last section, U.S. steelmakers boosted their productivity quite a lot in the 1990s and early 2000s, and the result was a steel export boom in the late 2000s and 2010s. It thus seems unlikely that the U.S. steel industry was so dysfunctional over the last three decades that it literally caused U.S. stagnation and deindustrialization.
A far more likely story is that the U.S. simply stopped using a lot of steel, so we stopped making a lot of steel.
That doesn’t mean this was a good thing — NIMBYism has been a disaster for the U.S., and I think deindustrialization has been a net negative as well. But what it does mean is that we should stop thinking about steel as something that’s desirable in and of itself, and start thinking of it primarily as an input into things like buildings, cars, and machines. Instead of throwing up steel tariffs like Trump did, or trying to protect the ghost of U.S. Steel from Japanese buyers like Fetterman is doing, we should be trying to boost the industries that use steel. And not so we can save some steelmaking jobs, but so we can have the stuff that those industries produce.
We should be trying to promote new construction of housing and solar plants. We should be making it easier to build factories, trains, and highways. We should be subsidizing consumer demand in order to speed the transition to electric vehicles and other green technologies. And we should probably be trying to rebuild our machine tool industry, in order to reduce the risk of excessive reliance on China.
And if we do those things, I predict that we’ll see a revival of the American steel industry as well."
https://www.noahpinion.blog/p/why-the-us-steel-industry-is-dying
12. This was always a good list of predictions for 2024 and love their takes on the big news in the tech industry.
https://www.youtube.com/watch?v=3ay_qYRzcbk&t=980s
13. Not for me but Dubai is definitely winning and well set up for the future.
https://medium.com/@loukerner/why-im-moving-to-dubai-d32a5e54a936
14. This is worth paying attention to. History as a lesson.
Also makes me not want to send my kid to university because of the stupid radical leftist ideas being taught there.
https://www.youtube.com/watch?v=dtN7Z20ga6Y
15. Good overview of the state of the AI and tech world.
https://www.youtube.com/watch?v=ynrvsCYNB2Y
16. Huge fan of Sahil Bloom. This is a great view into how he thinks and writes.
https://www.youtube.com/watch?v=f-s22uCixMw
17. A solid interview with my friend Harry. Building a media and VC investing empire.
https://www.youtube.com/watch?v=W9WV8uyCyhg
18. I've definitely become a Lessin acolyte. He has so many smart things to say and is a great investor and observer of Silicon Valley.
https://www.youtube.com/watch?v=_w-VYUDJRrQ
19. "In a way they are the triumvirate of macroeconomic trends that rule the world. One creates a new wave,the other runs that wave through its natural lifecycle, and the third destroys and takes us back to creation. As these 50–100 year macroeconomic cycles are playing out, there is an innovation cycle that operates underneath it, subservient to it. This cycle may be 30–40year cycle of capex & opex dominant forces.
What does this mean? Every few decades, a few decades worth of CAPEX — time, people,& money put into research, development and innovation— is able to unlock a new ‘resource’ that then eventually becomes ubiquitous and cheap for the world to use and build new things with which then turns into an OPEX cycle. If all this sounds a bit academic, just give me a few minutes and it’ll all make more sense.
When we zoom out, this is how much of SaaS looks like today: a Malthusian bloodbath. At the beginning of the SaaS cycle, most markets were green-field opportunities, but today almost every SaaS category is saturated, every account requires a rip & replace, leading to longer and more competitive sales cycles, lower customer loyalties, leading to lower NRR, higher churn, and high vendor fatigue. These are the tell-tale signs of the tail end of an OPEX cycle— a cycle that doesn’t speak “I win because my innovation is better than yours”, but rather “I win because my $s are bigger than yours”.
Over the last 60 years, a lot of R&D has gone to bring the cost of compute down to near zero. This led to a personal device in every hand. We also have had the cost of distributing this compute down to near zero as well. That brought the marginal cost of software down to zero, which is basically the reason the internet exists. The next 30 years is going to bring the cost of intelligence down to zero. What would the world of software look like if everything ran on “insights” instead of “compute”? If you are a founder building in SaaS, this is what you should be gearing up for.
Just as the earlier Schumpeterian extractive and innovation-heavy cycles unlocked net-new resources—an oil drop, or a CPU cycle—the new resource that is now being unlocked is perhaps an “AI token”. As the internet cycle winds down, and the AI cycle picks up, it’ll be important to know where we are in the cycle and which assets to play in each part of the cycle.
As a founder, it likely matters less as a successful founder will likely generate wealth no matter which cycle s/he is in but as a long-term investor, this is important because playing these cycles wrong could lead to investing in the wrong asset or the right asset but at the wrong time.
Making these mistakes is more common than we think. Let’s take a few examples. While there has been a 20yr surge in oil production & prices in the US, you’d still lose money in having invested in oil indices over the same period."
20. I really want to visit Kyrgyzstan and will probably do so in 2024!
https://www.youtube.com/watch?v=gnktDsOxDrY
21. Powerful new ship critical to American power in the Pacific.
https://www.youtube.com/watch?v=s8DzimKKXc8
22. An Arctic Silk Road? Interesting development.
https://www.youtube.com/watch?v=pvy9usF7ohE
23. "My hypothesis is that deep tech companies that build valuable IP can have meaningful exits quickly. On the other hand, traditional tech companies rarely have very strong IP and are mostly acquired based on strong traction. And it often takes longer to get to meaningful traction than to accumulate valuable IP.
As a result, deep tech VCs value strong founding teams even more highly than traditional VCs. If the team is good enough to produce unique, valuable IP, then they are likely to experience a good exit."
https://every.to/p/why-you-should-build-in-deep-tech
24. Maximum bullish on Japan and will definitely be doing a lot more business there in the next decade. I so love the place and look forward to spending way more time there.
"Underlying these four Japan megatrends is demographics. Far from being a negative—fewer people must equal lower consumption—Japan’s demographics will turn out to be a catalyst for positive change.
-Industries will consolidate, thus allowing greater efficiencies and economies of scale.
-The mattress-money wealth of Japanese households will be freed and reenter economic circulation.
-Increasingly scarce labor will be empowered and gain purchasing power.
-And global talent will build careers and make their fortunes here in Japan.
Importantly, all these forces represent real structural change that will remain in place for the foreseeable future."
https://japanoptimist.substack.com/p/japan-megatrends
25. "In practice, ambiguity aversion discourages people from doing things like participating in the stock market or trying new medical treatments when risks are less known. This may seem rational—better to play with the devil you know—but our ambiguity aversion also prevents us from seizing the upside of possibility. To be a leader is to act in the face of incalculable risk. As OKCupid founder Sam Yagan puts it, “The single biggest predictor of executive success is how you deal with ambiguity.”
One reason it’s so hard for us to sit with ambiguity is that our brain has a bias toward negative outcomes. If you are given a bag with a known mix of 50 red and 50 black balls and a bag with an unknown mix, it’s easier to assume that the unknown bag has worse odds than 50-50, even when it could just as well have better odds. While it’s easy to see the potential downside of turning toward the unknown, it’s much more difficult to see the potential upside.
In many ways, the job of an entrepreneur is to cultivate faith in the upside. Whether you are leading a company toward a new market or making a personal decision about your career, you can use what psychologists call cognitive reappraisal to counter the anxiety of not knowing. Cognitive reappraisal is a fancy way of saying “manage your mindset.”
While you might not be able to control the future, you can control your perspective on the unknown. Exercises like Tim Ferriss’s fear-setting, which asks you to take a realistic look at the upside, downside, and cost of inaction of any given decision, can help counter your tendency to catastrophize."
https://every.to/p/how-to-deal-with-uncertainty
26. "Itzler, who co-founded 29029 Everesting, is rangy and puckish, and he appears to have plucked his outfits from a college student’s laundry basket. His résumé is all hairpin turns: a former rapper, he wrote the earworm New York Knicks theme song, managed Run-DMC, and launched five successful companies, including a private-plane-rental service, before becoming a part owner of the Atlanta Hawks.
Having found his métier in motivation, seven years ago, Itzler is determined to become its leading practitioner. He believes that what we really want is to feel proud of ourselves. His chief method for instilling pride is to set physical challenges so difficult that you must discover something new within yourself to meet them.
Itzler told me, “What I’m really doing is providing people with a foundation for how to live. I could definitely make this a hundred-million-dollar business, because the category has exploded, and there’s such huge need.” Yet motivation, like intimacy, is hard to scale. It works best in high-school locker rooms, less well in arenas, and rarely, or barely, on Instagram. Itzler intends to grow with his clients—yet he worries that reaching the summit in his field might prove incompatible with becoming his best self.
“This space is filled with a lot of people regurgitating what other people have been saying for years, a lot of predatory marketing, a lot of snake oil,” he said. “Everybody says they’re not in it for the money, but everybody’s in it for the money.”
Self-help itself recently got an upgrade to “personal development.” It’s no longer the remedial training you undergo to quit smoking but a personal-brand refresh to catapult you into the C-suite. Every weekend, around the country, conferences attract aspirants eager to flip houses, or sell solar panels, or just get rich in some unspecified way. The conference-goers, mostly in their thirties and forties, have the air of commuters who missed the first train to the city and are determined to crowd onto the next one. They seek trade secrets and, better still, the mind-set to deploy them."
https://www.newyorker.com/magazine/2023/12/11/jesse-itzlers-secrets-of-success
27. "In my opinion, the creator economy thesis fell apart because investors had a fundamental misunderstanding of what risks they were underwriting. They didn’t understand the media industry, they didn’t understand creators’ needs, and they totally missed that this was a vertical SaaS bet.
To understand why creator economy bets were bad, you have to understand why creators themselves are a bad business.
A small business in general is a shitty business. 65% fail in the first 10 years in the U.S.
A media company is also a shitty investment. Media stocks had their worst decline in 30 years in 2022.
A creator is a small business that is also a media company (aka shit squared).
It is important for me to note that as a creator, I am one of those terrible businesses. I think there is economic value to be found by smart operators, but the fact is that the macroeconomic conditions for the sector aren’t exactly favorable."
https://every.to/napkin-math/what-happened-to-the-creator-economy
28. Tons of good tips for a productive, successful and happy life: Tai Lopez.
https://www.youtube.com/watch?v=4MVgGwWFiq8&t=3187s
29. Elad Gil is a legend in Silicon Valley: dual threat as a top tier investor and operator.
https://www.youtube.com/watch?v=b4CWtfC0HIM
30. I always watch this: Zeihan has been more right than wrong.
I like the attention to demographics and supply chain stuff, even though his predictions based on these might be bit extreme. But super helpful for understanding where the world is going.
https://www.youtube.com/watch?v=7FzjJIzWOgY&t=201s
31. "Japan’s unique approach to space utilization, its appreciation for specialization, and a regulatory environment that, while complex, can be more navigable for locals, all contribute to a landscape that is particularly conducive to small, independent establishments.
I love startup and small business culture, and there’s a lot of inspiration we can take from other countries to keep improving it. We should find a way to help American cities re-discover their own sense of humanity and creativity, while bolstering some of the elements that have started to erode since before the pandemic: warmth, good customer service, businesses that value regulars, fewer chains and more independent establishments.
In fact, I’d highly recommend those who can afford it take a trip to Tokyo. Better yet, venture outside of the city center and into residential neighborhoods. Taking inspiration from Japan is about more than just policies; my real call to action is to my fellow founders to think about how we can counterbalance the aloofness that accompanies our cities’ too-cool attitude with a kind, service-first approach."
https://medium.com/japonica-publication/the-magic-of-japans-micro-businesses-f7ac3bca8d49
32. This guy seems to be one of the very few super rich guys who is living their best life.
Outside of Richard Branson, Gianluca Vacchi actually seems to be really legit having fun.
https://www.dmarge.com/who-is-gianluca-vacchi
33. Sweden and Poland are the regional powers in Europe. And possible alliance.
https://www.youtube.com/watch?v=UTSrGpvZ_2w
34. Some great insights about investing and running startups.
https://www.youtube.com/watch?v=fA00lIUES9A&t=822s
35. "With that said, in the USA, women are more likely to be childless, not married and generating income well into their 30s and 40s. Declining birth rates is already a trend and women will be spending even more money to maintain looks and status later in life.
For this reason we’ve got BowTiedTiger here to talk about various business lines primarily targeted at Women.
The Medspa.
A growing market to be sure and will continue to be for years to come as the population ages. The attraction is, of course, a non-surgical approach to youthful appearance and cosmetic improvement by several means including injectables (Botox and the like, as well as Fillers), laser therapies, fat reduction therapies, hair removal, typical aesthetician procedures such as microdermabrasion, dermaplane, and sales of white label skin care products or branded with an affiliate agreement."
https://bowtiedbull.io/p/medspa-angle-long-loneliness-thesis
36. Sober predictions at geopolitical level but really positive on the business side in America.