Marvin’s Best Weekly Reads July 7th, 2024
One must maintain a little bit of summer, even in the middle of winter--Henry David Thoreau
"For Mubadala’s next act, Ajami is seeking to milk his tech connections to put more money directly into startups. At the same time, Mubadala is increasingly using its clout to encourage Western companies and investors to deepen their ties to the UAE’s tech ecosystem, part of the country’s broader push to diversify its economy away from oil.
For Ajami, 49, the goal is for Mubadala—a term that means “exchange” in Arabic—to one day be mentioned in the same breath as Sand Hill Road’s most vaunted investment firms. “The way founders speak about Sequoia—why not, 20 years from now, won’t they speak that way about Mubadala?” asked Ajami.
Ajami has a ways to go before he gets Mubadala there. Mubadala has stumbled badly in Europe as it has tried to employ a strategy similar to the one it used to break into the U.S. The companies it has backed in Europe have performed so poorly that Mubadala has put Jonno Elliott—who joined the firm in 2022 after leading VC investments at Virgin Management Ltd.—in charge of salvaging its portfolio of companies from the region, according to a person who spoke to Elliott. Among some European investors and founders, it has developed a reputation for aggressive tactics that could impact its ability to invest in top European companies in the future.
And while plenty of tech investors speak highly of Mubadala, many of them are eager to curry favor with the deep-pocketed firm so it continues to invest in their funds, especially in the current dismal fundraising environment for VC firms. Privately, after singing the praises of Mubadala as a limited partner, many venture capitalists have also said its direct investments in startups don’t carry the weight of other investors’ bets. Sovereign wealth funds just don’t have the track record of picking winners that VC firms do, those critics say.
Still, Mubadala has had some notable successes. Ajami and his lieutenants have helped it buy shares in buzzy companies like SpaceX, Waymo, Klarna, Brex, Chime, pharmaceuticals company Recursion and AI infrastructure company Crusoe Energy Systems, among others. Mubadala Capital, the VC and private equity arm of the sovereign wealth fund, oversees a $24 billion pool of capital with 180 employees spread across several offices, including in London, New York and San Francisco, which hosts a tech team they first established in 2017.
Mubadala is also continuing to plow money into other VC funds. Its portfolio includes Altimeter Capital Management, Greenoaks Capital, Iconiq Capital, Dragoneer Investment Group, 8VC, Marcelo Claure’s Bicycle Capital, DCVC, Haun Ventures, Arch Venture Partners, Clocktower Group, Radical Ventures and a handful of emerging managers, like a new $30 million seed fund called Nebular, according to several people familiar with these funds."
2. This is a story of the 2nd gen of Huy Fong, getting greedy and trying to screw their supplier of peppers Underwood Ranches (who actually won in lawsuit).
Huy Fong are getting what's coming to them.
BTW: buy Underwood Ranches Hot sauce instead.
https://www.axios.com/2024/05/09/huy-fong-sriracha-shortage-2024
3. "We begin with the rather obvious observation that the wanton destruction of facilities integral to the daily lives of non-combatant civilians is almost certainly a war crime.
Supporters of the Russian side will point to the refinery attacks as justification, but the response thus far has been wildly disproportionate to the provocation. They might also call attention to how the US carried out similar raids against mostly civilian targets in Iraq, Afghanistan, Syria, Libya, and Kosovo. While these accusations certainly carry some merit, such whataboutisms are only likely to harden the position of both sides, diminishing the prospects of a diplomatic settlement to the war.
The months ahead look set to deliver incredible hardships to millions of innocent civilians. With the warring sides farther apart than ever, those in the West will eventually be forced to choose between two highly unpalatable options: sit idly by while much of the population of Ukraine is devastated, or become a direct participant in a kinetic war with a nuclear superpower.
One way or the other, the calendar will soon demand clarity of intent."
https://newsletter.doomberg.com/p/doom-loop
4. "Going from an angel to a fund manager is a huge jump—as is going from a junior person at a fund to the main person at your own fund. It could take a long time to convince people you can make that leap, but you want to stay in motion as much as possible during that time—remaining in market, keeping your network warm."
5. One of the best conversations in Silicon Valley these days on AI. With guest Elad Gil.
https://www.youtube.com/watch?v=psBIQdSAKjE
6. No surprise here. This is a super impressive new VC fund. Kevin is an OG of Silicon Valley.
https://techcrunch.com/2024/06/21/kevin-hartzs-a-raises-its-second-oversubscribed-fund-in-two-years/
7. "Regardless, Series As haven’t grown to nearly the extent of Seeds. During the last 14 years, the ratio of Seeds to Series As has grown from about 1.1 to 1, to 5 to 1. Meanwhile, the ratio of Bs to As is relatively constant : between 3 & 4 to 1.
With excess seed supply & in an era where forward public software multiples have reverted to the mean from their stratospheric levels, Series A rounds are harder to raise. AI startups, the darlings of the current era, are a notable exception. In this category, the heady multiples of 2021 & 2022 still apply.
But for classic SaaS companies, the Series A Crunch is real. In 18 months, the Series B will again become the hardest round to raise."
https://tomtunguz.com/seedpocalypse-2024/
8. Always learn something from Tim Ferriss. Look for patterns of anomalies. This was an old interview but super insightful tips on how to improve your life.
https://www.youtube.com/watch?v=nos3AXfdFnY
9. "The line between AI opportunity and AI washing is neither clear nor fixed. Sure, it’s obvious for the outliers — Nvidia will continue to register upside powering AI, and shady brokers who claim to use AI to pick stocks will not. But for most firms, clarity will only come with hindsight. Ironically, a year ago the big story was how to detect if someone was using AI (news stories, student papers, lawyers). Today, we’re attempting to discern if a firm is not using AI."
https://www.profgalloway.com/ai-laundromat/
10. This is a "must listen to" discussion from one of the best early stage B2B VCs. It's an insight rich conversation.
https://www.youtube.com/watch?v=S0pab-qwSoo&t=3428s
11. "For entrepreneurs, my recommendation is to say “we” when referring to the work being done by your startup and avoid using “I.” “We” recognizes that it’s a team effort and shares credit where credit is due. Entrepreneurs would do well to remember this in their communication."
https://davidcummings.org/2024/06/22/i-vs-we-when-speaking-as-a-founder/
12. The best new show on tech and investing. BG2 at the Coatue Conference.
https://www.youtube.com/watch?v=Xuurlc-V2Jg
13. An alarming view of the geopolitical future. China is making some smart moves in the Global South. US is in decline mainly due to incompetence and arrogance.
https://www.youtube.com/watch?v=tSJ8NPi_xTA
14. Not sure I agree with this take on the Trump trials. I agree with what this looks like from the outside.
"The remedial mechanism of Society has been desecrated for political gain. There is no recourse or compromise to be had. “The System is rigged, why bother?”
In time people will begin to disregard the law. Laws from on high will be disregarded at the lower levels. They will take the law into their own hands. Hoping to tip the scales of Fate to their favour…
People no longer trust each other. Hell, they don’t even know their neighbours. America and Western Society is collapsing. A jury of your peers? What peers, if there’s no community; they probably don’t even speak your language.
America and the West have become more tribal and factionalized. Fractured by their differences and multiplicities. Cascading down till it reaches the local level. The end of our age of Atomization."
https://mercurial.substack.com/p/out-of-the-shadows
15. "Nations go to war for fear, honor, or interest. The PRC pushes the world to the brink of war on at least three different fronts from the Himalayas to Pacific because it has an interest in aggression, it may miscalculate when war will happen or it may misjudge another’s will to go to war, but its aggression drives conflict.
Seizing territory, building islands and fortifications, ramming Filipino ships and cutting off people’s appendages, or shoving an Indian commander off a cliff is not an “accident.” This behavior is not something that can be managed as if it were a civil marriage dispute. When one party is the abuser in a relationship, you don’t treat them as equally at fault (at least you shouldn’t, in the 21st century).
Because that’s all the Chinese Communist Party is: the abusive husband who has a lot of guns and ammo, is deeply paranoid, thinks the world owes him everything, and takes a swing at every neighbor he thinks he can bully.
Any war that breaks out over Taiwan, the South China Sea, or elsewhere isn’t happening as if we tripped and fell into war in the dark. The PRC is to blame, and we should be doing everything we can to ensure they know what happens if they keep pushing."
https://www.breakingbeijing.com/p/there-is-no-accidental-war
16. "I’m really worried AI is going to make all of this worse. I hear all the same things about AI that I heard at the beginning of other waves of tech about how it will make things better. Yet, I don’t hear any acknowledgement that we made mistakes that time around and now have ideas how to improve with the next wave of innovation."
https://investinginai.substack.com/p/lessons-from-filterworld-and-a-warning
17. "The idea of America as the Arsenal of Democracy in World War II—innovative, productive, and hard-working—is now firmly a part of the story we tell about ourselves. It is a source of pride, patriotism, and inspiration. And it’s a true story.
But that was then, and this is now.
Today, Americans are waking up to the reality that we can’t make things in sufficient quantities to keep us safe, while our principal adversary is flooding the world with its manufactures. Many of our allies are in even worse shape.
Rebuilding and rearming before it’s too late are the urgent tasks before us. Thankfully, industrial decline is a solvable problem—anda choice. We can make better choices, create better incentives, and use the strengths we still have to our advantage.
Not only is mass production a solvable problem. It’s already being solved. Half of our business at Palantir Technologies, where I work as chief technology officer, is with commercial clients. We work every day to create software that helps the free world’s most important industrial concerns supercharge production, see into their supply chains, and empower their workers, from the C-suite to the assembly line.
I’ve seen the results, and I believe this model—what’s sometimes called software-defined production—is key to rebuilding the American industrial base."
18. "So it is not that hard to see a link between missiles devastating Israel’s north, Biden’s plans, global tensions and how the most odious forces are escalating this conflict into America’s main street. It will require rare political talent and guts to turn events around on both the frontlines in Lebanon and the streets of LA. So far we have seen little of it but events may now force Biden’s hand to act decisively."
https://pieterdorsman.substack.com/p/silence-before-the-storm
19. "While there are still many companies sub-$200m in revenue who go public, the late-stage private markets enable those who would wait to achieve much higher scale."
https://tomtunguz.com/ipo-size-2024/
20. "When hegemony is broken, conflict returns. At worst, the strong take what they can and the weak suffer what they must. At best, innovation returns. When there is no dominant power to ensure peace, there is also no bureaucracy to ensure stagnation. No global hall monitor. The same environment that produced Sparta and Athens––one of iteration and competition––is allowed to flourish.
Hegemony brings peace, competition brings innovation.
If America slips from total hegemon to standard first power, we’ll see a much more dynamic global environment. Ideally, the US will rise to the challenge and become more competitive as well. Decentralized currency means small network states can operate with a globally valid currency––no confederate dollars. Startup founders are now using LLMs to run companies with 2 people instead of 20. The same may be true of countries.
Athens held total hegemony for 67 years. The United States has enjoyed the same for 79 years. Now a challenge to American hegemony paired with advances in tech set the stage for the rise of smaller, agile nation states and organizations to compete."
https://americanreformer.org/2024/06/rise-of-the-dutch-republics/
21. "To Run the World helps explain why Russia’s grasping for great-power status often looks so irrational. The Kremlin repeatedly punches above its weight, and strikes militarily before it is ready economically or strategically. Its outsize ambitions, inherited from the Russian empire and often challenged by the West – which learned in the 20th century to treat Russia as both culturally and ideologically alien – are often responsible for such behaviour.
With no sign that Russia’s ambitions are waning, the book offers a silver lining of sorts. Russia’s policies can change. After failing to gain legitimacy as an adversary, it tends to pursue the same goal as a partner. Its war on Ukraine has failed to give it legitimacy in the West and has positioned Russia as a weak junior partner of China in the east. Russia will have to change its strategy in future. For that to happen the West needs to show resolve, as Truman did in the 1950s, Kennedy in the 1960s, and Reagan in the 1980s."
https://www.newstatesman.com/culture/books/book-of-the-day/2024/06/russias-great-power-complex
22. "The first thing to understand about this war is that it would have been entirely avoidable if the US had utilized historical American pragmatism and first principles when building its post-Cold War national security strategy. It did not. Instead, it allowed its decision-making to fall victim to greed, trendy theories, and tribalism. These flaws led to a policy that:
--Treated Russia as an enemy, even though they were democratizing
--Embraced China as a partner, even though its totalitarian government was still in control
--Allowed a networked swarm that demonized Putin for Trump’s election in 2016 to drive its policy response to the invasion of Ukraine.
Now, the US is rapidly moving to contain China by bolstering its regional alliances and building a strategic “thorn” that perpetually threatens them (in Russia’s case, Ukraine, in China’s, Taiwan). Unfortunately, as it is prone to do, the US has decided to embark on this strategy without seriously considering its consequences or minimizing its vulnerability to an escalation in hostilities."
https://johnrobb.substack.com/p/permawar
23. "So in other words, by reaching the future a little ahead of the West, Japan, and its content creators, began creating things that met the needs of its children and adults – increasingly indoors, isolated, and in need of stimulation and comfort and escape – just as the children and adults of other nations were approaching these same sorts of societal milestones. This wasn’t canny – it was lucky. Effectively Japan is surfing waves of societal trends that radiate outward from itself to post-industrial nations around the world.
But a bigger part is because successive generations of American tastemakers have grown up on Japanese fantasies themselves – which, bringing things full circle, is how an all-American sports celebrity like Noah Lyles can make Japanese tastes a big part of his public persona, and nobody bats an eye."
https://blog.pureinventionbook.com/p/the-united-states-of-japan
24. "But if Canadians are so ambitious, why do we buy into the narrative of a “bronze medal mentality”?
Because to do otherwise would require us to accept an inconvenient truth: that the problem isn’t the founders, it’s the ecosystem.
It would require us to accept a fact that many Canadian founders have come to terms with over the years: in many cases, the best path to fulfill their ambitions involves leaving Canada."
https://chrisneumann.com/archives/canadas-problem-isnt-ambition
25. Happen to be in Detroit and wish I had more time to check out this city. But it's really undergoing a renaissance. 2025!
https://www.michigan.org/article/trip-idea/perfect-detroit-travel-guide-first-time-visitor
26. This is a sign of one of the most important trends: Hardware as a Service.
Will be a key piece of VCs coming into manufacturing. #Reindustrialize
https://www.svb.com/trends-insights/reports/state-of-haas-report/
27. "Lübeck’s and Hamburg’s access to salt supplies had given them unique advantages in the herring fishing industries of the North Sea and Baltic. Dutch salt-upon-salt, however, was just about as good as any other refined white salt for preserving fish, while also being much cheaper and more easily scaled. France, Spain and Portugal, with plenty of coast and infinite sunshine, could easily expand the production of bay salt to serve as the basic feedstock, while Dutch peat to fuel its refining was, as we’ve seen, for all intents and purposes inexhaustible. By contrast the traditional sources of the Baltic’s white salt, like the Lüneburg salt springs, were constrained by the supply of wood fuel for boiling the brine.
To expand in the same way would have required the creation and maintenance of many more forests up-river into Germany, on land that was already spoken for, and thus expensive to convert. There was simply no contest: thanks to their uniquely expandable supply of white salt, the northern Dutch could catch and preserve far more herring to a high quality.
Yet despite this game of New World whack-a-mole, the Dutch still just about managed to keep their commerce afloat. It was widely acknowledged that whereas the Spanish empire drew vast quantities of gold and silver from the New World, the Dutch seemed to have as great a “gold mine” of their own in the humble salted herrings of the North Sea."
https://www.ageofinvention.xyz/p/age-of-invention-the-dutch-salten
28. This is a great convo on the state of VC and AI in Silicon Valley. It's very educational.
https://www.youtube.com/watch?v=XhBAgSQnhVs
29. "But as I’ve been arguing for a while now, there’s one region of the world that’s well-positioned to grow and industrialize in the new era of geopolitical fragmentation. This is the region I call SASEA — an acronym for South Asia and Southeast Asia. South Asia includes India, Bangladesh, Pakistan, and some smaller countries nearby. Southeast Asia includes the big island countries of Indonesia and the Philippines, the medium-sized mainland countries of Vietnam, Thailand, and Myanmar, the small rich countries of Singapore and Malaysia, and a few others.
I coined this term — I pronounce it like “SAZ-ee-uh” — because no one else seemed like they were going to do it. The Economist briefly talked about “Altasia”, but the term never caught on, and it also included developed countries like Japan and Korea. SASEA is a much more cohesive bloc because it’s geographically contiguous, and most of it is still in the early stages of industrialization.
I don’t think people realize just how important SASEA is. It may not look big on a Mercator projection, but its population size is absolutely enormous; India alone is bigger than China now, and the region as a whole contains a full third of humanity. SASEA has far more people than Africa, East Asia (excluding Southeast Asia), or the entire Western hemisphere.
SASEA really is globalization’s next frontier. The age of export-led industrialization is not finished — geopolitical tensions will not return us to a world of local supply chains, nor will China become the world’s single factory floor. Yes, it’s a time of tensions, competition, and fragmentation. But so was the first Cold War. And just as Japan, Korea, and Taiwan reaped the benefits of Cold War 1 when access to Western markets drove their industrialization, the billions of people living in South Asia and Southeast Asia are well-positioned to benefit from the new age of geopolitical rivalries."
https://www.noahpinion.blog/p/the-age-of-sasea
30. "A weak manufacturing base also means fewer opportunities for knowledge spillovers—the transfer of knowledge between different industries or problems—and clustering effects—the benefits that accrue when an industry is concentrated in a specific region. America’s most globally competitive industries are all undergirded by these characteristics: there is a reason Silicon Valley, Wall Street, and Hollywood are all physical locations. By bringing people together, you get benefits greater than the sum of their parts.
Finally, rebuilding domestic manufacturing is just plain cool, and that is an underrated fact. It seems to me that America needs a renewed sense of national pride and more positive visions for the future. The right offers nationalism, but it is a kind of wounded nationalism—scared more than proud. The left offers a poststructuralist attack on the concept of America itself. Neither offers voters much to be excited about, and as a result, we are a cynical country.
Fortunately, there is good news. The tools required to push the frontiers of manufacturing forward play to many traditional American strengths: software, artificial intelligence, automation.
I believe that we can use our strengths in software, cloud computing, and AI to fundamentally change the capabilities and cost structures of manufacturers. International competitors, predicated on higher manufacturing employment than the US, could even struggle to compete. There is a path—perhaps a narrow one, but a path nonetheless."
https://www.hyperdimensional.co/p/america-the-serious
31. Wisdom from everyone's favorite new Tiger Dad. Jensen Huang of Nvidia.
"To wrap up, I think Jensen summed up his life and work principles well in a recent commencement speech at Caltech. In his words:
--Believe in something unconventional and unexplored but let it be informed and let it be reasoned. Dedicate yourself to making it happen.
--See setbacks as new opportunities. Your pain and suffering are your ultimate superpowers. Of all the things that I value, intelligence is not at the top of that list. My ability to endure pain and suffering, to work on something for a very, very long period of time, to handle setbacks, and to see the opportunity just around the corner I consider to be my superpowers, and I hope they're yours.
--Find a craft. It's not important to decide on day one, and it's not even important to decide any time soon, but I hope you do find a craft that you want to dedicate your lifetime to perfecting and be your life's work.
--Prioritize your life. There are so many things going on and so many things to do, but prioritize your life, and you will have plenty of time to do the important things."
https://creatoreconomy.so/p/15-life-and-work-principles-from-jensen
32. What an enlightening and excellent conversation. So many good frameworks for thriving in modern day.
https://www.youtube.com/watch?v=kZDzpFk7u8I
33. Manufacturing on my mind. Vietnam, Indonesia, America & Argentina well positioned for the future assuming the investments are made now.
https://www.youtube.com/watch?v=rlr-SmmBC_A
34. One of my favorite weekly conversations in Silicon Valley. Good to watch if you want to know what's up here in tech land.
https://www.youtube.com/watch?v=WrodU2nqLCQ
35. "AI adoption is slower than expected in many spaces. Some of the reasons are straightforward, but others are more subtle.
Most leaders wants to inject AI into their business to develop a competitive advantage. There are four challenges."
https://tomtunguz.com/why-ai-adoption-slower/
36. "His climb underscores how interwoven those ties can become: OpenAI, for example, is an important customer of Scale, which supplies AI companies with contract workers to fine-tune their data. Last fall, Altman and Wang actually discussed the prospect of OpenAI buying Scale, according to a person informed about the talks, though the deal never reached a formal stage.
Instead, Wang kept Scale independent and raised $1 billion over the course of several months, with Scale at a $13.8 billion valuation. Thanks partly to Scale’s deals with OpenAI, revenue is booming, and Scale has forecast more than $1 billion in sales this year, catapulting it to the top ranks of generative AI companies by sales.
For the most part, those sales come from what amounts to AI grunt work: Scale employs a vast but relatively low-paid workforce to label and train the data that underpin the AI systems developed by Scale’s customers, including OpenAI, Meta Platforms and Alphabet. They rely on Scale contractors to push their AI products toward creating more human-like responses; the contractors teach the AI by writing their own responses to questions submitted to chatbots.
Over the past eight years, Wang has successfully steered Scale in whatever direction AI was leaning. In the process, he has proven himself a crafty opportunist, shifting Scale toward fresh pools of revenue when old ones dried up. His nimbleness comes from considerable careful study.
“I don’t think he figured out where the world is going by sitting in his bedroom and thinking about it. He spends time with the right people. He gathers a lot of data on where the world is going and can reorient the business around it,” one Scale investor told me.
Part of his polarizing reputation also comes from the fact that Wang holds grudges. Unhappy with high staff turnover amid intense industrywide competition for AI workers, he has prevented ex-employees from selling shares in an upcoming secondary offering—forcing them to continue waiting to sell their illiquid stock.
When I discussed Wang and his relentless scramble to the top of Silicon Valley with a fellow founder who knows him well, the founder described Wang as someone who “needed success like he needed oxygen.”
37. "The reason Zuck and the other Axis powers haven’t built age verification into their platforms is it will reduce their profits (because they will serve fewer ads to kids), which will suppress their stock prices, and the job of a public company CEO is to increase the stock price. Period, full stop, end of strategic plan. So long as the negative impact to the stock price caused by the bad PR of teen suicide and depression is less than the positive impact of the incremental ad revenue obtained through unrestricted algorithmic manipulation of those teens, the rational, shareholder-driven thing to do is fight age-verification requirements.
If we want the platforms to make their products safe for children, we need to change the incentives — force them to bear the cost of their damage. Internalize the externalities, in economist-speak. There are three forces powerful enough to do this: the market, plaintiff lawyers, and the government.
The market solution would be to let consumers decide if they want to be exploited and manipulated. And by consumers, I mean “teenagers.” One big shortcoming of this approach is that teenagers are idiots. I have proof here, as I’m raising two and used to be one. My job as their dad is to be their prefrontal cortex until it shows up."