Marvin’s Best Weekly Reads March 10th, 2024
“The world breaks everyone, and afterward, some are strong at the broken places.” - Ernest Hemingway
"Many people asked, or challenged, that due to modern technology and the future being so different from the past, these historic cycles may no longer apply to us.
It is easy to understand this point of view. Our world is more connected, more centralized, and more rapidly evolving than any empire in history, and as a consequence, the old rules may not apply.
But since it is easy to make that argument, today I will argue the opposite - that it is not different this time, and nothing has changed.
I will argue that the cycles of history are driven by human nature, and not by the available technology."
https://jaymartin.substack.com/p/it-is-not-different-this-time-and
2. "A decade ago, while doing some writing and thinking for the CJCS (Chairman of the Joint Chiefs of Staff), I came up with the concept of the Zero-day war. The Zero-day war concept leveraged my earlier work on Global Guerrillas (see my book “Brave New War” for more).
It combines;
--infiltration (deep penetration of an enemy’s territory, systems, and society),
--technological leverage (leveraging and modifying commercially available technology to super-empower small groups/individuals), and
--amplification from systems disruption (the ability to easily disrupt large, tightly coupled, and interconnected networks through small attacks, causing cascades of chaos)
to completely overwhelm an adversary for a short period (a couple of days or weeks) by catastrophically disrupting the complex and tightly interconnected networks (energy, transportation, communications, etc.) a modern society is completely and utterly dependent upon."
https://johnrobb.substack.com/p/zero-day-wars
3. Long been a fan of Nomad Capitalist's work. Go where you are treated best.
https://www.youtube.com/watch?v=I9-b3dEDkIQ&t=1818s
4. A far out there take but yes, Australia and Japan are big regional powers. Not sure if China will disappear as he says.
https://www.youtube.com/watch?v=eejRr-oP6hw
5. "But in any case, a global trade war is brewing. Arguments that countries should go back to embracing free trade, so that their consumers can have slightly cheaper goods, are likely to fall on deaf ears.
The best thing we can do now is to try to make sure that whatever trade barriers countries do throw up are consistent with their objectives, and have as few self-destructive side effects as possible."
https://www.noahpinion.blog/p/tariffs-are-coming
6. "But after two years of war, the adaptation battle has changed. The quality gap between Ukraine and Russia has closed. Ukraine still has an innovative and bottom-up military culture, which allows it to quickly introduce new battlefield technologies and tactics.
But it can struggle to make sure that those lessons are systematized and spread throughout the entire armed forces. Russia, on the other hand, is slower to learn from the bottom up because of a reluctance to report failure and a more centralized command philosophy. Yet when Russia does finally learn something, it is able to systematize it across the military and through its large defense industry.
These differences are reflected in the ways the two states innovate. Ukraine is better at tactical adaptation: learning and improving on the battlefield. Russia is superior at strategic adaptation, or learning and adaptation that affects national and military policymaking, such as how states use their resources. Both forms of adaptation are important. But it is the latter type that is most crucial to winning wars.
The longer this war lasts, the better Russia will get at learning, adapting, and building a more effective, modern fighting force. Slowly but surely, Moscow will absorb new ideas from the battlefield and rearrange its tactics accordingly. Its strategic adaptation already helped it fend off Ukraine’s counteroffensive, and over the last few months it has helped Russian troops take more territory from Kyiv.
Ultimately, if Russia’s edge in strategic adaptation persists without an appropriate Western response, the worst that can happen in this war is not stalemate. It is a Ukrainian defeat."
https://www.foreignaffairs.com/ukraine/russias-adaptation-advantage
7. Deeply insightful discussion on seed venture capital and what’s happening now. Net net: it's damn hard to be good.
https://www.youtube.com/watch?v=c8nzScuxuvo
8. "Summary: If you plan on being well off, a high paying W-2 could get you into the top 10% pretty comfortably. If you want to be in the top 1% you are only fooling yourself if you think the best path (probability wise) is a career - the math will prove you wrong even without normal life events - kids, layoffs and standard sudden expenses.
Getting Ahead Now
Fortunately for you there are a few things that the boomers and middle managers don’t understand. They don’t understand: 1) AI tools, 2) crypto currencies, 3) video editing, 4) AR/VR use cases and 5) network effects.
If they understood any of these things they wouldn’t have stayed in middle management, they would have built the requisite skills and asset base to leave sooner than later.
All of these skills are easy to learn today with zero need for a a $200,000 degree from some top MBA program with a 20-30% unemployment rate. Just up to you to decide if you’re going to try and get into the top 1%."
https://bowtiedbull.io/p/want-to-be-the-1-get-used-to-building
9. "VC money has been burning to fuel the growth of this technology to its success. Now it’s trying to find product market fit. Will they find a sustainable business model before server costs eat their runway?
Who knows.
But when selling a strict AI company product (like OpenAI), what will people pay for a chatbot? People may be paying 20 dollars a month, but that doesn’t cover the server costs. Especially now where someone can run a full model on their laptop without safety constraints.
We haven’t seen many successful businesses yet. Because everyone has pitched and drank the Kool-aid that AI can do everything. But it can’t."
https://mercurial.substack.com/p/the-future-of-ai
10. "European states must therefore start operating on the assumption that Trump will win—and in that case they will be left on their own to look after their security. It will require a very different mindset than has existed since 1945, and a willingness to be decisive in a way that does not come natural to European states."
https://phillipspobrien.substack.com/p/what-europe-must-do-now-in-10-steps
11. "The slowing Chinese economy may be a canary in the coal mine to other financial markets that the effects of the fastest rate hiking cycle in recent memory (with record global debt levels) have not been fully felt yet.
The speed of this downturn may be shocking to some, but I am relatively unsurprised. The Chinese stock market is littered with frauds, scams, pump and dumps, and blatant corruption.
Officials are paid to look the other way, auditors don’t care about the accuracy of reports, and due diligence is essentially a non-starter. I was awakened to the depth of the problems in China in 2018 when watching The China Hustle, a documentary on the fraudulent listing of Chinese equities on U.S. exchanges and how retail investors were exploited."
https://dollarendgame.substack.com/p/crisis-in-shanghai
12. "The magic is not in filling out forms or watching cute videos about your product, it’s about using your product as quickly as possible. As a result, the only acceptable forms of friction are ones that ultimately enhance the users ability to have a great experience.
Thus product is much better experienced as an app, where you have a notifications channel and a richer experience, then, by all means, ask the user to download something. If a product is much better, when used with colleagues or friends, that it might make sense to take a lower conversion rate during the sign-up flow in exchange for some sharing or inviting functionality, that brings more people into the app.
Ultimately, it’s all a trade-off, where every click drops off a huge number of users, so you need to spend that user intent very very well."
https://andrewchen.com/every-time-you-ask-the-user-click-you-lose-half/
13. "Don’t get distracted by only watching the United States and western central banks. They may be still tightening at the moment, but there is trouble brewing in the eastern world. This is going to bring an estimated $2 trillion of liquidity into the market. If that happens, investment assets globally will likely benefit.
We live in a digital, hyper-connected world today. Your local geography can have an impact on you, but the global liquidity situation is the final boss. And it appears the Chinese are about to give a gift to the world."
https://pomp.substack.com/p/the-chinese-are-about-to-give-a-gift
14. This is a tough forecast. But better to hear an informed view that rings true and the dishonesty we hear in mainstream media. Geopolitics in USA and across the world.
https://www.youtube.com/watch?v=I-uaiU4f6ZM
15. I always learn from Luke Belmar. His perspective is fresh and very smart.
https://www.youtube.com/watch?v=4h6_QQQ1PCE&t=2076s
16. "The Silicon Valley part of me is genuinely excited about the alternative forms of governance being dreamed up today, from network states and charter cities to seasteading and space colonies. Our sclerotic institutions absolutely need more competition. But the realities of violence in the physical world mean the Pentagon part of me can't let the claim that World War III is an impossibility go unchallenged.
What I’ll be arguing in this post is that “sovereignty” is a word that will continue to be inextricably linked to controlling a powerful military. Even if the vast majority of nation-states cease to exist and are replaced by network states, those network states will be forced to either build their own powerful militaries or rely on the remaining nation-states that do have large militaries.
It is indeed possible that the scale of warfare falls in the future, but it won’t be because states are unable to finance a massive conflict or lack the incentives to initiate one; rather, some state(s) will be so capable of winning a war that adversaries will not initiate conflict. Classic deterrence through technological superiority remains our greatest hope for peace."
https://www.elysian.press/p/military-without-nation-states
17. Masterful conversation on how top VCs think and the philosophy behind excellence in startup investing.
https://www.youtube.com/watch?v=i2tzHNQddnI
18. Poland is well positioned for the future whatever happens.
https://www.youtube.com/watch?v=RRoDjUcVOPY
19. "Most countries suffer from at least a diluted version of this problem. But the West, and within the West the United States particularly, seems these days to be incapable of long-term thinking, or of sustaining any memory of even the relatively recent past. This means that almost any unexpected event is destabilising and inexplicable, because nobody has been studying long-term trends.
Such disparate examples as the Chinese-brokered rapprochement between Iran and Saudi Arabia, or the rebuilding of the Russian defence industry over the last fifteen years, were prepared and undertaken in plain sight: it’s just that nobody was paying attention to them until their irruption into the news cycle made them unmissable. Likewise, nobody in the West can really analyse their long-term consequences properly, because we no longer have the capability or the inclination to do long-term thinking.
The result is panic and confusion, and the search for simple explanations, because the myopic western system cannot accommodate the almost infinite complexity of the real world.
This combination of a brutal word-view based on crude assumptions about hegemony, an attention-span insufficient to boil an egg competently, and an inability and a disinclination to imagine futures except as variants of the present, means that any genuinely significant change produces stupefaction and panic in the capitals of the West."
https://aurelien2022.substack.com/p/the-newer-world-order
20. Fascinating discussion on Africa and its future.
https://www.youtube.com/watch?v=zaZzr_skxt4&t=925s
21. "Named after the mystical seeing stones in The Lord of the Rings, Palantir sells the same aura of omniscience. Seeded in part by an investment from the CIA’s venture-capital arm, it built its business providing data-analytics software to U.S. Immigration and Customs Enforcement (ICE), the FBI, the Department of Defense, and a host of foreign-intelligence agencies. “They are the AI arms dealer of the 21st century,” says Jacob Helberg, a national-security expert who serves as an outside-policy adviser to Karp. In Ukraine, Karp tells me, he saw the opportunity to fulfill Palantir’s mission to “defend the West” and to “scare the f-ck out of our enemies.”
Ukraine saw an opportunity too. At first it was driven by desperation, says Fedorov, 33. With the Russians threatening to topple Zelensky’s democratically elected government and occupy the country, Kyiv needed all the help it could get. But soon, government officials realized they had a chance to develop the country’s own tech sector. From European capitals to Silicon Valley, Fedorov and his deputies began marketing the battlefields of Ukraine as laboratories for the latest military technologies. “Our big mission is to make Ukraine the world’s tech R&D lab,” Fedorov says.
The progress has been striking. In the year and a half since Karp’s initial meeting with Zelensky, Palantir has embedded itself in the day-to-day work of a wartime foreign government in an unprecedented way. More than half a dozen Ukrainian agencies, including its Ministries of Defense, Economy, and Education, are using the company’s products. Palantir’s software, which uses AI to analyze satellite imagery, open-source data, drone footage, and reports from the ground to present commanders with military options, is “responsible for most of the targeting in Ukraine,” according to Karp.
Ukraine and its private-sector allies say they are playing a longer game: creating a war lab for the future. Ukraine “is the best test ground for all the newest tech,” Fedorov says, “because here you can test them in real-life conditions.” Says Karp: “There are things that we can do on the battlefield that we could not do in a domestic context.”
https://time.com/6691662/ai-ukraine-war-palantir/
22. “We’re going to see 10-person companies with billion-dollar valuations pretty soon…in my little group chat with my tech CEO friends there’s this betting pool for the first year there is a one-person billion-dollar company, which would’ve been unimaginable without AI. And now [it] will happen.”
Altman’s idea is that AI tools will soon reach the point where they can replicate the entire output of human employees. Instead of needing to hire a designer, you can use GPT-6 to design for you. There will be far less need for software engineers (meh), sales staff (no one will miss them), and newsletter writers (a tragedy of Greek proportions, leaving our society barren and empty).
An ambitious founder could outsource the work they would use employees for to an army of artificial intelligence agents. Theoretically, this would allow entrepreneurs to focus on only tackling their most important competitive advantage.
This is a claim worth examining, not just because I would like to be the first person to build that billion-dollar company. The one-person billion-dollar company matters because it is a handy way to understand how AI will disrupt knowledge work. In a good world, Altman’s prediction would come true because AI would allow people to build something whatever they can dream up. In a bad world, it would become true because AI will make most people’s jobs irrelevant, concentrating power in the hands of the elites."
https://every.to/napkin-math/the-one-person-billion-dollar-company
23. "In fact, Bangladesh is embedded in a larger mega-region — South and Southeast Asia, together home to 2.4 billion people — that is seeing rapid, broadly distributed growth and pockets of intense industrialization. This, I believe, is the most important development story of our time. Perhaps Africa’s turn will come a bit later, but South and Southeast Asia are ready now, and 2.4 billion people is a very large number.
In my opinion, to tell these countries to give up on industrialization right now, at the cusp of their big moment, and to refocus on nontradable services instead, would be to do them a deep disservice. Instead, I think they should keep trying the traditional model of development, taking advantage of trends like friend-shoring and de-riskingto encourage FDI and build up their manufacturing sectors. If that model eventually breaks, then it breaks, and we find something else. But from where I’m sitting, it doesn’t look broken yet."
https://www.noahpinion.blog/p/do-poor-countries-need-a-new-development
24. "Whether you are founding a Web 2 or Web 3 startup, acquiring and retaining users is the most challenging and expensive aspect of your business. In Web 2, which was most prevalent from 2010 to 2020, a VC fund looked for startups with a modicum of initial traction and subsequently provided cash money rocket fuel for the startup to go on a user acquisition spree.
Usually that entails handing out the service for free or at a discounted rate, well below its actual cost of delivery. Remember when ride-sharing apps were all fighting viciously for market share, and fares were incredibly cheap? That was all paid for with billions of dollars worth of VC money. Think of it as a subsidy in return for users.
At the end of the rainbow for a VC firm was a successful initial public offering (IPO). The IPO allowed the plebes to own a piece of a successful Web 2 company for the first time. IPOs are the way to dump on retail in TradFi. However, various regulations barred the plebes from crowdfunding early-stage Web 2 companies. The irony is that the vast number of plebe users who drove the success of the company were prohibited from owning a piece of it.
Bitcoin and the subsequent evolution of the crypto capital markets changed this. As of 2009 – the genesis Bitcoin block – it became possible to reward participants with ownership in the startup. This is what I will refer to as Web 3 startups.
Before you could purchase Bitcoin on an exchange starting in 2010, mining it was the only way to acquire it. Miners, by burning electricity, validate transitions, which creates and upkeeps the network. For this activity, they are rewarded with newly minted Bitcoin.
Participation = Ownership
The participants or users now have skin in the game."
https://cryptohayes.substack.com/p/points-guard
25. "So viewed through that lens, the unifying pattern of Trump, Elon, and Kanye is that at their core, they're putting on a show. A massive, unlimited duration, infinitely varying, endlessly fascinating show — the greatest shows on earth. And that show attracts attention, yes, but also votes, feet in the street, shareholder investment, car sales, music sales, sneaker sales, etc.
And that’s why you can’t get the good of Trump, Elon, or Kanye without the bad. The bad is part of the appeal, the bad is what shows it’s authentic; and probably powers the engine — the torture that keeps them going.
A hero is universally loved within a society, an anti-hero is hated by double digit percentages. Until new borders are established, this is a time of anti-heroes.
When Slave Morality is embraced by the establishment, the word “hero” today often means victim: Greta and the like.
And when Master Morality is demonized, traits like strength, masculinity, power, tribalism, are seen as anti-hero traits. Batman, Punisher, Donald Trump, Kyle Rittenhouse, 2nd Amendment, Andrew Tate — the mood of the right is not hero but anti-hero. The Republican establishment doesn’t want it, but the populace does.
Strap in, because for better and for worse, I think we’re only going to get more people following the Elon, Trump, and Kanye playbooks."
https://eriktorenberg.substack.com/p/the-rise-of-anti-heroes
26. A must listen for anyone in the technology biz. BG2.
https://www.youtube.com/watch?v=xgvoYJvbNT8
27."The result is that the US now finds itself operating in two strategic eras at the same time. In one, heavily armed industrial militaries fight a catastrophic war over a chunk of Europe (with a potentially even more catastrophic invasion scenario lurking in Asia). And in another, a Yemeni rebel group using rudimentary drone and missile technology shows itself capable of causing a disruption to global supply chains on par with Covid-19.
To comprehend this chaotic era — one in which nation-states boast historically destructive firepower but in many ways appear weaker than ever, unable to mobilize their populations around a common call or control their international environment — we need to go beyond the well-worn 20th-century analogies. We need to get medieval."
28. "Meta was able to simultaneously slim down and muscle up in part because its pandemic weight gain was so large. The empty calories of 2020-21 resulted in fatty deposits forming firm-wide. That’s been obvious, but the more interesting question is whether we are witnessing Meta go Black Mirror. Is AI the firm’s Ozempic? Preorders of Nvidia enterprise GPUs are a decent proxy for a firm’s investment in AI, and Meta has ordered more than any company in the world. (Tied with MSFT.) Does this mean the companies in the chart below are about to shed 10% to 25% of their weight/workforce while maintaining revenue growth?
The Ozemping of Meta unlocked its operating margin, which increased from a respectable 20% to a staggering 41%. Meta exemplifies an “asset-light” model. Don’t own the car, apartment, chip plant, or content (the creators’ salaries) — build a thick layer of software on top of other people’s assets. Shein, which owns no stores, factories, warehouses, or even distribution centers, is using this strategy to become the fastest retailer to $1 billion in history.
Meta speedballs this with an addictive product in an unregulated market. Now, years of investment in AI might be adding another leg to the stool — virtual workers who don’t expect pet-bereavement leave."
https://www.profgalloway.com/metastasis/
29. This is such a great discussion on tech this week. Vision Pro and its implications. The next great platform?
https://www.youtube.com/watch?v=lIWJz2d9vJw
30. "Ethnic imperialism is exactly what we’re facing in Russia right now. Putin doesn’t want Ukraine’s wheat farms. Nor is he motivated by some world-conquering ideology. He simply wants Russia to rule over all the places he views as being within its historic and linguistic sphere of influence.
The question is where that sphere stops. Putin assured Carlson that he has no designs on Latvia or Poland. This rather pointedly leaves out Estonia, where 25% of the population are Russian speakers, and which Russia continually bullies despite its NATO membership. But the elephant in the room here is really Poland.
In other words, even if Ukraine falls, the fundamental conflict between Putin and the West will not diminish, because it’s really about Poland. Poland’s Western-backed success represents the major challenge to Russia’s domination of what Putin sees as its rightful sphere of influence. And as long as Poland is wealthy and strong and independent, Putin, with the 1600s still fresh in his mind, will always feel like Russia is under direct threat.
So Americans who imagine that letting Putin have Ukraine would put an end to the conflict in East Europe should come to their senses. As long as Poland is fully independent, economically successful, and militarily powerful, Putin will feel that Russia’s position as master of East Europe is insecure. In fact, until Russian leaders learn to respect and get along with Poland, I fear that conflicts like the present one will repeat themselves."
https://www.noahpinion.blog/p/the-ukraine-war-is-ultimately-about
31. "As for those countries that are in dire need of Africa’s minerals, they should stop the demagoguery and find a way to compete with China’s approach. It won’t be easy, for the West in particular. China has the advantage that it can negotiate government to government agreements, which African governments prefer, whereas the West relies on the corporate world to do its work for them.
The Kingdom of Saudi Arabia (KSA) is one nation taking on this challenge. To achieve its ambitious Vision 2030, it will need plenty of critical minerals and has turned its focus towards the “super region” which includes West Asia, the Middle East, and Africa. Much like Chinese strategic planning, KSA also takes a long-term view to its own development and is in a position to negotiate government to government deals. It also has a lot of wealth it can deploy. Like, a lot.
Crown Prince Mohammed bin Salman Al Saud (MBS) has committed to investing $25 billion towards clean energy by the end of the decade and looks to invest another $15 billion to acquire stakes in mineral projects in return for offtake agreements for the physical metals. Additionally, it proposed $10 billion to finance and ensure Saudi exports through 2030 and an additional $5 billion in development financing for African nations.
Interestingly, the Wall Street Journal, citing people with knowledge of the talks, reported that the U.S. and Saudi Arabia are in talks to secure metals in Africa needed to help them with their energy transitions. This approach is smart and might solve America’s dilemma in competing with China. KSA, which has working relationships with all the great powers, is uniquely positioned to somewhat copy the Chinese approach.
The Kingdom is not the only recent entrant in Africa. Qatar, along with the UAE
(Saudi’s frenemy), and to a lesser extent Turkey, are also looking to invest in Africa. We can only hope they take a similar approach.
If we hope to avoid ongoing turmoil and deadly conflict in Africa, it’s imperative that the global community secures its mineral needs while creating an environment that will benefit the fast-growing population of ordinary Africans. These objectives do not need to be mutually exclusive."
32. An excellent episode this week on what’s up in tech. Great discussion on investing and building AI businesses.
https://www.youtube.com/watch?v=FHO4hoXc75k
33. "So here we are in 2024. All signs point to this being a pivotal year in the global contest. On one hand, China’s weakening economy is making the New Axis a less menacing opponent, but this transition is very slow and marginal. On the other hand, U.S. domestic political turmoil threatens to remove it from the equation, thus leaving China a free hand in Asia. And all the while, the war in Gaza festers on, diverting U.S. attention and resources from the far more important theater in Asia.
In other words, the U.S. election may offer the New Axis the chance to win Cold War 2 at a stroke. Without American power, Asia — and eventually, Eurasia — effectively belongs to Xi Jinping.
Even if Biden manages to rally and hold off a second Trump presidency, of course, U.S. aid for both Ukraine and Taiwan is in doubt. The so-called MAGA faction in Congress is trying to block a bill that would provide both countries with military aid, along with Israel. They don’t seem likely to give up that effort if Trump loses the election. And meanwhile, the war in Gaza and the Houthis’ attacks on shipping in the Red Sea appear likely to distract America’s attention, divert its navy, and siphon off military aid from the Asian theater.
So although the New Axis isn’t winning on every front — and may even get weaker in a decade or two — it has the chance to deal a decisive blow to the U.S.-led bloc in 2024. Only if the developed democracies can hang on and maintain internal stability and solid alliances in the short term will they be able to take advantage of Chinese economic weakness in the 2030s and 2040s."
https://www.noahpinion.blog/p/2024-could-be-the-pivotal-year-for
34. Still bullish in long run despite the recent drop in demand. This will be even more important with re-industrialization in West and boomers retiring.
"Non-automotive robots faired only slightly better last year, dropping 25%. According to A3, metal electronics manufacturing, food/consumer, medical and plastics/rubber saw the largest demand outside of automotive for the year.
A3 president Jeff Burnstein struck a hopeful note, stating, “While robotic sales were down over the year, 2023 ended with both an increase over the previous quarter and a nearly equal number of sales from automotive and non-automotive companies. Both are promising signs that more industries are becoming increasingly comfortable with automation overall.
While we expect to see automotive orders rise again, there’s little doubt that orders will increase from all non-automotive industries as they recognize how robots can help them overcome their unique challenges.”
https://techcrunch.com/2024/02/12/north-american-robot-orders-dropped-30-last-year/
35. "Beyond the opportunity for serendipty, the biggest reason to always take corp dev meetings is to open channels of communication. Should you ever need to spin up an acquisition process (or ramp up competitive offers), you’ll already have relationships with the people you need to speak with."
https://chrisneumann.com/archives/5-ways-to-improve-an-m-and-a-outcome