Marvin’s Best Weekly Reads July 14th, 2024
“Life’s short. Eat dessert first, work less and vacation more” – Lea Mishell
"Since the decision makers are all old, none care or have interest in helping generations from their grave. This means the lean is going to be towards? Wealth Inequality.
Expect the decision making to benefit asset holders. Create equity. Don’t focus on your career/W-2. Just hit the performance metrics and be likable while pretending the paychecks don’t exist. If you find yourself at a sweatshop W-2 (bad luck), switch ASAP until you can get into a bloated environment where it is easy to skate by.
Set Up to Scale: You don’t really need a large team to build anything anymore. Look at something like Tether and its massive profits with practically no employees. The Industrial Age is over. Having a high head count does not mean you are growing or succeeding anymore. It just signals that you’re a bad human resource manager and you don’t have any idea how to scale with technology.
Comically, having a fast growing headcount (outside of ultra small start up) just says you’re falling behind at this point. The smart big tech companies are already cutting heads for the middle layer (rapidly!). The skill difference is shrinking between younger and older employers due to tooling improvements.
Earn Online: Beating a dead horse. Considering that governments are certainly not up to speed on tech you should assume no geographic location is safe. No need to anticipate that a particular country goes to zero tomorrow. However, you should have a plan B in a worst case scenario. If your money is tied to the internet, you can change states, countries, etc. No geographic risk. In a world of EMP attacks another 10 IQ conspiracies, the world is already a zero anyway so don’t worry about that scenario."
https://bowtiedbull.io/p/president-is-a-fake-job-just-a-talking
2. "Venture distribution cycles have elongated to the point that LPs now risk a decade of negative cash-flow on many of their VC relationships.
That's not sustainable for institutions with large spend requirements, such as a university endowment. At least not if it's overallocated to venture."
https://www.axios.com/2024/06/28/venture-capital-endowment-foundation-yale-model
3. "China has long sought to harvest U.S. defense companies’ expertise. In 2019, then-Defense Secretary Mark Esper accused China of “perpetrating the greatest intellectual property theft in human histor,” while other experts have long suggested that the People’s Liberation Army Air Force’s premier J-20 fighter jet incorporates numerous stolen design secrets.
Today, however, “adversaries are operating with greater scope, scale and sophistication,” Haugh said, and the threat is not limited to intellectual property theft, but now encompasses efforts to disrupt supply chains and critical infrastructure."
https://www.airandspaceforces.com/cybercom-china-targeting-defense-industrial-base/
4. Learning from a true long term thinking VC. Original Operator & VC from 2000s.
https://www.youtube.com/watch?v=A6cZK4ehQjg&t=1s
5. Good state of VC market in Q2, 2024 from Redpoint Capital.
https://www.youtube.com/watch?v=w5DetbQdBJc
6. So many great data points on what's up in SaaS.
Net net: it's ugly and will continue to be ugly for a while. There is still stress in the system.
Good founders should be aware but you keep going, keep building and keep selling.
https://www.youtube.com/watch?v=00_mp6k7zQI
7. Coatue founder. 50M to 50 billion in AUM. Also 6 kids too. Impressive.
https://www.youtube.com/watch?v=_nuSOMooReY
8. National Security and Silicon Valley's role. World is changing.
https://www.youtube.com/watch?v=vroFlxZykIE
9. This movie looks so good. Tokyo Cowboy.
https://www.youtube.com/watch?v=r_l11juia6E
10. "Entrepreneurs learn a number of lessons and tips along their journey. Go big from day one, 10x products win, markets are more important than ideas, small, fast-growing markets are best, and culture wins are my favorite general tips for founders. There’s no one way to do it, but these have been instrumental to me."
https://davidcummings.org/2024/06/29/5-favorite-general-tips-for-founders/
11. TLDR is an emerging media empire. Pretty good breakdown.
https://www.youtube.com/watch?v=VhPCX5GAFhM
12. "An "investment loop" in user onboarding occurs when users start using the product with a low-friction entry point (no signup form).
As they progress through the onboarding, they become more likely to continue using the product. Only once they're sufficiently invested do you ask them to sign up with email (and perhaps their credit card)."
https://justinjackson.ca/investment-loops
13. "VCs are nothing if not pattern recognizers, right? So, whether consciously or subconsciously, they start to correlate deference as indicative of lower quality. The nicer you are to a VC, the more likely you are to be a bad company.
Now, the opposite is also true. The more a company is crushing it, the less deference they need to pay VCs. The more a founder ignores you, the more likely it is that the company knows its good.
That's the reality of storytelling. The stronger a group of people believe something, and the bigger that group of people is, the more likely that thing is going to start getting reflected in reality. Just one necessarily reality of an inefficient market that is largely dictated by human emotions, whether founder or VC."
https://investing1012dot0.substack.com/p/the-groucho-marx-mandate
14. "However, despite its substantial contributions to the global AI ecosystem, Taiwan often struggles to accurately represent itself in global assessments by international organizations such as the United Nations.
The irony is stark: Despite a lack of global data on Taiwan’s AI performance, the island’s semiconductor industry, led by national champion TSMC, is the backbone of global AI infrastructure. The Economist recently reported that the island produces over 90 percent of the most advanced semiconductors for the world’s most cutting-edge AI applications and research."
https://thediplomat.com/2024/06/decoding-taiwans-true-ai-potential/
15. "There are basically two things Trump could do with regards to the threat from China. The first is to retreat, offering up Taiwan and the Philippines’ islands as a sacrifice in the hope that China will be appeased. The second is to strengthen America’s hand in the Pacific, increasing defense spending, diverting resources from Europe, and building up forces to deter a Chinese attack.
It’s not at all clear to me which of these Trump will do.
There’s also the question of how China will react to a Trump presidency. The general consensus seems to be that China hates both Biden and Trump, the former for his effective economic policies, the latter for his general attitude of antagonism. Some argue that China fears Trump more because it views him as an unpredictable loose cannon, much like the Soviet Union Richard Nixon or Ronald Reagan, and that this uncertainty would deter them from launching an attack (though that might be wishful thinking).
So on the biggest and scariest question of them all, Trump remains an unknown quantity. America looks fairly likely to roll the dice on this riskiest of gambles. My general conclusion is that the era of instability and chaos of the late 2010s hasn’t ended — it’s just shifting from domestic turmoil to international chaos. Buckle up, because it isn’t over yet."
https://www.noahpinion.blog/p/time-to-think-about-a-second-trump
16. "It’s to remind you that the best way to latch onto the future is to think through affirmative possibilities, to remember that the world is in flux, and to keep turning over old stones.
This mindset is particularly important with AI. Some of the tasks it struggles with today are going to be child’s play by next year. Like Claude, which has improved leaps and bounds since its last model, and will likely continue in this direction.
Previous eras of creativity have mostly looked a bit like sculpting. A sculptor takes a block of material and carves it, slowly but surely, into shape. Nothing happens without her hand. Even when an assistant is involved, the sculptor pores over the project, because their human input is important at every point of the process. So too with writing, or programming, or painting.
This era of creativity is going to look more like gardening. A gardener doesn’t grow plants directly. Instead, she sets up the conditions for the garden to grow. She takes care of the soil, the water, and the sunlight—and lets the plants do their thing.
So too with AI. As more of our time is spent being model managers, we won’t be directly making as much creative work. That’s like pulling up a plant to help it grow. Instead, we’ll be creating optimal conditions and letting the models do their work."
https://every.to/chain-of-thought/when-ai-gets-more-capable-what-will-humans-do
17. "As a society, we have never had more tools at our disposal to track “activity.” 40% of workers claim that their time spent active on their computers is monitored, and 31% are subject to real-time monitoring. But activity is not synonymous with productivity, and too much activity can actually hinder productivity. We think that the solution to every problem is to simply spend more time on it, or work harder, but exhaustive effort has diminishing returns. Often, the most effective choice is simply stepping away for a bit.
Thinking is a critical part of the writing process, and if you’re just writing, and writing, and writing, with no time to think, the writing will fall flat. If you’re trying to solve a difficult client problem, the solution will likely hit you while you’re walking around town, not while you are staring at your monitor. 90 minutes of free-thinking and 30 minutes of focused work is often more potent than two hours of grinding away. Don’t underestimate the value of stepping away from time to time."
https://www.youngmoney.co/p/benefits-slowing
18. "Costner is now 69. In the past decade, he has experienced a revival of sorts, doing nuanced and charismatic character work in film after film while starring on Yellowstone, the most popular show on television. Other actors might be content with their late-career good fortune. But other actors are not Kevin Costner, who is prone to obsession, regardless of what that obsession may cost. “I’m so grateful that I’ve never seen a UFO,” Costner said. “I’m a pretty sane person, although some people would think maybe something else. But what happens once you see one? You can’t let it go.”
One of those obsessions is a Western called Horizon, which Costner—as cowriter, director, and star—has been trying to make since 1988. Over the past 36 years, the story has evolved, from a two-hander about a couple of guys to a vast, panoramic portrait of the founding of a town—called Horizon—during a particularly bloody chapter of America’s western expansion, but Costner has never fully left it alone.
But if no one in Hollywood wanted to make one, they certainly didn’t want to make four. And so Costner, a few years ago, decided to fund the film himself, with the help of two outside investors whose names he will not disclose. (More recently, Warner Bros. has also come aboard for the first two films, handling theatrical distribution.) Press reports have been wide-eyed about just how much Costner has put on the line to make the film. “I know they say I’ve got $20 million of my own money in this movie,” Costner told me. “It’s not true. I’ve got now about $38 million in the film. That’s the truth. That’s the real number.”"
https://www.gq.com/story/kevin-costner-gq-cover-story
19. "But West and others have also come to see rawdogging flights as a kind of challenge, like the Tough Mudder or No Nut November, the goal being to see how fully participants can deprive themselves of creature comforts, up to and including free snack and drinks and even bathroom visits. A true rawdogger takes no indulgences."
https://www.gq.com/story/why-men-are-rawdogging-flights
20. "It all started with a TikTok video by 27-year-old Megan Boni, known as Girl On Couch. Her April post, amassing about 49 million views, features a singsong message: “I’m looking for a man in finance. Trust fund. 6’5.” Blue eyes.”
DJs remixed Boni’s audio. Thousands of social-media users created videos with the sound or riffed on the phrase—making it a front-runner for TikTok’s song of the summer.
Boni, meanwhile, struck a deal with Universal Music Group. Versions of her “Man in Finance” song are now on Spotify, including a release with David Guetta, a top name in dance music.
Finance bros, the world seemed to declare, are back.
Boni said she made the original video as a satire of women with impossible dating standards, not because she’s particularly interested in dating a man in finance.
“I wanted to make fun of single people, including myself,” she said."
https://archive.ph/eZmVI#selection-5747.0-5763.52
21. "This is what actually scares me the most… thanks to Ai big tech is getting back in shape to run a marathon at breakneck speeds. It’s been a long time since all of them competed so intensely against each other to win, in a very public way, with events and media coverage almost daily.
Startups face significant challenges in competing with these giants. The financial muscle of Big Tech allows them to outspend startups in R&D and acquisitions. The data advantage held by these companies means that their AI models can be trained on more comprehensive and varied datasets, leading to superior performance. So most startups will need access to it via partnerships, APIs etc - hopefully go beyond being just a wrapper."
22. "One of the contradictions I’ve felt about Japan is that large-cap growth in Japan gets priced at ridiculously high multiples. It’s not uncommon to see these things trade at 40 times P/E or higher. This is presumably because the cost of capital in Japan is low and in a deflationary economy where the population is declining, growth is rare. However, when you look at these small companies in great competitive positions that are growing double digits with lots of room to grow, you can find them trading for single-digit earnings multiples!
The delta is so big that I call this the ‘chasm’. If you look at some of the large-cap growth companies, these also traded at very low multiples early on but as they continued to grow earnings per share at some point brokers start to cover it, institutions start to pile in and the stock re-rates quite significantly and that contradiction gets resolved. Some of these large caps are expensive and can de-rate as interest rates rise, but the gap is large enough that I still think it’s more likely that these small companies will re-rate than the large caps de-rating down to where these small caps are valued.
There are some good reasons for this gap, the first is that Japanese stocks are ridiculously underfollowed. I think it was something like close to 50% of the 4000 listed companies aren’t covered by any broker. Compare this to the Russel 2000 where most companies have some kind of coverage on the stock. Coverage is ultimately a function of investor demand, so if there’s no demand no broker will cover it making it illiquid.
This leads to the second reason which is that as a result, the small companies are owned by passive funds and Japanese retail investors. But here's the problem: most of the Japanese populace lost interest in allocating to stocks decades ago and with it, our ‘financial literacy’ of understanding equity capital markets has dwindled. Those same people are setting the prices of some of these assets today."
https://www.readideabrunch.com/p/idea-brunch-with-made-in-japan
23. "What is getting ignored in this current startup world is that we have so much !@#@% jammed into our limited attention spans because of a million notifications a day and a follow-up NPS survey for every single restaurant/software/service/product/travel experience and a million other things occupying our attention, there is no room left even for good stuff.
So the problem for startup founders is, you can have product-market fit, you can execute flawlessly, you can take the risk out of the buying process, you can offer a deal, and you still may fail because we live in a world where you are just… crowded out. You did everything right. You did everything your VCs said, but I just don’t have the mental bandwidth to pay attention to you.
And that’s just for low friction products. A lot of AI products are higher friction, so the situation is even worse.
Which brings me back to my original point - attention is all you need. The companies that win now are the ones that can find ways to get attention. I’d even go so far as to say attention-market fit may soon become more important than product-market fit."
https://investinginai.substack.com/p/attention-is-all-you-need-but-not
24. "Over the past 40 years, Arnault has assembled the world’s largest luxury conglomerate and globalized a sector once constrained by the limited ambitions of family-owned European companies encrusted in tradition. He didn’t invent conspicuous consumption, of course. But thanks almost exclusively to him, luxury is now the universal obsession of shoppers on Shanghai’s Nanjing Road, Milan’s Via Monte Napoleone and Rodeo Drive in Beverly Hills and of the tourists who flock to LVMH stores on the Champs-Élysées in Paris and Fifth Avenue in New York City.
Arnault has dressed royals and presidents, supermodels and celebrities. Perhaps more than anyone else, he’s made the clothes and accessories that signify status among the global elite—and project a bit of their insecurity, too.
For that, he’s the wealthiest person in the world. Or very close to it, depending on the day. (And on French politics, which lately has been turbulent and deleterious to LVMH share price.) As of mid-June he has a net worth of around $200 billion, as estimated by the Bloomberg Billionaires Index. His fortune, built on the most analog of industries, is only comparable to the digital riches of a few titans who built their affluence on expanding access to things like software, cloud computing and electric vehicles.
Jeff Bezos, Elon Musk and Bill Gates, often criticized for their social and sartorial tastes, have invented our future. Arnault, the embodiment of taste, yoked together the nouveau-riche brands that symbolized Europe’s postwar influence and exported them all around the world."
https://archive.ph/ZPCuU#selection-1851.0-1873.240
25. "All the old papers were already online, and they quickly followed the young guys into the chaos of clicks. As mobile grew more popular, Facebook grew more dominant, and once the world’s attention was concentrated in one place every media company in the country started going viral just enough to make them feel like they were the future. It was a mad gold rush, so obviously venture capitalists got involved, and once that happened valuations became dumber than you can possibly imagine. A few years later, Zuckerberg flipped the free traffic switch to “pay me,” and everything began to die. Unless of course you’d built up email-based subscriptions before 2017 or so.
Do you know who charted the “new” course in subscriptions?
The New York Times launched a paywall in 2011, six years before Vice’s famously deranged $5.7 billion valuation (for comparison, the Times was trading around $2.3 billion at the top of that year), and by 2014 they were featuring a wide array of newsletters. The Gray Lady wasn’t interested in farming clicks, she was laser focused on your inbox. Sharing stories across the new medium was cute, and certainly the writers were all distracted by the rush of Twitter. But leadership was focused on rebuilding their company online, which could only begin with distribution. This is not to say the old thing was the new thing all along. This is to say there was never actually a “new” thing. There were just a bunch of stupid rich kids screwing around on the internet, and a lot of dumb money (some things never change). Separate from its actual content, a news company is, and has always been, distribution + paid + ads. Just as in the physical world, you either had all three online or you didn’t, and if you didn’t you were doomed.
By the mid-2010s, the instability of social media was obvious to everyone, but for most huge players it was way too late to adapt. Once Substack democratized the bootstrapped newsletter, which guaranteed the most popular writers and publishers ownership of their readership by way of the email, a fresh media Renaissance was inevitable, and random online shitposters quickly became more influence than Vox or Vice or any of the other huge encumbants."
https://www.piratewires.com/p/we-are-the-media-now
26. "Frederic Court of Felix Capital discussed the necessity for VCs to think about their funds, not just as investment strategies, but unique products for LPs that stand out in a crowded market. Generic fund strategies are predicted to be much harder to raise given the competition in the market. Jason Gray amplified this sentiment: “SuperReturns underscored the importance of VCs distinguishing their funds in a crowded market. To remain competitive, unique value propositions have become essential.
In conclusion, the Super Venture conference highlighted a cautious yet optimistic outlook for the venture capital and fintech ecosystems. The industry is adapting to new realities with a focus on specialization, capital efficiency, and strategic differentiation."
https://99tech.alexlazarow.com/p/the-money-behind-the-money-lp-trends
27. "By day, Yass, who has a personal fortune of $47 billion, oversees Susquehanna International Group LLP, a trading firm burrowed deep in the machinery of modern finance. It’s a giant force in options, stocks, energy, bonds and foreign exchange—and also in more esoteric stuff. It runs a Bermudan subsidiary that sells niche insurance for lottery payouts and natural disasters, a Bahamian cryptocurrency operation and an Irish sports-betting group. It backs startups around the world, including in China and Israel. And it arrived relatively early to Bitcoin—Yass purchased some from a US marshals auction following their seizure from the illegal marketplace Silk Road, according to a person familiar with the matter.
A registered Libertarian since 1996, Yass has in the past decade spent tens of millions of dollars funding politicians focused on limiting government intervention in every area that matters to him, notably taxes, trading, education and gaming. He personally champions a controversial overhaul of public schools favored by Betsy DeVos, Trump’s former secretary of education. But more recently he’s found himself at the center of attention for another reason: his roughly $15 billion stake in ByteDance Ltd., the corporate parent of TikTok."
https://archive.ph/BKZuw#selection-1853.0-1857.228
28. "I’ve been that guy. Even now, I am that guy sometimes. I’ve done regrettable things, and I’ve hurt people with my behaviour. But getting treated for bipolar disorder, diving into psychedelic therapy, and experiencing internal family systems therapy have made me a better human.
I still wander into douchebag territory at times, but I don’t get lost there anymore.
We’ve all done things we’d undo if we could. We’ve all been horrible at some point in our lives. But there’s a solution.
Forgive yourself.
Be a little less horrible."
https://www.sanjaysays.co/p/10-regrets-from-a-58-year-old-douchebag
29. "Hilger, a medical device salesman, ran a company in Minnesota called JBJ Industries and, in 1986, had cooked up an idea with a few of his friends.
There wasn’t anywhere good to change a diaper. What if they put change stations in public washrooms? They created a fold-out station that could be mounted to a wall, and patented the invention.
The problem was, Hilger needed to get the dads — who weren’t changing diapers from their perches in the boardroom — on his side.
Once he did, the money started rolling in. So did the market share: Koala Kare’s share of the US market is now an estimated 85%.
But no monopoly is created equal. Some, like Koala Kare, grow organically, riding a cultural tide to decades of success. Others, like Google and Apple, face lawsuits from the FTC for monopolistic practices.So why are some monopolies able to flourish while others are scrutinized?"
https://thehustle.co/originals/the-worlds-cutest-monopoly
30. "Make money, there’s nothing wrong with that, but remember that real wealth comes from being a person rich in imagination and character.
Nobody can take that away from you."
https://www.sanjaysays.co/p/4-great-reasons-to-be-rich
31. "For venture capitalists, this part of the investing process – the time between discovering a desirable, competitive deal and making the investment is the arena. It’s the province of sharp elbows, late-night phone calls, speed reading data rooms, and dueling term sheets.
If handled well, this can be the making of the firm. With a small number of intelligent, farseeing decisions, you may find yourself the equity holder of a legendary business and the partner to a historic entrepreneur. But if managed poorly, you may find yourself sitting on an overheated pile of buzzy logos, not real businesses.
Based on the strategies of the exceptional investors we’ve interviewed, and our own research, we’ve devised a five step playbook to help you run a tight process, make shrewd decisions, and win allocation."
https://thegeneralist.substack.com/p/how-to-win-a-competitive-deal